COMMITMENTS AND CONTINCENGIES
|9 Months Ended|
Sep. 30, 2018
|Commitments and Contingencies Disclosure [Abstract]|
|COMMITMENTS AND CONTINCENGIES||
NOTE 19 – COMMITMENTS AND CONTINCENGIES
The Company has employment agreements with certain employees that provided severance payments upon termination of employment under certain circumstances, as defined in the applicable agreements. The Company has estimated its possible severance payments of approximately $528,900 as of September 30, 2018 and December 31, 2017, which have not been reflected in its condensed consolidated financial statements since the Company concluded that the likelihood is remote at this moment.
Beijing GenExosome Office Lease
In March 2017, Beijing GenExosome signed an agreement to lease its facilities and equipment under operating lease. Pursuant to the signed lease, the annual rent is RMB 41,000 (approximately $6,000). The term of the lease is one year commencing on March 15, 2017 and expired on March 14, 2018. Beijing GenExosome renewed the lease in fiscal 2018. Pursuant to the renewed lease, the annual rent is RMB 41,000 (approximately $6,000) and the renewed lease expires on March 14, 2019. During the three and nine months ended September 30, 2018, rent expense related to the operating lease amounted to approximately $1,500 and $4,700, respectively. Future minimum rental payment required under this operating lease is as follows:
GenExosome Office Lease
In December 2017, GenExosome signed an agreement to lease its office space in Ohio, United States under operating lease. Pursuant to the executed lease, the monthly rent is $300. The term of the lease is one year commencing on January 1, 2018 and expires on December 31, 2018. During the three and nine months ended September 30, 2018, rent expense related to the operating lease amounted to $900 and $2,700, respectively. Future minimum rental payment required under this operating lease is as follows:
Operating Leases (continued)
Avalon Shanghai Office Lease
On January 19, 2017, Avalon Shanghai entered into a lease for office space in Beijing, China with a third party (the “Beijing Office Lease”). Pursuant to the Beijing Office Lease, the monthly rent is RMB 50,586 (approximately $7,000) with a required security deposit of RMB 164,764 (approximately $24,000). In addition, Avalon Shanghai needs to pay monthly maintenance fees of RMB 4,336 (approximately $600). The term of the Beijing Office Lease is 26 months commencing on January 1, 2017 and will expire on February 28, 2019 with two months of free rent in the months of December 2017 and February 2019. For the three months ended September 30, 2018 and 2017, rent expense and maintenance fees related to the Beijing Office Lease amounted to approximately $20,000 and $21,900, respectively. For the nine months ended September 30, 2018 and 2017, rent expense and maintenance fees related to the Beijing Office Lease amounted to approximately $69,000 and $64,400, respectively. Future minimum rental payment required under the Beijing Office Lease is as follows:
Insurance Premium Financing Agreement
On July 18, 2018, the Company entered into a financing agreement, providing for the issuance of a loan in the principal amount of $108,528. The term of the loan is for a period of 10 months from the execution of the agreement. The annual interest rate for the loan is 6.9%. All of financed amount is used to pay for Directors & Officers Insurance premium. At September 30, 2018, the outstanding principal balance of the loan and related unpaid interest was $89,884 which was included in the accrued liabilities and other payables on the accompanying condensed consolidated balance sheets.
Consulting Service Contract
On August 1, 2018, the Company entered into a one-year consulting service agreement with a third party who has agreed to provide consulting service to the Company. The agreement expires on July 31, 2019. In accordance with this agreement, the Company pays 180,000 shares of common stock for the one-year service. As of September 30, 2018, the common shares related to this service contract was not issued.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef