Quarterly report pursuant to Section 13 or 15(d)

Equity Method Investment

Equity Method Investment
3 Months Ended
Mar. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]  



As of March 31, 2022 and December 31, 2021, the equity method investment amounted to $503,994 and $515,632, respectively. The investment represents the Company’s subsidiary, Avalon Shanghai’s interest in Epicon Biotech Co., Ltd. (“Epicon”). Epicon was incorporated on August 14, 2018 in PRC. Avalon Shanghai and the other unrelated company, Jiangsu Unicorn Biological Technology Co., Ltd. (“Unicorn”), accounted for 40% and 60% of the total ownership, respectively. Epicon is focused on cell preparation, third party testing, biological sample repository for commercial and scientific research purposes and the clinical transformation of scientific achievements.


The Company treats the equity investment in the condensed consolidated financial statements under the equity method. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company’s share of the incorporated-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post incorporation change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment.


For the three months ended March 31, 2022 and 2021, the Company’s share of Epicon’s net loss was $12,916 and $18,514, respectively, which was included in loss from equity method investment in the accompanying condensed consolidated statements of operations and comprehensive loss. In the three months ended March 31, 2022, activity recorded for the Company’s equity method investment in Epicon is summarized in the following table:


Equity investment carrying amount at January 1, 2022   $ 515,632  
Epicon’s net loss attributable to the Company     (12,916 )
Foreign currency fluctuation     1,278  
Equity investment carrying amount at March 31, 2022   $ 503,994  


The tables below present the summarized financial information, as provided to the Company by the investee, for the unconsolidated company:


    March 31,
    December 31,
Current assets   $ 5,082     $ 5,479  
Noncurrent assets     202,271       216,864  
Current liabilities     73,552       56,626  
Noncurrent liabilities    
Equity     133,801       165,717  


    For the Three Months
Ended March 31,
    2022     2021  
Net revenue   $
Gross profit    
Loss from operation     32,323       46,286  
Net loss     32,291       46,286