Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Avalon GloboCare Corp. | |
Entity Central Index Key | 1,630,212 | |
Document Type | S-1/A | |
Trading Symbol | AVCO | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | true | |
Amendment Description | Calculation of Registration Fee Title of Each Class of Securities To Be Registered Proposed Maximum Aggregate Offering Price (1) Amount of Registration Fee Common Stock, $0.0001 par value per share $5,000,000 $623 Underwriter Warrants (2) — — Common Stock, $0.0001 par value per share, underlying Underwriter Warrants (3) $350,000 $44 Total $5,350,000 $667(4) (1) The registration fee for securities is based on an estimate of the proposed maximum offering price of the securities, and such estimate is solely for the purpose of calculating the registration fee pursuant to Rule 457(o). (2) No separate fee is required pursuant to Rule 457(g) under the Securities Act of 1933. (3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act of 1933. If the Registrant completes this offering, then on the closing date, the Registrant will issue underwriter warrants to Boustead Securities, LLC to purchase such number of shares of common stock equal to seven percent (7.0%) of the total number of shares of common stock sold by the Registrant in the offering at an exercise price of 100% of the price at which the Registrant sells shares of common stock in this offering. (4) Previously paid. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 70,848,622 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | |||
Cash | $ 2,125,656 | $ 3,027,033 | $ 2,886,189 |
Accounts receivable - net of allowance for doubtful accounts | 7,027 | 10,179 | |
Accounts receivable - related parties, net of allowance for doubtful accounts | 70,228 | ||
Tenants receivable, net of allowance for doubtful accounts | 37,990 | 38,469 | |
Security deposit | 28,016 | 6,916 | |
Inventory | 10,111 | 2,667 | |
Prepaid expenses and other current assets | 74,406 | 149,713 | 749,796 |
Total Current Assets | 2,283,206 | 3,234,977 | 3,706,213 |
OTHER ASSETS: | |||
Security deposit - noncurrent portion | 25,322 | ||
Prepayment for long-term assets | 47,714 | 153,688 | |
Property and equipment, net | 158,415 | 48,029 | 295 |
Investment in real estate, net | 7,591,952 | 7,623,757 | |
Intangible assets, net | 1,501,367 | 1,583,260 | |
Total Other Assets | 9,299,448 | 9,434,056 | 295 |
Total Assets | 11,582,654 | 12,669,033 | 3,706,508 |
CURRENT LIABILITIES: | |||
Accounts payable | 29 | ||
Accrued liabilities and other payables | 302,500 | 262,174 | 22,334 |
Accrued liabilities and other payables - related parties | 25,481 | 39,927 | 8,587 |
Deferred rental income | 7,254 | 12,769 | |
Loan payable | 1,500,000 | 1,500,000 | |
Interest payable | 375,096 | ||
Income taxes payable | 20,976 | ||
VAT and other taxes payable | 34,357 | 2,997 | 11,270 |
Tenants' security deposit | 73,400 | 92,288 | |
Due to related parties | 450,000 | 450,000 | 97,150 |
Refundable deposit | 3,000,000 | 3,000,000 | |
Total Current Liabilities | 5,768,088 | 5,360,184 | 160,317 |
EQUITY: | |||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at March 31, 2018 and December 31, 2017 | |||
Common stock, $0.0001 par value; 490,000,000 shares authorized;70,278,622 shares issued and 69,758,622 shares outstanding at March 31, 2018; 70,278,622 shares issued and outstanding at December 31, 2017 | 7,028 | 7,028 | 6,163 |
Additional paid-in capital | 12,016,633 | 11,490,285 | 3,681,387 |
Less: common stock held in treasury, at cost; 520,000 and 0 shares at March 31, 2018 and December 31, 2017, respectively | (522,500) | ||
Accumulated deficit | (4,999,233) | (3,517,654) | (53,369) |
Statutory reserve | 6,578 | 6,578 | 6,578 |
Accumulated other comprehensive loss - foreign currency translation adjustment | (39,316) | (91,994) | (94,568) |
Total Avalon GloboCare Corp. stockholders' equity | 6,469,190 | 7,894,243 | 3,546,191 |
Non-controlling interest | (654,624) | (585,394) | |
Total Equity | 5,814,566 | 7,308,849 | 3,546,191 |
Total Liabilities and Equity | $ 11,582,654 | $ 12,669,033 | $ 3,706,508 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Mar. 31, 2018$ / sharesshares |
Statement of Financial Position [Abstract] | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
Preferred stock, authorized | 10,000,000 |
Preferred stock, issued | 0 |
Preferred stock, outstanding | 0 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
Common stock, authorized | 490,000,000 |
Common stock, issued | 70,278,622 |
Common stock, outstanding | 69,758,622 |
Less: common stock held in treasury, at cost; | 520,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
REVENUES | ||||
Real property rental | $ 296,623 | $ 828,663 | ||
Medical related consulting services - related party | 66,286 | 222,611 | 616,446 | |
Development services and sales of developed products | 11,290 | 26,276 | ||
Total Revenues | 307,913 | 66,286 | 1,077,550 | 616,446 |
COSTS AND EXPENSES | ||||
Real property operating expenses | 210,274 | 542,371 | ||
Medical related consulting services - related parties | 99,581 | 272,400 | 73,066 | |
Development services and sales of developed products | 16,520 | 15,016 | ||
Total Costs and Expenses | 226,794 | 99,581 | 829,787 | 73,066 |
REAL PROPERTY OPERATING INCOME | 86,349 | 286,292 | ||
GROSS PROFIT FROM DEVELOPMENT SERVICES AND SALES OF DEVELOPED PRODUCTS | 5,230 | 11,260 | ||
GROSS (LOSS) PROFIT FROM MEDICAL RELATED CONSULTING SERVICES | 33,295 | (49,789) | 543,380 | |
OTHER OPERATING EXPENSES: | ||||
Selling expense | 8,711 | 15,253 | 6,894 | |
Compensation and related benefits | 538,814 | 182,927 | 1,291,183 | 10,088 |
Professional fees | 571,772 | 207,218 | 1,033,308 | 395,780 |
Other general and administrative | 285,252 | 60,732 | 464,544 | 53,685 |
Impairment loss | 1,321,338 | |||
Total Other Operating Expenses | 1,395,838 | 459,588 | 4,125,626 | 466,447 |
(LOSS) INCOME FROM OPERATIONS | (1,314,719) | (492,883) | (3,877,863) | 76,933 |
OTHER INCOME (EXPENSE) | ||||
Interest income | 408 | 794 | 1,370 | 575 |
Interest expense | (236,986) | (138,110) | ||
Foreign currency transaction loss | (57,244) | (57,244) | ||
Other income | 328 | 22,202 | ||
Grant income | ||||
Total Other (Expense) Income, net | (236,250) | (56,450) | (171,782) | 575 |
(LOSS) INCOME BEFORE INCOME TAXES | (1,550,969) | (549,333) | (4,049,645) | 77,508 |
INCOME TAXES | 21,927 | |||
NET (LOSS) INCOME | (1,550,969) | (4,049,645) | 55,581 | |
LESS: NET (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (69,390) | (585,360) | ||
NET (LOSS) INCOME ATTRIBUTABLE TO AVALON GLOBOCARE CORP. COMMON SHAREHOLDERS | (1,481,579) | (549,333) | (3,464,285) | 55,581 |
COMPREHENSIVE (LOSS) | ||||
NET (LOSS) INCOME | (1,550,969) | (549,333) | (4,049,645) | 55,581 |
Unrealized foreign currency translation gain (loss) | 52,838 | (39,771) | 2,540 | (94,568) |
COMPREHENSIVE LOSS | (1,498,131) | (589,104) | (4,047,105) | (38,987) |
LESS: COMPREHENSIVE LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (69,230) | (585,394) | ||
COMPREHENSIVE LOSS ATTRIBUTABLE TO AVALON GLOBOCARE CORP. COMMON SHAREHOLDERS | $ (1,428,901) | $ (589,104) | $ (3,461,711) | $ (38,987) |
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO AVALON GLOBOCARE CORP. COMMON SHAREHOLDERS: | ||||
Basic and diluted | $ (0.02) | $ (0.01) | $ (0.05) | $ 0 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic and diluted | 69,781,733 | 62,595,289 | 65,033,472 | 51,139,475 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Statutory Reserve [Member] | Other Comprehensive Loss [Member] | Noncontrolling Interest [Member] | Total |
Balance at beginning at Dec. 31, 2015 | $ 5,000 | $ 84,000 | $ (102,372) | $ (13,372) | ||||
Balance at beginning (in shares) at Dec. 31, 2015 | 50,000,000 | |||||||
Reorganization of company | $ 175 | (175) | ||||||
Reorganization of company (in shares) | 1,750,000 | |||||||
Common shares issued for services | $ 261 | 52,289 | 52,550 | |||||
Common shares issued for services (in shares) | 2,608,622 | |||||||
Common shares sold for cash | $ 727 | 3,634,273 | 3,635,000 | |||||
Common shares sold for cash (in shares) | 7,270,000 | |||||||
AHS founders' contribution | 141,000 | 141,000 | ||||||
Distribution of Avalon GloboCare Corp.'s shares to AHS's founders | (230,000) | (230,000) | ||||||
Appropriation to statutory reserve | (6,578) | $ 6,578 | ||||||
Foreign currency translation adjustment | $ (94,568) | (94,568) | ||||||
Net income (loss) | 55,581 | 55,581 | ||||||
Balance at end at Dec. 31, 2016 | $ 6,163 | 3,681,387 | (53,369) | 6,578 | (94,568) | 3,546,191 | ||
Balance at end (in shares) at Dec. 31, 2016 | 61,628,622 | |||||||
Distribution of Avalon GloboCare Corp.'s shares to AHS's founders | 0 | |||||||
Common shares issued in connection with Share Subscription Agreement | $ 300 | (300) | ||||||
Common shares issued in connection with Share Subscription Agreement (in shares) | 3,000,000 | |||||||
Common shares issued for cash, net of issuance costs | $ 515 | 5,098,860 | 5,099,375 | |||||
Common shares issued for cash, net of issuance costs (in shares) | 5,150,000 | |||||||
Stock-based compensation | 992,997 | 992,997 | ||||||
Intangible assets purchase | $ 50 | 1,717,341 | 1,717,391 | |||||
Intangible assets purchase (in shares) | 500,000 | |||||||
Foreign currency translation adjustment | 2,574 | $ (34) | 2,540 | |||||
Net income (loss) | (3,464,285) | (585,360) | (4,049,645) | |||||
Balance at end at Dec. 31, 2017 | $ 7,028 | 11,490,285 | (3,517,654) | 6,578 | (91,994) | (585,394) | $ 7,308,849 | |
Balance at end (in shares) at Dec. 31, 2017 | 70,278,622 | |||||||
Treasury stock purchase | (522,500) | (522,500) | ||||||
Stock-based compensation | 526,348 | $ 526,348 | ||||||
Foreign currency translation adjustment | 52,678 | 160 | 52,838 | |||||
Net income (loss) | (1,481,579) | (69,390) | (1,550,969) | |||||
Balance at end at Mar. 31, 2018 | $ 7,028 | $ 12,016,633 | $ (522,500) | $ (4,999,233) | $ 6,578 | $ (39,316) | $ (654,624) | $ 5,814,566 |
Balance at end (in shares) at Mar. 31, 2018 | 70,278,622 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net (loss) income | $ (1,550,969) | $ (4,049,645) | $ 55,581 | |
Adjustments to reconcile net (loss) income from operations to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization | 123,379 | $ 181,637 | 181,637 | 26 |
Stock-based compensation | 526,348 | 138,334 | 992,997 | 52,550 |
Impairment loss | 1,321,338 | |||
Changes in operating assets and liabilities, net of assets and liabilities assumed in business acquisition: | ||||
Accounts receivable | (3,469) | (9,803) | ||
Accounts receivable - related parties | 547 | 72,187 | (73,413) | |
Tenants receivable | 479 | (38,469) | ||
Inventory | (7,372) | (1,509) | ||
Prepaid expenses and other current assets | 75,693 | 2,254 | (98,917) | (50,619) |
Security deposit | 5,284 | (23,922) | (30,294) | |
Accounts payable | (30) | 28 | ||
Accrued liabilities and other payables | 178,136 | 29,202 | 214,628 | 5,758 |
Accrued liabilities and other payables - related parties | (14,498) | 16,257 | 31,331 | (9,607) |
Deferred rental income | (5,515) | 12,769 | ||
Interest payable | 236,986 | |||
Income taxes payable | (21,150) | (21,561) | 21,927 | |
VAT and other taxes payable | 31,264 | (5,029) | (8,697) | 11,781 |
Tenants' security deposit | (18,888) | 92,288 | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (416,234) | (412,814) | (1,339,692) | 13,984 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Prepayment made for acquisition of real property | (2,000) | (700,000) | ||
Purchase of Avalon GloboCare Corp.'s shares by AHS | (230,000) | |||
Prepayment made for purchase of long-term assets | (148,010) | |||
Purchase of property, plant and equipment | (7,852) | (53,812) | (334) | |
Purchase of intangible assets | (876,087) | |||
