Quarterly report pursuant to Section 13 or 15(d)

Equity Method Investment

v3.22.2
Equity Method Investment
6 Months Ended
Jun. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 5 – EQUITY METHOD INVESTMENT

 

As of June 30, 2022 and December 31, 2021, the equity method investment amounted to $517,442 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 June 30, 2022 and 2021, the Company’s share of Epicon’s net loss was $11,882 and $15,418, respectively, which was included in loss from equity method investment in the accompanying condensed consolidated statements of operations and comprehensive loss. For the six months ended June 30, 2022 and 2021, the Company’s share of Epicon’s net loss was $24,798 and $33,932, respectively, which was included in loss from equity method investment in the accompanying condensed consolidated statements of operations and comprehensive loss.

 

In the six months ended June 30, 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  
Payment made for equity method investment     54,008  
Epicon’s net loss attributable to the Company     (24,798 )
Foreign currency fluctuation     (27,400 )
Equity investment carrying amount at June 30, 2022   $ 517,442  

 

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

 

    June 30,
2022
    December 31,
2021
 
Current assets   $ 14,044     $ 5,479  
Noncurrent assets     177,093       216,864  
Current liabilities     41,645       56,626  
Noncurrent liabilities    
-
     
-
 
Equity     149,492       165,717  

 

    For the Three Months
Ended June 30,
  For the Six Months
Ended June 30,
 
    2022     2021     2022     2021  
Net revenue   $
-
    $
-
    $
-
    $
-
 
Gross profit    
-
     
-
     
-
     
-
 
Loss from operation     29,703       38,543       62,026       84,829  
Net loss     29,703       38,543       61,994       84,829