Quarterly report pursuant to Section 13 or 15(d)

Equity Method Investment

v3.22.2.2
Equity Method Investment
9 Months Ended
Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 5 – EQUITY METHOD INVESTMENT

 

As of September 30, 2022 and December 31, 2021, the equity method investment amounted to $478,362 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 September 30, 2022 and 2021, the Company’s share of Epicon’s net loss was $9,011 and $14,203, respectively, which was included in loss from equity method investment in the accompanying condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2022 and 2021, the Company’s share of Epicon’s net loss was $33,809 and $48,135, respectively, which was included in loss from equity method investment in the accompanying condensed consolidated statements of operations and comprehensive loss.

 

In the nine months ended September 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     52,994  
Epicon’s net loss attributable to the Company     (33,809 )
Foreign currency fluctuation     (56,455 )
Equity investment carrying amount at September 30, 2022   $ 478,362  

 

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

 

    September 30,
2022
    December 31,
2021
 
Current assets   $ 2,487     $ 5,479  
Noncurrent assets     153,057       216,864  
Current liabilities     36,790       56,626  
Noncurrent liabilities    
-
     
-
 
Equity     118,754       165,717  

 

    For the Three Months
Ended September 30,
    For the Nine Months
Ended September 30,
 
    2022     2021     2022     2021  
Net revenue   $
-
    $
-
    $
-
    $
-
 
Gross profit    
-
     
-
     
-
     
-
 
Loss from operation     22,526       35,509       84,552       120,338  
Net loss     22,527       35,509       84,521       120,338