Purchase of commercial real estate | (7,008,571) | |||
Cash acquired on acquisition of business | 72,032 | |||
NET CASH USED IN INVESTING ACTIVITIES | (7,852) | (2,000) | (8,014,448) | (930,334) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Repurchase of common stock | (522,500) | |||
Proceeds received from loan payable | 2,100,000 | |||
Repayments for loan | (600,000) | |||
Proceeds received from related parties' advance | 210,000 | 9,000 | ||
Repayment for related parties' advance | (307,150) | |||
Proceeds received from AHS's founders'contribution | 141,000 | |||
Refundable deposit in connection with Share Subscription Agreement | 3,000,000 | 3,000,000 | ||
Proceeds received from sale of common stock | 5,150,000 | 3,635,000 | ||
Payment of issuance costs related to sale of common stock | (50,625) | |||
NET CASH PROVIDED BY FINANCING ACTIVITIES | (522,500) | 3,000,000 | 9,502,225 | 3,785,000 |
EFFECT OF EXCHANGE RATE ON CASH | 45,209 | (40,147) | (7,241) | (92,047) |
NET INCREASE IN CASH | (901,377) | 2,545,039 | 140,844 | 2,776,603 |
CASH - beginning of period | 3,027,033 | 2,886,189 | 2,886,189 | 109,586 |
CASH - end of period | 2,125,656 | 5,431,228 | 3,027,033 | 2,886,189 |
Cash paid for: | ||||
Interest | ||||
Income taxes | 21,150 | 21,561 | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Common stock issued in connection with Share Subscription Agreement | 300 | 300 | ||
Distribution of Avalon GloboCare Corp.'s shares to AHS's founders | 230,000 | |||
Acquisition of real estate by decreasing prepayment for property | $ 110,103 | 700,000 | ||
Common stock issued on purchase of intangible assets | 500,000 | |||
GenExosome's shares issued on purchase of intangible assets | 1,217,391 | |||
Business acquired on credit | $ 450,000 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Avalon GloboCare Corp. (f/k/a Global Technologies Corp.) (the “Company” or “AVCO”) is a Delaware corporation. The Company was incorporated under the laws of the State of Delaware on July 28, 2014. On October 18, 2016, the Company changed its name to Avalon GloboCare Corp. and completed a reverse split its shares of common stock at a ratio of 1:4. On October 19, 2016, the Company entered into and closed a Share Exchange Agreement with the shareholders of Avalon Healthcare System, Inc., a Delaware corporation (“AHS”), each of which are accredited investors (“AHS Shareholders”) pursuant to which we acquired 100% of the outstanding securities of AHS in exchange for 50,000,000 shares of our common stock (the “AHS Acquisition”). AHS was incorporated on May 18, 2015 under the laws of the State of Delaware. As a result of such acquisition, the Company’s operations now are focused on integrating and managing global healthcare services and resources, as well as empowering high-impact biomedical innovations and technologies to accelerate their clinical applications. Operating through two major platforms, namely “Avalon Cell”, and “Avalon Rehab”, our “technology + service” ecosystem covers the areas of regenerative medicine, cell-based immunotherapy, exosome technology, as well as rehabilitation medicine. We plan to integrate these services through joint ventures and acquisitions that bring shareholder value both in the short term, through operational entities as part of Avalon Rehab and in the long term, through biomedical innovations as part of Avalon Cell. AHS owns 100% of the capital stock of Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”), which is a wholly foreign-owned enterprise organized under the laws of the People’s Republic of China (“PRC”). Avalon Shanghai was incorporated on April 29, 2016 and is engaged in medical related consulting services for customers . For accounting purposes, AHS was the surviving entity. The transaction was accounted for as a recapitalization of AHS pursuant to which AHS was treated as the accounting acquirer, surviving and continuing entity although the Company is the legal acquirer. The Company did not recognize goodwill or any intangible assets in connection with this transaction. Accordingly, the Company’s historical financial statements are those of AHS and its wholly-owned subsidiary, Avalon Shanghai immediately following the consummation of this reverse merger transaction . On January 23, 2017, the Company incorporated Avalon (BVI) Ltd, a British Virgin Island company (dormant, will be dissolved in 2018). There was no activity for the subsidiary since its incorporation through March 31, 2018 . On February 7, 2017, the Company formed Avalon RT 9 Properties, LLC (“Avalon RT 9”), a New Jersey limited liability company. On May 5, 2017, Avalon RT 9 purchased a real property located in Township of Freehold, County of Monmouth, State of New Jersey, having a street address of 4400 Route 9 South, Freehold, NJ 07728. This property was purchased to serve as the Company’s world-wide headquarters for all corporate administration and operation. In addition, the property generates rental income. Avalon RT 9 owns this office building. Currently, Avalon RT 9’s business consists of the ownership and operation of the income-producing real estate property in New Jersey . On July 31, 2017, the Company formed GenExosome Technologies Inc. (“GenExosome”) in Nevada. On October 25, 2017, GenExosome and the Company entered into a Securities Purchase Agreement pursuant to which the Company acquired 600 shares of GenExosome in consideration of $1,326,087 in cash and 500,000 shares of common stock of the Company. On October 25, 2017, GenExosome entered into and closed an Asset Purchase Agreement with Yu Zhou, MD, PhD, pursuant to which the Company acquired all assets, including all intellectual property, held by Dr. Zhou pertaining to the business of researching, developing and commercializing exosome technologies including, but not limited to, patent application number CN 2016 1 0675107.5 (application of an Exosomal MicroRNA in plasma as biomarker to diagnosis liver cancer), patent application number CN 2016 1 0675110.7 (clinical application of circulating exosome carried miRNA-33b in the diagnosis of liver cancer), patent application number CN 2017 1 0330847.X (saliva exosome based methods and composition for the diagnosis, staging and prognosis of oral cancer) and patent application number CN 2017 1 0330835.7 (a novel exosome-based therapeutics against proliferative oral diseases). In consideration of the assets, GenExosome agreed to pay Dr. Zhou $876,087 in cash, transfer 500,000 shares of common stock of the Company to Dr. Zhou and issue Dr. Zhou 400 shares of common stock of GenExosome. As a result of the above transactions, effective October 25, 2017, the Company holds 60% of GenExosome and Dr. Zhou holds 40% of GenExosome. GenExosome is engaged in developing proprietary diagnostic and therapeutic products leveraging its exosome technology and marketing and distributing its proprietary Exosome Isolation Systems. On October 25, 2017, GenExosome entered into and closed a Stock Purchase Agreement with Beijing Jieteng (GenExosome) Biotech Co. Ltd., a corporation incorporated in the People’s Republic of China on August 7, 2015 (“Beijing GenExosome”) and Dr. Zhou, the sole shareholder of Beijing GenExosome, pursuant to which GenExosome acquired all of the issued and outstanding securities of Beijing GenExosome in consideration of a cash payment in the amount of $450,000, which shall be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). Beijing GenExosome is engaged in the development of exosome technology to improve diagnosis and management of diseases. Exosomes are tiny, subcellular, membrane-bound vesicles in diameter of 30-150 nm that are released by almost all cell types and that can carry membrane and cellular proteins, as well as genetic materials that are representative of the cell of origin. Profiling various bio-molecules in exosomes may serve as useful biomarkers for a wide variety of diseases. Beijing GenExosome’s research kits are designed to be used by researchers for biomarker discovery and clinical diagnostic development, and the advancement of targeted therapies. Currently, research kits and service are available to isolate exosomes or extract exosomal RNA/protein from serum/plasma, urine and saliva samples. Beijing GenExosome is seeking to decode proteomic and genomic alterations underlying a wide-range of pathologies, thus allowing for the introduction of novel non-invasive “liquid biopsies”. Its mission is focused toward diagnostic advancements in the fields of oncology, infectious diseases and fibrotic diseases, and discovery of disease-specific exosomes to provide disease origin insight necessary to enable personalized clinical management. Details of the Company’s subsidiaries which are included in these consolidated financial statements as of March 31, 2018 are as follows: Name of Subsidiaries Place and date of Incorporation Percentage of Ownership Principal Activities Avalon Healthcare System, Inc. (“AHS”) Delaware May 18, 2015 100% held by AVCO Provides medical related consulting services and developing Avalon Cell and Avalon Rehab in United States of America (“USA”) Avalon (BVI) Ltd. (“Avalon BVI”) British Virgin Island January 23, 2017 100% held by AVCO Dormant, will be dissolved in 2018 Avalon RT 9 Properties LLC (“Avalon RT 9”) New Jersey February 7, 2017 100% held by AVCO Owns and operates an income-producing real property and holds and manages the corporate headquarters Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”) PRC April 29, 2016 100% held by AHS Provides medical related consulting services and developing Avalon Cell and Avalon Rehab in China GenExosome Technologies Inc. (“GenExosome”) Nevada July 31, 2017 60% held by AVCO Develops proprietary diagnostic and therapeutic products leveraging exosome technology and markets and distributes proprietary Exosome Isolation Systems in USA Beijing Jieteng (GenExosome) Biotech Co., Ltd. (“Beijing GenExosome”) PRC August 7, 2015 100% held by GenExosome Provides development services for hospitals and sales of related products developed to hospitals in China | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Avalon GloboCare Corp. (f/k/a Global Technologies Corp.) (the “Company” or “AVCO”) is a Delaware corporation. The Company was incorporated under the laws of the State of Delaware on July 28, 2014. On October 18, 2016, the Company changed its name to Avalon GloboCare Corp. and completed a reverse split its shares of common stock at a ratio of 1:4. On October 19, 2016, the Company entered into and closed a Share Exchange Agreement with the shareholders of Avalon Healthcare System, Inc., a Delaware corporation (“AHS”), each of which are accredited investors (“AHS Shareholders”) pursuant to which we acquired 100% of the outstanding securities of AHS in exchange for 50,000,000 shares of our common stock (the “AHS Acquisition”). AHS was incorporated on May 18, 2015 under the laws of the State of Delaware. As a result of such acquisition, the Company’s operations now are focused on integrating and managing global healthcare services and resources, as well as empowering high-impact biomedical innovations and technologies to accelerate their clinical applications. Operating through two major platforms, namely “Avalon Cell”, and “Avalon Rehab”, our “technology + service” ecosystem covers the areas of regenerative medicine, cell-based immunotherapy, exosome technology, as well as rehabilitation medicine. We plan to integrate these services through joint ventures and acquisitions that bring shareholder value both in the short term, through operational entities as part of Avalon Rehab and in the long term, through biomedical innovations as part of Avalon Cell. AHS owns 100% of the capital stock of Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”), which is