Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.22.2
Subsequent Events
6 Months Ended
Jun. 30, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 16 – SUBSEQUENT EVENTS

 

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

 

Common Shares Issued for Debt Conversion

 

On July 25, 2022, the Company and a convertible note holder entered into a Conversion Agreement pursuant to which the convertible note holder converted its Convertible Notes in the principal amount of $3,718,943 and unpaid interest of $9,751 into 5,736,452 shares of common stock of the Company at a per share price of $0.65.

 

Common Shares Issued Pursuant to Related Party Debt Settlement Agreement and Release

 

On July 25, 2022, the Company and Mr. Lu entered into and closed a Debt Settlement Agreement and Release pursuant to which the Company settled $2,440,262 debt owed under the Line of Credit and unpaid interest of $448,331 by issuance of 4,443,990 shares of common stock, with a fair value of $2,888,593, of the Company at a per share price of $0.65.

 

Unaudited Pro Forma Condensed Consolidated Balance Sheet As of June 30, 2022

 

On July 25, 2022, the Company and a convertible note holder entered into a Conversion Agreement pursuant to which the convertible note holder converted its Convertible Notes in the principal amount of $3,718,943 and unpaid interest of $9,751 into 5,736,452 shares of common stock of the Company at a per share price of $0.65.

 

On July 25, 2022, the Company and Mr. Lu entered into and closed a Debt Settlement Agreement and Release pursuant to which the Company settled $2,440,262 debt owed under the Line of Credit and unpaid interest of $448,331 by issuance of 4,443,990 shares of common stock of the Company at a per share price of $0.65. The 4,443,990 shares issued had a fair value of $2,888,593.

 

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2022 combines the historical unaudited condensed consolidated balance sheet as of June 30, 2022 and the debt conversion transactions mentioned above, giving effect to the conversions as if they had been consummated on June 30, 2022.

 

AVALON GLOBOCARE CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2022

 

          Pro Forma Adjustments        
    Historical     Dr.     Cr.     Pro Forma  
ASSETS                        
                         
CURRENT ASSETS:                        
Cash   $ 1,180,208     $
-
    $
-
    $ 1,180,208  
Rent receivable     24,778      
-
     
-
      24,778  
Rent receivable - related party     58,500      
-
     
-
      58,500  
Deferred financing costs, net     139,170      
-
     
-
      139,170  
Prepaid expenses and other current assets     250,302      
-
     
-
      250,302  
                                 
Total Current Assets     1,652,958      
-
     
-
      1,652,958  
                                 
NON-CURRENT ASSETS:                                
Rent receivable - noncurrent portion     147,964      
-
     
-
      147,964  
Deferred financing costs - noncurrent portion, net     74,937      
-
     
-
      74,937  
Deferred leasing costs     97,216      
-
     
-
      97,216  
Operating lease right-of-use assets, net     74,348      
-
     
-
      74,348  
Property and equipment, net     265,709      
-
     
-
      265,709  
Investment in real estate, net     7,444,428      
-
     
-
      7,444,428  
Equity method investment     517,442      
-
     
-
      517,442  
                                 
Total Non-current Assets     8,622,044      
-
     
-
      8,622,044  
                                 
Total Assets   $ 10,275,002     $
-
    $
-
    $ 10,275,002  
                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                                
                                 
CURRENT LIABILITIES:                                
Accounts payable   $ 376,386     $
-
    $
-
    $ 376,386  
Accrued professional fees     1,485,695      
-
     
-
      1,485,695  
Accrued research and development fees     609,222      
-
     
-
      609,222  
Accrued payroll liability and directors' compensation     374,601      
-
     
-
      374,601  
Accrued settlement of lawsuit     900,000      
-
     
-
      900,000  
Accrued liabilities and other payables     344,352       7,204      
-
      337,148  
Accrued liabilities and other payables - related parties     539,974       439,974      
-
      100,000  
Operating lease obligation     74,348      
-
     
-
      74,348  
Convertible note payable, net     492,550       3,718,943       3,226,393      
-
 
Derivative liability     2,013,300       2,013,300      
-
     
-
 
                                 
Total Current Liabilities     7,210,428       6,179,421       3,226,393       4,257,400  
                                 
NON-CURRENT LIABILITIES:                                
Accrued settlement of lawsuit - noncurrent portion     450,000      
-
     
-
      450,000  
Loan payable - related party     2,440,262       2,440,262      
-
     
-
 
                                 
Total Non-current Liabilities     2,890,262       2,440,262      
-
      450,000  
                                 
Total Liabilities     10,100,690       8,619,683       3,226,393       4,707,400  
                                 
STOCKHOLDERS' EQUITY:                                
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding    
-
     
-
     
-
     
-
 
Common stock, $0.0001 par value; 490,000,000 shares authorized; 89,554,766 shares issued and 89,034,766 shares outstanding; 99,735,208 pro forma shares issued and 99,215,208 pro forma shares outstanding     8,955      
-
      1,016       9,971  
Additional paid-in capital     56,118,913      
-
      8,618,667       64,737,580  
Less: common stock held in treasury, at cost; 520,000 shares     (522,500 )    
-
     
-
      (522,500 )
Accumulated deficit     (55,230,886 )     3,226,393      
-
      (58,457,279 )
Statutory reserve     6,578      
-
     
-
      6,578  
Accumulated other comprehensive loss     (206,748 )    
-
     
-
      (206,748 )
                                 
Total Stockholders' Equity     174,312       3,226,393       8,619,683       5,567,602  
                                 
Total Liabilities and Stockholders' Equity   $ 10,275,002     $ 11,846,076     $ 11,846,076     $ 10,275,002  

AVALON GLOBOCARE CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Unaudited Pro Forma Adjustment Reflects the Following Four Transactions:

 

Transaction 1:

 

Derivative liability     2,013,300                 
Additional paid-in capital             2,013,300  

 

The transaction reflects the embedded conversion option derivative liability was reclassified to additional paid-in capital upon the related note conversion.

 

Transaction 2:

 

Interest expense     3,226,393                
Discount on convertible note payable             3,226,393  

 

To amortize the discount upon conversion.

 

Transaction 3:

 

Convertible note payable     3,718,943                
Interest payable     7,204          
Common stock             573  
Additional paid-in capital             3,725,574  

 

The transaction reflects the principal and unpaid interest were converted into shares of common stock of the Company pursuant to a Conversion Agreement.

 

Transaction 4:

 

Loan payable - related party     2,440,262                  
Accrued liabilities and other payables - related parties     439,974          
Common stock             443  
Additional paid-in capital             2,879,793  

 

The transaction reflects debt owed under the Line of Credit and unpaid interest were settled by issuance of shares of common stock of the Company pursuant to a Debt Settlement Agreement and Release.