Quarterly report pursuant to Section 13 or 15(d)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Fair Value, Assets Measured on Nonrecurring Basis

Fair Value of Financial Instruments and Fair Value Measurements

 

The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

  Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

 

  Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

  Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

 

The carrying amounts reported in the condensed consolidated balance sheets for cash, accounts receivable, account receivable – related party, tenants receivable, security deposit, inventory, prepaid expenses and other current assets, accounts payable, accrued liabilities and other payables, accrued liabilities and other payables – related parties, deferred rental income, loan payable, interest payable, Value Added Tax (“VAT”) and other taxes payable, tenants’ security deposit, due to related party, and refundable deposit, approximate their fair market value based on the short-term maturity of these instruments. At June 30, 2018 and December 31, 2017, intangible assets were measured at fair value on a nonrecurring basis as shown in the following tables.

 

    Quoted Price in
Active Markets for
Identical Assets
(Level 1)
    Significant Other
Observable Inputs
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
    Balance at
June 30, 2018
    Impairment Loss  
Patents and other technologies   $     $     $ 1,419,474     $ 1,419,474     $  
                                         

 

    Quoted Price in
Active Markets for
Identical Assets
(Level 1)
    Significant Other
Observable Inputs
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
    Balance at
December 31, 2017
    Impairment Loss  
Patents and other technologies   $     $     $ 1,583,260     $ 1,583,260     $ 923,769  
Goodwill                             397,569  
Total   $     $     $ 1,583,260     $ 1,583,260     $ 1,321,338  

 

In December 2017, the Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment as of December 31, 2017 and it calculated that the estimated undiscounted cash flows were less than the carrying amount of the intangible assets. Based on its analysis, the Company recognized an impairment loss of $1,321,338 for the year ended December 31, 2017, which reduced the value of intangible assets acquired to $1,583,260. The Company did not record any impairment charge for the three and six months ended June 30, 2018.

 

ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Schedule of cash balances by geographic area

At June 30, 2018 and December 31, 2017, the Company’s cash balances by geographic area were as follows:

 

Country:   June 30, 2018     December 31, 2017  
United States   $ 2,324,517       63.8 %   $ 1,700,024       56.2 %
China     1,318,799       36.2 %     1,327,009       43.8 %
Total cash   $ 3,643,316       100.0 %   $ 3,027,033       100.0 %
Schedule of reconciliation of basic and diluted net income (loss) per share

The following table presents a reconciliation of basic and diluted net loss per share:

 

    Three
Months
    Three
Months
    Six
Months
    Six
Months
 
    Ended     Ended     Ended     Ended  
    June 30, 2018     June 30, 2017     June 30, 2018     June 30, 2017  
Net loss available to Avalon GloboCare Corp. common shareholders for basic and diluted net loss per share of common stock   $ (1,294,394 )   $ (430,508 )   $ (2,775,973 )   $ (979,841 )
Weighted average common stock outstanding - basic and diluted     71,979,678       64,628,622       71,122,356       63,617,572  
Net loss per common share attributable to Avalon GloboCare Corp. common shareholders - basic and diluted   $ (0.02 )   $ (0.01 )   $ (0.04 )   $ (0.02 )
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive:

 

    Three Months Ended June 30,     Six Months Ended June 30,  
    2018     2017     2018     2017  
Stock options     2,610,000       297,780       2,610,000       297,780  
Warrants     578,891             578,891        
Potentially dilutive securities     3,188,891       297,780       3,188,891       297,780