a wholly foreign-owned enterprise organized under the laws of the People’s Republic of China (“PRC”). Avalon Shanghai was incorporated on April 29, 2016 and is engaged in medical related consulting services for customers. For accounting purposes, AHS was the surviving entity. The transaction was accounted for as a recapitalization of AHS pursuant to which AHS was treated as the accounting acquirer, surviving and continuing entity although the Company is the legal acquirer. The Company did not recognize goodwill or any intangible assets in connection with this transaction. Accordingly, the Company’s historical financial statements are those of AHS and its wholly-owned subsidiary, Avalon Shanghai immediately following the consummation of this reverse merger transaction. On January 23, 2017, the Company incorporated Avalon (BVI) Ltd, a British Virgin Island company (dormant to be dissolved). There was no activity for the subsidiary since its incorporation through December 31, 2017. On February 7, 2017, the Company formed Avalon RT 9 Properties, LLC (“Avalon RT 9”), a New Jersey limited liability company. On May 5, 2017, Avalon RT 9 purchased a real property located in Township of Freehold, County of Monmouth, State of New Jersey, having a street address of 4400 Route 9 South, Freehold, NJ 07728. This property was purchased to serve as the Company’s world-wide headquarters for all corporate administration and operation. In addition, the property generates rental income. Avalon RT 9 owns this office building. Currently, Avalon RT 9’s business consists of the ownership and operation of the income-producing real estate property in New Jersey. On July 31, 2017, the Company formed GenExosome Technologies Inc. (“GenExosome”) in Nevada. On October 25, 2017, GenExosome and the Company entered into a Securities Purchase Agreement pursuant to which the Company acquired 600 shares of GenExosome in consideration of $1,326,087 in cash and 500,000 shares of common stock of the Company. On October 25, 2017, GenExosome entered into and closed an Asset Purchase Agreement with Yu Zhou, MD, PhD, pursuant to which the Company acquired all assets, including all intellectual property, held by Dr. Zhou pertaining to the business of researching, developing and commercializing exosome technologies including, but not limited to, patent application number CN 2016 1 0675107.5 (application of an Exosomal MicroRNA in plasma as biomarker to diagnosis liver cancer), patent application number CN 2016 1 0675110.7 (clinical application of circulating exosome carried miRNA-33b in the diagnosis of liver cancer), patent application number CN 2017 1 0330847.X (saliva exosome based methods and composition for the diagnosis, staging and prognosis of oral cancer) and patent application number CN 2017 1 0330835.7 (a novel exosome-based therapeutics against proliferative oral diseases). In consideration of the assets, GenExosome agreed to pay Dr. Zhou $876,087 in cash, transfer 500,000 shares of common stock of the Company to Dr. Zhou and issue Dr. Zhou 400 shares of common stock of GenExosome. As a result of the above transactions, effective October 25, 2017, the Company holds 60% of GenExosome and Dr. Zhou holds 40% of GenExosome. GenExosome is engaged in developing proprietary diagnostic and therapeutic products leveraging its exosome technology and marketing and distributing its proprietary Exosome Isolation Systems. On October 25, 2017, GenExosome entered into and closed a Stock Purchase Agreement with Beijing Jieteng (GenExosome) Biotech Co. Ltd., a corporation incorporated in the People’s Republic of China on August 7, 2015 (“Beijing GenExosome”) and Dr. Zhou, the sole shareholder of Beijing GenExosome, pursuant to which GenExosome acquired all of the issued and outstanding securities of Beijing GenExosome in consideration of a cash payment in the amount of $450,000, which shall be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). Beijing GenExosome is engaged in the development of exosome technology to improve diagnosis and management of diseases. Exosomes are tiny, subcellular, membrane-bound vesicles in diameter of 30-150 nm that are released by almost all cell types and that can carry membrane and cellular proteins, as well as genetic materials that are representative of the cell of origin. Profiling various bio-molecules in exosomes may serve as useful biomarkers for a wide variety of diseases. Beijing GenExosome’s research kits are designed to be used by researchers for biomarker discovery and clinical diagnostic development, and the advancement of targeted therapies. Currently, research kits and service are available to isolate exosomes or extract exosomal RNA/protein from serum/plasma, urine and saliva samples. Beijing GenExosome is seeking to decode proteomic and genomic alterations underlying a wide-range of pathologies, thus allowing for the introduction of novel non-invasive “liquid biopsies”. Its mission is focused toward diagnostic advancements in the fields of oncology, infectious diseases and fibrotic diseases, and discovery of disease-specific exosomes to provide disease origin insight necessary to enable personalized clinical management. Details of the Company’s subsidiaries which are included in these consolidated financial statements as of December 31, 2017 are as follows: Name of Subsidiaries Place and date of Incorporation Percentage of Ownership Principal Activities Avalon Healthcare System, Inc. (“AHS”) Delaware May 18, 2015 100% held by AVCO Provides medical related consulting services and developing Avalon Cell and Avalon Rehab in United States of America (“USA”) Avalon (BVI) Ltd. (“Avalon BVI”) British Virgin Island January 23, 2017 100% held by AVCO Dormant Avalon RT 9 Properties LLC (“Avalon RT 9”) New Jersey February 7, 2017 100% held by AVCO Owns and operates an income-producing real property and holds and manages the corporate headquarters Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”) PRC April 29, 2016 100% held by AHS Provides medical related consulting services and developing Avalon Cell and Avalon Rehab in China GenExosome Technologies Inc. (“GenExosome”) Nevada July 31, 2017 60% held by AVCO Develops proprietary diagnostic and therapeutic products leveraging exosome technology and markets and distributes proprietary Exosome Isolation Systems in USA Beijing Jieteng (GenExosome) Biotech Co., Ltd. (“Beijing GenExosome”) PRC August 7, 2015 100% held by GenExosome Provides development services for hospitals and sales of related products developed to hospitals in China |
BASIS OF PRESENTATION AND GOING
BASIS OF PRESENTATION AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND GOING CONCERN | NOTE 2 – BASIS OF PRESENTATION AND GOING CONCERN Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and with the rules and regulations of the U.S. Securities and Exchange Commission for financial information. The Company’s consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Going Concern The Company currently has limited operations. These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company had working capital deficit (total current liabilities in excess of total current assets) and an accumulated deficit of $2,125,207 and $3,517,654 at December 31, 2017, respectively, and had a net loss and net cash flow used in operating activities of $4,049,645 and $1,339,692 for the year ended December 31, 2017, respectively. The Company has a limited operating history and its continued growth is dependent upon the continuation of providing medical related consulting services to its only three clients who are related parties and through performing development services for hospitals and sales of related products developed to its several clients, generating rental revenue from its income-producing real estate property in New Jersey and generating revenue from proprietary Exosome Isolation Systems by developing proprietary diagnostic and therapeutic products leveraging exosome technology; and obtaining additional financing to fund future obligations and pay liabilities arising from normal business operations. In addition, the current cash balance cannot be projected to cover the operating expenses for the next twelve months from the release date of this report. The Company’s capital requirements for the next twelve months primarily relate to working capital requirements, including marketing expenses, salaries and fees related to third parties’ professional services, capital expenditures and reduction of accrued liabilities, mergers, acquisitions and the development of business opportunities. These uses of cash will depend on numerous factors including its sales and other revenues, and its ability to control costs. All funds received have been expended in the furtherance of growing the business. The Company will need to raise additional funds, particularly if it is unable to generate positive cash flow as a result of its operations. The Company estimates that based on current plans and assumptions, that its available cash will be insufficient to satisfy its cash requirements under its present operating expectations. Other than funds received from the sale of its equity and advances from its related parties, the Company presently has no other significant alternative source of working capital. The Company has used these funds to fund its operating expenses, pay its obligations and grow its business. The Company will need to raise significant additional capital to fund its operations and to provide working capital for its ongoing operations and obligations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital, implement its business plan, and generate significant revenues. There are no assurances that the Company will be successful in its efforts to generate significant revenues, maintain sufficient cash balance or report profitable operations or to continue as a going concern. The Company plans on raising capital through the sale of equity or debt instruments to implement its business plan. However, there is no assurance these plans will be realized and that any additional financings will be available to the Company on satisfactory terms and conditions, if any. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND GOING CONCERN | NOTE 2 – BASIS OF PRESENTATION These interim condensed consolidated financial statements of the Company and its subsidiaries are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The results reported in the unaudited condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on March 13, 2018. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the three months ended March 31, 2018 and 2017 include the allowance for doubtful accounts, reserve for obsolete inventory, the useful life of property and equipment and investment in real estate and intangible assets, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets and the associated valuation allowances, and valuation of options. 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, 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 March 31, 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 Balance at Impairment Loss Patents and other technologies $ — $ — $ 1,501,367 $ 1,501,367 $ — Quoted Price in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 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 Fair Value of Financial Instruments and Fair Value Measurements (continued) 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 months ended March 31, 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. Cash Cash consists of cash on hand and cash in banks. The Company maintains cash with various financial institutions in the PRC and United States. At March 31, 2018 and December 31, 2017, cash balances in PRC are $1,251,993 and $1,327,009, respectively, are uninsured. At March 31, 2018 and December 31, 2017, cash balances in United States are $873,663 and $1,700,024, respectively. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts. Concentrations of Credit Risk Currently, a portion of the Company’s operations are carried out in PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, trade accounts receivable and tenants receivable. A portion of the Company’s cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. A portion of the Company’s sales are credit sales which is to the customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivable and tenants receivable is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. At March 31, 2018 and December 31, 2017, the Company’s cash balances by geographic area were as follows: Country: March 31, 2018 December 31, 2017 United States $ 873,663 41.1 % $ 1,700,024 56.2 % China 1,251,993 58.9 % 1,327,009 43.8 % Total cash $ 2,125,656 100.0 % $ 3,027,033 100.0 % Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Accounts Receivable and Allowance for Doubtful Accounts (continued) Management believes that the accounts receivable are fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its accounts receivable at March 31, 2018 and December 31, 2017. The Company historically has not experienced uncollectible accounts from customers granted with credit sales. Tenants Receivable and Allowance for Doubtful Accounts Tenants receivable are presented net of an allowance for doubtful accounts. Tenants receivable balance consist of base rents, tenant reimbursements and receivables arising from straight-lining of rents primarily represent amounts accrued and unpaid from tenants in accordance with the terms of the respective leases, subject to the Company’s revenue recognition policy. An allowance for the uncollectible portion of tenant receivable is determined based upon an analysis of the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in Freehold, New Jersey in which the property is located. Management believes that the tenants receivable are fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its tenants receivable at March 31, 2018 and December 31, 2017. Inventory Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventory may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserve for the difference between the cost and the market value. These reserve is recorded based on estimates. The Company did not record any inventory reserve at March 31, 2018 and December 31, 2017. Property and Equipment Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Investment in Real Estate and Depreciation Investment in real estate is carried at cost less accumulated depreciation. The Company depreciates real estate building on a straight-line basis over estimated useful life. The Company capitalizes all capital improvements associated with replacements, improvements or major repairs to real property that extend its useful life and depreciate them using the straight-line method over its estimated useful life. Real estate depreciation expense was $31,805 and $0 for the three months ended March 31, 2018 and 2017, respectively. The Company charges maintenance and repair costs that do not extend an asset’s useful life to expense as incurred. Intangible Assets Intangible assets consist of patents and other technologies. Patents and other technologies are being amortized on a straight-line method over the estimated useful life of 5 years. Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charge for the three months ended March 31, 2018 and 2017. Acquisition Consideration On October 25, 2017, GenExosome entered into and closed a Stock Purchase Agreement with Beijing Jieteng (GenExosome) Biotech Co. Ltd., a corporation incorporated in the People’s Republic of China (“Beijing GenExosome”) and Dr. Zhou, the sole shareholder of Beijing GenExosome, pursuant to which GenExosome acquired all of the issued and outstanding securities of Beijing GenExosome in consideration of a cash payment in the amount of $450,000, which shall be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). On October 25, 2017, Dr. Zhou was appointed to the board of directors of GenExosome and served as Co-chief executive officer of GenExosome. As of March 31, 2018 and December 31, 2017, the unpaid acquisition consideration of $450,000 was recorded as due to related party on the accompanying condensed consolidated balance sheets. Deferred Rental Income Deferred rental income represents rental income collected but not earned as of the reporting date. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of March 31, 2018 and December 31, 2017, deferred rental income totaled $7,254 and $12,769, respectively. Value Added Tax Avalon Shanghai is subject to a value added tax (“VAT”) of 6% for providing medical related consulting services and Beijing GenExosome is subject to a VAT of 3% for performing development services and sales of related products developed. The amount of VAT liability is determined by applying the applicable tax rates to the invoiced amount of medical related consulting services provided and the invoiced amount of development services provided and sales of related products developed (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company reports revenue net of PRC’s value added tax for all the periods presented in the unaudited condensed consolidated statements of operations and comprehensive loss. Office Lease When a lease contains “rent holidays”, the Company records rental expense on a straight-line basis over the term of the lease and the difference between the average rental amount charged to expense and the amount payable under the lease is recorded as prepaid expenses in the consolidated balance sheets. The Company begins recording rent expense on the lease possession date. Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in cost of sales. For the three months ended March 31, 2018 and 2017, shipping and handling costs amounted to $25 and $0, respectively. Research and Development Expenditures for research and product development costs are expensed as incurred. The Company did not incur any research and development costs during the three months ended March 31, 2018 and 2017. Advertising and Marketing Costs All costs related to advertising and marketing are expensed as incurred. The Company did not incur any advertising and marketing expenses during the three months ended March 31, 2018 and 2017. Revenue Recognition Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the purchase price is fixed or determinable and collectability is reasonably assured. Types of revenue: ● Rental revenue from leasing commercial property under operating leases with terms of generally two years or more. ● Service fees under consulting agreements with related parties to provide medical related consulting services to its clients. The Company is paid for its services by its clients pursuant to the terms of the written consulting agreements. Each contract calls for a fixed payment in a fixed period of time. ● Service fees under agreements to perform development services for hospitals. The Company does not perform contracts that are contingent upon successful results. ● Sales of developed products to hospitals in connection with performing development services. Revenue recognition criteria: ● The Company recognizes rental revenue from its commercial leases on a straight-line basis over the life of the lease including rent holidays, if any. Straight-line rent receivable consists of the difference between the tenants’ rents calculated on a straight-line basis from the date of lease commencement over the remaining terms of the related leases and the tenants’ actual rents due under the lease agreements and is included in tenants receivable in the accompanying consolidated balance sheets. Revenues associated with operating expense recoveries are recognized in the period in which the expenses are incurred. ● The Company recognizes revenue by providing medical related consulting services under written service contracts with its customers. Revenue related to its service offerings is recognized as the services are performed and amounts are earned, using the straight-line method over the term of the related services agreement. Prepayments, if any, received from customers prior to the services being performed are recorded as advance from customers. In these cases, when the services are performed, the amount recorded as advance from customers is recognized as revenue. ● Revenue from development services performed under hospital contracts is recognized when it is earned pursuant to the terms of the contract. Each contract calls for a fixed dollar amount with a specified time period. These contracts generally involve up-front payment. Revenue is recognized for these projects as services are provided. ● Revenue from sales of developed items to hospitals resulting from its development services, which call for the transfer of other items developed during the projects to the customers, is recognized when the item is shipped to the customer and title is transferred. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. Sales tax collected is not recognized as revenue and amounts outstanding are included in accrued liabilities and other payables in the consolidated balance sheets. Real Property Operating Expenses Real property operating expenses consist of property management fees, property insurance, real estate taxes, depreciation, repairs and maintenance fees, utilities and other expenses related to the Company’s rental properties. Development Services and Sales of Developed Products Costs Costs of development services and sales of developed items to hospitals includes inventory costs, materials and supplies costs, depreciation, internal labor and related benefits, other overhead costs and shipping and handling costs incurred. Medical Related Consulting Services Costs Costs of medical related consulting services includes the cost of internal labor and related benefits, travel expenses related to consulting services, subcontractor costs, other related consulting costs, and other overhead costs. Subcontractor costs were costs related to medical related consulting services incurred by our subcontractor, such as medical professional’s compensation and travel costs. Stock-based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of Accounting Standards Codification (“ASC”) 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is recognized over the period of services or the vesting period, whichever is applicable. Until the measurement date is reached, the total amount of compensation expense remains uncertain. Income Taxes The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of March 31, 2018 and December 31, 2017, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. Tax year that remains subject to examination is the years ended December 31, 2017, 2016 and 2015. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of March 31, 2018 and December 31, 2017. Foreign Currency Translation The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company, AHS, Avalon RT 9, and GenExosome, is the U.S. dollar and the functional currency of Avalon Shanghai and Beijing GenExosome, is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign Currency Translation (continued) All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. Asset and liability accounts at March 31, 2018 and December 31, 2017 were translated at 6.2874 RMB to $1.00 and at 6.5067 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rates. The average translation rates applied to the statements of operations for the three months ended March 31, 2018 and 2017 were 6.3577 RMB and 6.8877 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. Comprehensive Loss Comprehensive loss is comprised of net loss and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the three months ended March 31, 2018 and 2017 consisted of net loss and unrealized gain (loss) from foreign currency translation adjustment. Per Share Data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per share are computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of common stock options (using the treasury stock method). Common stock equivalents are not included in the calculation of diluted net loss per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table presents a reconciliation of basic and diluted net loss per share: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Net loss available to Avalon GloboCare Corp. for basic and diluted net loss per share of common stock $ (1,481,579 ) $ (549,333 ) Weighted average common stock outstanding - basic and diluted 69,781,733 62,595,289 Net loss per common share attributable to Avalon GloboCare Corp. - basic and diluted $ (0.02 ) $ (0.01 ) For the three months ended March 31, 2018 and 2017, stock options to purchase 2,410,000 and 111,111 shares of common stock, respectively, have been excluded from the computation of diluted loss per share as their effect would be anti-dilutive. Business Acquisition The Company accounts for business acquisition in accordance with ASC No. 805, Business Combinations. The assets acquired and liabilities assumed from the acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill. The result of operations of the acquired business is included in the Company’s operating result from the date of acquisition. Non-controlling Interest As of March 31, 2018, Dr. Yu Zhou, director and Co-Chief Executive Officer of GenExosome, who owned 40% of the equity interests of GenExosome, which is not under the Company’s control. Segment Reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the chief executive officer (“CEO”) and president of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company has determined that it has three reportable business segments: real property operating segment, development services and sales of developed products segment, and medical related consulting services segment. These reportable segments offer different types of services and products, have different types of revenue, and are managed separately as each requires different operating strategies and management expertise. Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions. Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows. Reverse Stock Split The Company effected a one-for-four reverse stock split of its common stock on October 18, 2016. All share and per share information has been retroactively adjusted to reflect this reverse stock split. Fiscal Year End The Company has adopted a fiscal year end of December 31st. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This pronouncement is effective for reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2017 and 2016 include the allowance for doubtful accounts, reserve for obsolete inventory, the useful life of property, plant, equipment and investment in real estate and intangible assets, assumptions used in assessing impairment of long-term assets, the fair value of assets acquired and liabilities assumed in acquisition, valuation of deferred tax assets, accruals for taxes due, the value of stock-based compensation, and valuation of options. Fair Value of Financial Instruments and Fair Value Measurements AA 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 consolidated balance sheets for cash, accounts receivable, accounts receivable – related parties, 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, income taxes payable, Value Added Tax (“VAT”) and other taxes payable, tenants’ security deposit, due to related parties, and refundable deposit, approximate their fair market value based on the short-term maturity of these instruments. At December 31, 2017 and 2016, 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 December 31, 2017 Impairment Loss A 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 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, 2016 Impairment Loss Intangible assets $ — $ — $ — $ — $ — Fair Value of Financial Instruments and Fair Value Measurements (continued) A rollforward of the level 3 valuation of the financial instrument is as follows: Patents and other technologies Goodwill Total Balance at December 31, 2016 $ — $ — $ — Intangible assets acquired 2,593,478 397,569 2,991,047 Amortization of intangible assets (86,449 ) — (86,449 ) Impairment loss (923,769 ) (397,569 ) (1,321,338 ) Balance at December 31, 2017 $ 1,583,260 $ — $ 1,583,260 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. There were no intangible assets at December 31, 2016 and the Company did not record any impairment charge for the year ended December 31, 2016 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. Cash Cash consists of cash on hand and cash in banks. The Company maintains cash with various financial institutions in the PRC and United States. At December 31, 2017 and 2016, cash balances in PRC are $1,327,009 and $2,525,630, respectively, are uninsured. At December 31, 2017 and 2016, cash balances in United States are $1,700,024 and $360,559, respectively. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts. Concentrations of Credit Risk Currently, a portion of the Company’s operations are carried out in PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, trade accounts receivable and tenants receivable. A portion of the Company’s cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. A portion of the Company’s sales are credit sales which is to the customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivable and tenants receivable is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. At December 31, 2017 and 2016, the Company’s cash balances by geographic area were as follows: Country: December 31, 2017 December 31, 2016 United States $ 1,700,024 56.2 % $ 360,559 12.5 % China 1,327,009 43.8 % 2,525,630 87.5 % Total cash $ 3,027,033 100.0 % $ 2,886,189 100.0 % Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Management believes that the accounts receivable are fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its accounts receivable at December 31, 2017. The Company historically has not experienced uncollectible accounts from customers granted with credit sales. Tenants Receivable and Allowance for Doubtful Accounts Tenants receivable are presented net of an allowance for doubtful accounts. Tenants receivable balance consists of base rents, tenant reimbursements and receivables arising from straight-lining of rents primarily represent amounts accrued and unpaid from tenants in accordance with the terms of the respective leases, subject to the Company’s revenue recognition policy. An allowance for the uncollectible portion of tenant receivable is determined based upon an analysis of the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in Freehold, New Jersey in which the property is located. Management believes that the tenants receivable is fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its tenants receivable at December 31, 2017. Inventory Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventory may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserve for the difference between the cost and the market value. These reserve is recorded based on estimates. The Company did not record any inventory reserve at December 31, 2017. Property, Plant and Equipment Property, plant and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Investment In Real Estate and Depreciation Investment in real estate is carried at cost less accumulated depreciation. The Company depreciates real estate building on a straight-line basis over estimated useful life. The Company capitalizes all capital improvements associated with replacements, improvements or major repairs to real property that extend its useful life and depreciate them using the straight-line method over its estimated useful life. Real estate depreciation expense was $84,814 for the year ended December 31, 2017. The Company charges maintenance and repair costs that do not extend an asset’s useful life to expense as incurred. Intangible Assets Intangible assets consist of goodwill and patents and other technologies. Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in the business acquisition incurred on October 25, 2017. Goodwill is not amortized, but is tested for impairment at December 31, 2017. Patents and other technologies are being amortized on a straight-line method over the estimated useful life of 5 years. Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. 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. There were no intangible assets at December 31, 2016 and the Company did not record any impairment charge for the year ended December 31, 2016 Acquisition Consideration On October 25, 2017, GenExosome entered into and closed a Stock Purchase Agreement with Beijing Jieteng (GenExosome) Biotech Co. Ltd., a corporation incorporated in the People’s Republic of China (“Beijing GenExosome”) and Dr. Zhou, the sole shareholder of Beijing GenExosome, pursuant to which GenExosome acquired all of the issued and outstanding securities of Beijing GenExosome in consideration of a cash payment in the amount of $450,000, which shall be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). On October 25, 2017, Dr. Zhou was appointed to the board of directors of GenExosome and served as Co-chief executive officer of GenExosome. As of December 31, 2017, the unpaid acquisition consideration of $450,000 was included in due to related parties on the accompanying consolidated balance sheets. Deferred Rental Income Deferred rental income represents rental income collected but not earned as of the reporting date. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of December 31, 2017 and 2016, deferred rental income totaled $12,769 and $0, respectively. Value Added Tax Avalon Shanghai is subject to a value added tax (“VAT”) of 6% for providing medical related consulting services and Beijing GenExosome is subject to a VAT of 3% for performing development services and sales of related products developed. The amount of VAT liability is determined by applying the applicable tax rates to the invoiced amount of medical related consulting services provided and the invoiced amount of development services provided and sales of related products developed (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company reports revenue net of PRC’s value added tax for all the periods presented in the consolidated statements of operations and comprehensive loss. Revenue Recognition Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the purchase price is fixed or determinable and collectability is reasonably assured. Revenue Recognition (continued) Types of revenue: ● Rental revenue from leasing commercial property under operating leases with terms of generally two years or more. ● Service fees under consulting agreements with related parties to provide medical related consulting services to its clients. The Company is paid for its services by its clients pursuant to the terms of the written consulting agreements. Each contract calls for a fixed payment in a fixed period of time. ● Service fees under agreements to perform development services for hospitals. The Company does not perform contracts that are contingent upon successful results. ● Sales of developed products to hospitals in connection with performing development services. Revenue recognition criteria: ● The Company recognizes rental revenue from its commercial leases on a straight-line basis over the life of the lease including rent holidays, if any. Straight-line rent receivable consists of the difference between the tenants’ rents calculated on a straight-line basis from the date of lease commencement over the remaining terms of the related leases and the tenants’ actual rents due under the lease agreements and is included in tenants receivable in the accompanying consolidated balance sheets. Revenues associated with operating expense recoveries are recognized in the period in which the expenses are incurred. ● The Company recognizes revenue by providing medical related consulting services under written service contracts with its customers. Revenue related to its service offerings is recognized as the services are performed and amounts are earned, using the straight-line method over the term of the related services agreement. Prepayments, if any, received from customers prior to the services being performed are recorded as advance from customers. In these cases, when the services are performed, the amount recorded as advance from customers is recognized as revenue. ● Revenue from development services performed under hospital contracts is recognized when it is earned pursuant to the terms of the contract. Each contract calls for a fixed dollar amount with a specified time period. These contracts generally involve up-front payment. Revenue is recognized for these projects as services are provided. ● Revenue from sales of developed items to hospitals resulting from its development services, which call for the transfer of other items developed during the projects to the customers, is recognized when the item is shipped to the customer and title is transferred. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. Government Grant Government grants are recognized at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions are complied with. Real Property Operating Expenses Real property operating expenses consist of property management fees, property insurance, real estate taxes, depreciation, repairs and maintenance fees, utilities and other expenses related to the Company’s rental properties. Medical Related Consulting Services Costs Costs of medical related consulting services includes the cost of internal labor and related benefits, travel expenses related to consulting services, subcontractor costs, other related consulting costs, and other overhead costs. Subcontractor costs were costs related to medical related consulting services incurred by our subcontractor, such as medical professional’s compensation and travel costs. Development Services and Sales of Developed Products Costs Costs of development services and sales of developed items to hospitals includes inventory costs, materials and supplies costs, depreciation, internal labor and related benefits, and other overhead costs incurred. Stock-based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of Accounting Standards Codification (“ASC”) 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is recognized over the period of services or the vesting period, whichever is applicable. Compensation expense for unvested options to non-employees is re-measured at each balance sheet date and is being amortized over the vesting period of the options. Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in selling expenses. The Company did not incur any shipping and handling costs in the years ended December 31, 2017 and 2016. Research and Development Expenditures for research and product development costs are expensed as incurred. The Company did not incur any research and development costs during the years ended December 31, 2017 and 2016. Advertising and Marketing Costs All costs related to advertising and marketing are expensed as incurred. The Company did not incur any advertising and marketing expenses during the years ended December 31, 2017 and 2016. Income Taxes The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2017 and 2016, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. Tax year that remains subject to examination is the years ended December 31, 2017, 2016 and 2015. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of December 31, 2017 and 2016. Foreign Currency Translation The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company, AHS, Avalon RT 9, and GenExosome, is the U.S. dollar and the functional currency of Avalon Shanghai and Beijing GenExosome, is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. Asset and liability accounts at December 31, 2017 and 2016 were translated at 6.5067 RMB to $1.00 and at 6.9448 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rates. The average translation rates applied to the statements of operations for the years ended December 31, 2017 and 2016 were 6.7563 RMB and 6.6435 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. Comprehensive Loss Comprehensive loss is comprised of net (loss) income and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the years ended December 31, 2017 and 2016 consisted of net (loss) income and unrealized gain (loss) from foreign currency translation adjustment. Per Share Data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net (loss) income per share are computed by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of common stock options (using the treasury stock method). Common stock equivalents are not included in the calculation of diluted net (loss) income per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table presents a reconciliation of basic and diluted net (loss) income per share: Per Share Data (continued) Year Ended December 31, 2017 Year Ended December 31, 2016 Net (loss) income available to Avalon GloboCare Corp. for basic and diluted net (loss) income per share of common stock $ (3,464,285 ) $ 55,581 Weighted average common stock outstanding - basic and diluted 65,033,472 51,139,475 Net (loss) income per common share attributable to Avalon GloboCare Corp. - basic and diluted $ (0.05 ) $ 0.00 For the year ended December 31, 2017, stock options to purchase 2,290,000 shares of common stock have been excluded from the computation of diluted loss per share as their effect would be anti-dilutive. The Company did not have any common stock equivalents and potentially dilutive common stock outstanding during the year ended December 31, 2016. Non-controlling Interest As of December 31, 2017, Dr. Yu Zhou, director and Co-Chief Executive Officer of GenExosome who owned 40% of the equity interests of GenExosome, which is not under the Company’s control. Segment Reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the chief executive officer (“CEO”) and president of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company has determined that it has three reportable business segments: real property operating segment, medical related consulting services segment, and development services and sales of developed products segment. These reportable segments offer different types of services and products, have different types of revenue, and are managed separately as each requires different operating strategies and management expertise. Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions. Business Acquisition The Company accounts for business acquisition in accordance with ASC No. 805, Business Combinations. The assets acquired and liabilities assumed from the acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill. The result of operations of the acquired business is included in the Company’s operating result from the date of acquisition. Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows. Reverse Stock Split The Company effected a one-for-four reverse stock split of its common stock on October 18, 2016. All share and per share information has been retroactively adjusted to reflect this reverse stock split. Fiscal Year End The Company has adopted a fiscal year end of December 31st. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This pronouncement is effective for reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for the Company in the first fiscal quarter of 2018 on a prospective basis, and early adoption is permitted. The Company does not expect the standard to have a material impact on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and s |
ACQUISITION
ACQUISITION | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
ACQUISITION | NOTE 4 – ACQUISITION The Company accounts for acquisition using the acquisition method of accounting, whereby the results of operations are included in the financial statements from the date of acquisition. The purchase price is allocated to the acquired assets and assumed liabilities based on their estimated fair values at the date of acquisition, and any excess is allocated to goodwill. Effective October 25, 2017, pursuant to the Stock Purchase Agreement as discussed in elsewhere in this report, the Company’s majority owned subsidiary, GenExosome, acquired 100% of Beijing GenExosome. In according to the acquisition, Beijing GenExosome’s assets and liabilities were recorded at their fair values as of the effective date, October 25, 2017, and the results of operations of Beijing GenExosome are consolidated with results of operations of the Company, starting on October 25, 2017. The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Beijing GenExosome had occurred as of the beginning of the following period: Three Months Ended March 31, 2017 Net revenues $ 66,286 Net loss $ (1,056,378 ) Net loss attributable to Avalon GloboCare Corp. $ (1,053,082 ) Net loss per share $ (0.02 ) Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the period presented and is not intended to be a projection of future results. | NOTE 4 – ACQUISITION The Company accounts for acquisition using the acquisition method of accounting, whereby the results of operations are included in the financial statements from the date of acquisition. The purchase price is allocated to the acquired assets and assumed liabilities based on their estimated fair values at the date of acquisition, and any excess is allocated to goodwill. Effective October 25, 2017, pursuant to the Stock Purchase Agreement as discussed in Note 1, the Company’s majority owned subsidiary, GenExosome, acquired 100% of Beijing GenExosome. In according to the acquisition, Beijing GenExosome’s assets and liabilities were recorded at their fair values as of the effective date, October 25, 2017, and the results of operations of Beijing GenExosome are consolidated with results of operations of the Company, starting on October 25, 2017. The purchase price exceeded the fair value of net assets acquired by $397,569. The Company allocated the $397,569 excess to goodwill. The results of operations of Beijing GenExosome are included in the consolidated results of operations of the Company from the effective date of October 25, 2017 to December 31, 2017. For the period from the effective date of October 25, 2017 to December 31, 2017, revenue and net loss included in the consolidated statements of operations from Beijing GenExosome amounted to $26,276 and $30,327, respectively. In connection with the combination, for the year ended December 31, 2017, the Company incurred acquisition related costs of $101,236 which, pursuant to ASC 805, are expensed and included in professional fees on the accompanying consolidated statements of operations. In connection with the acquisition, the Company entered into an at will employment agreement with the former sole shareholder of Beijing GenExosome. The Company determined that the consideration under this employment agreement did not qualify as additional purchase consideration. The fair value of the assets acquired and liabilities assumed from Beijing GenExosome are as follows: October 25, 2017 Assets acquired: Cash $ 72,032 Inventory 1,081 Prepaid expenses 142 Security deposit 753 Property, plant and equipment 3,346 Intangible assets - goodwill 397,569 Total assets 474,923 Liabilities assumed: Accrued liabilities and other payables 24,923 Total liabilities 24,923 Purchase price $ 450,000 Net assets were valued at their respective carrying amounts, which the Company believes approximate their current fair values at the acquisition date. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. In December 2017, the Company assessed goodwill for any impairment and concluded that there were indicators of impairment as of December 31, 2017 and the Company calculated that the estimated undiscounted cash flows were less than the carrying amount of goodwill. Based on the Company’s analysis, the Company recognized an impairment loss of $397,569 for the year ended December 31, 2017, which reduced the value of goodwill resulted from the acquisition to zero (See Note 10). |
INVENTORY
INVENTORY | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
INVENTORY | NOTE 5 – INVENTORY At March 31, 2018 and December 31, 2017, inventory consisted of the following: March 31, 2018 December 31, 2017 Raw material $ 10,111 $ 2,667 10,111 2,667 Less: reserve for obsolete inventory — — $ 10,111 $ 2,667 | NOTE 5 – INVENTORY At December 31, 2017 and 2016, inventory consisted of the following: December 31, 2017 December 31, 2016 Raw material $ 2,667 $ — 2,667 — Less: reserve for obsolete inventory — — $ 2,667 $ — |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS At March 31, 2018 and December 31, 2017, prepaid expenses and other current assets consisted of the following: March 31, 2018 December 31, 2017 Prepaid professional fees $ 15,000 $ 65,000 Prepaid dues and subscriptions 11,168 49,167 Other 48,238 35,546 $ 74,406 $ 149,713 | NOTE 6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS At December 31, 2017 and 2016, prepaid expenses and other current assets consisted of the following: December 31, 2017 December 31, 2016 Prepaid professional fees $ 65,000 $ 32,004 Prepaid dues and subscriptions 49,167 — Prepayment for acquisition of real property — 700,000 Other 35,546 17,792 $ 149,713 $ 749,796 |
PREPAYMENT FOR LONG-TERM ASSETS
PREPAYMENT FOR LONG-TERM ASSETS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
PREPAYMENT FOR LONG-TERM ASSETS | NOTE 7 – PREPAYMENT FOR LONG-TERM ASSETS At March 31, 2018 and December 31, 2017, prepayment for long-term assets consisted of the following: March 31, 2018 December 31, 2017 Prepayment for manufacturing equipment purchased $ 47,714 $ 153,688 $ 47,714 $ 153,688 | NOTE 7 – PREPAYMENT FOR LONG-TERM ASSETS At December 31, 2017 and 2016, prepayment for long-term assets consisted of the following: December 31, 2017 December 31, 2016 Prepayment for manufacturing equipment purchased $ 153,688 $ — $ 153,688 $ — |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
PROPERTY, PLANT AND EQUIPMENT | NOTE 8 – PROPERTY AND EQUIPMENT At March 31, 2018 and December 31, 2017, property and equipment consisted of the following: Useful life March 31, 2018 December 31, 2017 Laboratory equipment 5 Years $ 122,837 $ 3,685 Office equipment and furniture 3 – 10 Years 31,954 31,440 Leasehold improvement 1.75 Years 25,407 24,551 180,198 59,676 Less: accumulated depreciation (21,783 ) (11,647 ) $ 158,415 $ 48,029 For the three months ended March 31, 2018 and 2017, depreciation expense of property and equipment amounted to $9,681 and $26, respectively, of which, $819 and $0 was included in real property operating expenses, $3,768 and $0 was included in costs of development services and sales of developed products, and $5,094 and $26 was included in other operating expenses, respectively. | NOTE 8 – PROPERTY, PLANT AND EQUIPMENT At December 31, 2017 and 2016, property, plant and equipment consisted of the following: Useful life December 31, 2017 December 31, 2016 Laboratory equipment 5 Years $ 3,685 $ — Office equipment and furniture 3 – 10 Years 31,440 320 Leasehold improvement 1.75 Years 24,551 — 59,676 320 Less: accumulated depreciation (11,647 ) (25 ) $ 48,029 $ 295 |
INVESTMENT IN REAL ESTATE
INVESTMENT IN REAL ESTATE | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Real Estate [Abstract] | ||
INVESTMENT IN REAL ESTATE | NOTE 9 – INVESTMENT IN REAL ESTATE At March 31, 2018 and December 31, 2017, investment in real estate consisted of the following: Useful life March 31, 2018 December 31, 2017 Commercial real property 39 Years $ 7,708,571 $ 7,708,571 Less: accumulated depreciation (116,619 ) (84,814 ) $ 7,591,952 $ 7,623,757 For the three months ended March 31, 2018 and 2017, depreciation expense of this commercial real property amounted to $31,805 and $0, which was included in real property operating expenses. | NOTE 9 – INVESTMENT IN REAL ESTATE At December 31, 2017 and 2016, investment in real estate consisted of the following: Useful life December 31, 2017 December 31, 2016 Commercial real property 39 Years $ 7,708,571 $ — Less: accumulated depreciation (84,814 ) — $ 7,623,757 $ — For the year ended December 31, 2017, depreciation expense of this commercial real property amounted to $84,814, which was included in real property operating expenses. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
INTANGIBLE ASSETS | NOTE 10 – INTANGIBLE ASSETS At March 31, 2018 and December 31, 2017, intangible assets consisted of the following: Useful Life March 31, 2018 December 31, 2017 Patents and other technologies 5 Years $ 1,583,260 $ 2,593,478 Goodwill — 397,569 Less: accumulated amortization (81,893 ) (86,449 ) Less: impairment loss — (1,321,338 ) $ 1,501,367 $ 1,583,260 NOTE 10 – INTANGIBLE ASSETS (continued) For the three months ended March 31, 2018 and 2017, amortization expense amounted to $81,893 and $0, respectively. Amortization of intangible assets attributable to future periods is as follows: Twelve-month periods ending March 31: Amortization amount 2019 $ 327,571 2020 327,571 2021 327,571 2022 327,571 2023 191,083 $ 1,501,367 | NOTE 10 – INTANGIBLE ASSETS On October 25, 2017, GenExosome entered into and closed an Asset Purchase Agreement with Yu Zhou, MD, PhD, pursuant to which the Company acquired four patents and other technologies from Dr. Zhou in consideration of $876,087 in cash and 500,000 shares of common stock of the Company and 400 shares of common stock of GenExosome (See Note 1). In connection with the intangible assets purchase, the fair value of 500,000 shares of the Company’s common stock given to acquire those intangible assets was $500,000 which was valued based on the most recent sale price of the Company’s common share and the fair value of 400 shares of GenExosome’s common stock given to acquire those intangible assets was $1,217,391 which was valued based on the most recent sale price of 600 shares of GenExosome’s common stock, which was sold to the Company on October 25, 2017 pursuant to the Securities Purchase Agreement entered into by GenExosome and the Company. To determine the fair value of GenExosome’s equity consideration given to acquire those intangible assets, the Company used the fair value of the Company’s common share since it was determined to be a better indicator of the fair value of the consideration given to acquire those intangible assets. The valuation of identifiable intangible assets acquired, representing developed technologies, reflects management’s estimates, and is amortized over the period of estimated benefit using the straight-line method and the estimated useful lives of five years. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets. In December 2017, the Company assessed its four patents and other technologies for any impairment and concluded that there were indicators of impairment as of December 31, 2017 and the Company calculated that the estimated undiscounted cash flows were less than the carrying amount of those patents and other technologies. Based on the Company’s analysis, the Company recognized an impairment loss of $923,769 for the year ended December 31, 2017, which reduced the value of four patents and other technologies purchased to $1,583,260. NOTE 10 – INTANGIBLE ASSETS (continued) In addition, in connection with the acquisition of Beijing GenExosome (See Note 4), the purchase price exceeded the fair value of net assets acquired by $397,569. The Company allocated the $397,569 excess to goodwill. Goodwill is not amortized, but is tested for impairment at December 31, 2017. In December 2017, the Company assessed its goodwill for any impairment and concluded that there were indicators of impairment as of December 31, 2017 and the Company calculated that the estimated undiscounted cash flows were less than the carrying amount of goodwill. Based on the Company’s analysis, the Company recognized an impairment loss of $397,569 for the year ended December 31, 2017, which reduced the value of goodwill acquired to zero. At December 31, 2017 and 2016, intangible assets consisted of the following: Useful Life December 31, 2017 December 31, 2016 Patents and other technologies 5 Years $ 2,593,478 $ — Goodwill 397,569 — Less: accumulated amortization (86,449 ) — Less: impairment loss (1,321,338 ) — $ 1,583,260 $ — For the years ended December 31, 2017 and 2016, amortization expense amounted to $86,449 and $0, respectively. Amortization of intangible assets attributable to future periods is as follows: Year ending December 31: Amortization amount 2018 $ 327,571 2019 327,571 2020 327,571 2021 327,571 2022 272,976 $ 1,583,260 |
ACCRUED LIABILITIES AND OTHER P
ACCRUED LIABILITIES AND OTHER PAYABLES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Payables and Accruals [Abstract] | ||
ACCRUED LIABILITIES AND OTHER PAYABLES | NOTE 11 – ACCRUED LIABILITIES AND OTHER PAYABLES At March 31, 2018 and December 31, 2017, accrued liabilities and other payables consisted of the following: March 31, 2018 December 31, 2017 Accrued professional fees $ 211,262 $ 82,913 Accrued dues and subscriptions 25,000 — Accrued payroll liability 7,036 6,767 Other 59,202 34,384 $ 302,500 $ 124,064 | NOTE 11 – ACCRUED LIABILITIES AND OTHER PAYABLES At December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following: December 31, 2017 December 31, 2016 Accrued interest $ 138,110 $ — Accrued professional fees 82,913 14,080 Other 41,151 8,254 $ 262,174 $ 22,334 |
LOAN PAYABLE
LOAN PAYABLE | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
LOAN PAYABLE | NOTE 12 – LOAN PAYABLE On April 19, 2017, the Company entered into a loan agreement, providing for the issuance of a loan in the principal amount of $2,100,000. The term of the loan is one year. On May 3, 2018, the Company signed an extension agreement with the maturity date of March 31, 2019. The annual interest rate for the loan is 10%. The loan is guaranteed by the Company’s Chairman, Mr. Wenzhao Lu. The Company repaid principal of $600,000 and $500,000 in November 2017 and in April 2018, respectively (See Note 22 – Loan Payable At March 31, 2018, the outstanding principal balance of the loan and related accrued and unpaid interest for the loan was $1,500,000 and $175,096, respectively. | NOTE 12 – LOAN PAYABLE On April 19, 2017, the Company entered into a loan agreement, providing for the issuance of a loan in the principal amount of $2,100,000. The term of the loan is one year. The annual interest rate for the loan is 10%. The loan is guaranteed by the Company’s Chairman, Mr. Wenzhao Lu. The Company repaid principal of $600,000 in the fourth quarter of 2017. At December 31, 2017, the outstanding principal balance of the loan and related accrued and unpaid interest for the loan was $1,500,000 and $138,110, respectively. |
VAT AND OTHER TAXES PAYABLE
VAT AND OTHER TAXES PAYABLE | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
VAT AND OTHER TAXES PAYABLE | NOTE 13 – VAT AND OTHER TAXES PAYABLE At March 31, 2018 and December 31, 2017, VAT and other taxes payable consisted of the following: March 31, 2018 December 31, 2017 Franchise tax due $ 27,498 $ — VAT payable — 819 Other taxes payable 6,859 2,178 $ 34,357 $ 2,997 | NOTE 13 – VAT AND OTHER TAXES PAYABLE At December 31, 2017 and 2016, VAT and other taxes payable consisted of the following: December 31, 2017 December 31, 2016 VAT payable $ 819 $ 8,768 Other taxes payable 2,178 2,502 $ 2,997 $ 11,270 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 14 – RELATED PARTY TRANSACTIONS Medical Related Consulting Services Revenue from Related Party During the three months ended March 31, 2018 and 2017, medical related consulting services revenue from related party was as follows: Three Months Ended March 31, 2018 Three Month Ended March 31, 2017 Medical related consulting services provided to: Shanghai Daopei (1) $ — $ 66,286 $ — $ 66,286 (1) Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. Accrued Liabilities and Other Payables – Related Parties At March 31, 2018 and December 31, 2017, the Company owed David Jin, its shareholder, chief executive officer, president and board member, of $17,457 and $15,387, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payable – related parties on the accompanying condensed consolidated balance sheets. At March 31, 2018 and December 31, 2017, the Company owed Yu Zhou, co-chief executive officer of GenExosome, of $8,024 and $24,540, respectively, for accrued payroll, travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payable – related parties on the accompanying condensed consolidated balance sheets. Due to Related Party In connection with the acquisition discussed in elsewhere in this report, the Company acquired Beijing GenExosome in cash payment of $450,000, which will be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). On October 25, 2017, Dr. Yu Zhou, the former sole shareholder of Beijing GenExosome, was appointed to the board of directors of GenExosome and served as co-chief executive officer of GenExosome. As of March 31, 2018 and December 31, 2017, the unpaid acquisition consideration of $450,000 was payable to Dr. Yu Zhou, co-chief executive officer and board member of GenExosome, and reflected as due to related parties on the accompanying condensed consolidated balance sheets. Real Property Management Agreement The Company pays a company, which is controlled by Wenzhao Lu, the Company’s major shareholder and chairman of the Board of Directors, for the management of its commercial real property located in New Jersey. The monthly property management fee is $5,417. The term of the property management agreement is two years commencing on May 5, 2017 and will expire on May 4, 2019. For the three months ended March 31, 2018 and 2017, the management fee related to the property management agreement amounted to $16,251. Shares Authorized The Company is authorized to issue 10,000,000 shares of preferred stock and 490,000,000 shares of common shares with a par value of $0.0001 per share. There are no shares of its preferred stock issued and outstanding as of March 31, 2018 and December 31, 2017. There are 70,278,622 shares of its common stock issued as of March 31, 2018 and December 31, 2017. There are 69,758,622 and 70,278,622 shares of its common stock outstanding as of March 31, 2018 and December 31, 2017, respectively. | NOTE 14 – RELATED PARTY TRANSACTIONS Medical Related Consulting Services Revenue from Related Parties and Accounts Receivable – Related Parties During the years ended December 31, 2017 and 2016, medical related consulting services revenue from related parties was as follows: Year Ended Year Ended Medical related consulting services provided to: Beijing Nanshan (1) $ 155,035 $ 162,500 Shanghai Daopei (2) 67,576 313,946 Hebei Yanda (3) — 140,000 $ 222,611 $ 616,446 (1) Beijing Nanshan is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. (2) Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. (3) Hebei Yanda is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. Accounts receivable – related parties, net of allowance for doubtful accounts, at December 31, 2017 and 2016 amounted to $0 and $70,228, respectively, and no allowance for doubtful accounts is deemed to be required on its accounts receivable – related parties at December 31, 2017 and 2016. Accrued Liabilities and Other Payables – Related Parties At December 31, 2017 and 2016, the Company owed David Jin, its shareholder, chief executive officer, president and board member, of $15,387 and $6,278, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payable – related parties on the accompanying consolidated balance sheets. At December 31, 2017 and 2016, the Company owed Meng Li, its shareholder, chief operating officer and board member, of $0 and $309, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying consolidated balance sheets. On October 17, 2016, the Company entered into a lease for office space in New Jersey with a related party (the “AHS Office Lease”). Pursuant to the AHS Office Lease, the monthly rent was $1,000. The AHS Office Lease was terminated in August 2017. As of December 31, 2017 and 2016, the accrued and unpaid rent expense related to this AHS Office Lease amounted to $0 and $2,000, respectively, which was included in accrued liabilities and other payables – related parties on the accompanying consolidated balance sheets. At December 31, 2017, the Company owed Yu Zhou, co-chief executive officer of GenExosome, of $24,540 for December 2017 accrued payroll, travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payable – related parties on the accompanying consolidated balance sheets. Due to Related Parties From time to time, David Jin, shareholder, chief executive officer, president and board member of the Company, provided advances to the Company to supplement its working capital needs. Those advances are short-term in nature, non-interest bearing, unsecured and payable on demand. During the year ended December 31, 2017, the Company repaid $500 working capital advance to David Jin. As of December 31, 2017 and 2016, the working capital advance balance was $0 and $500, respectively, which was reflected as due to related parties on the accompanying consolidated balance sheets. From time to time, Meng Li, shareholder, chief operating officer and board member of the Company, provided advances to the Company to supplement its working capital needs. Those advances are short-term in nature, non-interest bearing, unsecured and payable on demand. During the year ended December 31, 2017, the Company repaid $87,650 working capital advance to Meng Li. As of December 31, 2017 and 2016, the working capital advance was $0 and $87,650, respectively, which was reflected as due to related parties on the accompanying consolidated balance sheets. From time to time, Wenzhao Lu, major shareholder and chairman of the Board of Directors of the Company, provided advances to the Company to supplement its working capital needs. Those advances are short-term in nature, non-interest bearing, unsecured and payable on demand. During the year ended December 31, 2017, the Company received working capital advance from Wenzhao Lu of $20,000 and repaid $29,000 to him. As of December 31, 2017 and 2016, the working capital advance was $0 and $9,000, respectively, which was reflected as due to related parties on the accompanying consolidated balance sheets. During the year ended December 31, 2017, the Company received advance from a company, which is controlled by Wenzhao Lu, the Company’s major shareholder and chairman of the Board of Directors of the Company, of $190,000 for general working capital purpose. The advance is unsecured, non-interest bearing and repayable on demand, and repaid in full in year 2017. In connection with the acquisition discussed in Note 1 and Note 4, the Company acquired Beijing GenExosome in cash payment of $450,000, which will be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). On October 25, 2017, Dr. Yu Zhou, the former sole shareholder of Beijing GenExosome, was appointed to the board of directors of GenExosome and served as co-chief executive officer of GenExosome. As of December 31, 2017, the unpaid acquisition consideration of $450,000 was payable to Dr. Yu Zhou, co-chief executive officer and board member of GenExosome, and reflected as due to related parties on the accompanying consolidated balance sheets. Distribution to AHS’s Founders On September 14, 2016, AHS entered into a stock purchase agreement (the “September Agreement”) to acquire 1,500,000 shares of restricted common stock (the “Control Shares”) of Global Technologies Corp., which subsequently changed its name on October 18, 2016 to Avalon GloboCare Corp., for a purchase price of $230,000. Upon purchase of the Control Shares, AHS beneficially owned shares of common stock representing control of Global Technologies Corp.. AHS subsequently assigned the Control Shares to its three founders resulting in Wenzhao Lu receiving 900,000 shares, David Jin receiving 450,000 shares and Meng Li receiving 150,000 shares. AHS recorded the assignment as a distribution to its founders/owners with a corresponding debit to additional paid-in capital of $230,000, which was treated as a return of capital in the equity accounts and was recorded as a reduction in additional paid-in capital. Operating Lease On October 17, 2016, AHS entered into a lease for office space in New Jersey with a related party (the “AHS Office Lease”). Pursuant to the AHS Office Lease, the monthly rent is $1,000. The AHS Office Lease was terminated in August 2017. For the years ended December 31, 2017 and 2016, rent expense related to the AHS Office Lease amounted to $8,000 and $2,000, respectively. Real Property Management Agreement The Company pays a company, which is controlled by Wenzhao Lu, the Company’s major shareholder and chairman of the Board of Directors, for the management of its commercial real property located in New Jersey. The monthly property management fee is $5,417. The term of the property management agreement is two years commencing on May 5, 2017 and will expire on May 4, 2019. For the year ended December 31, 2017, the management fee related to the property management agreement amounted to $43,336. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 15 – INCOME TAXES The Company is governed by the Income Tax Law of the PRC and the U.S. Internal Revenue Code of 1986, as amended. Under the Income Tax Laws of PRC, Chinese companies are generally subject to an income tax at an effective rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. Avalon Shanghai, is subject to the statutory rate of 25%. Beijing GenExosome is subjected to PRC income tax at a preferential rate of 10% due to its small size with minimal taxable income in according to PRC taxes laws. The Company has a cumulative deficit from its foreign subsidiaries of approximately $183,000 as of December 31, 2017, which is included in the consolidated accumulated deficit. The U.S. tax reform bill that Congress voted to approve December 20, 2017, also known as the “Tax Cuts and Jobs Act”, made sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move to a territorial system for corporations that have overseas earnings. The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%. As of December 31, 2017, the Company has incurred an aggregate net operating loss of approximately $1,481,000 for income taxes purposes. The net operating loss carries forward for United States income taxes and may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, through 2037. Management believes that it appears more likely than not that the Company will not realize these tax benefits due to the Company’s limited operating history and continuing losses for United States income taxes purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset benefit related to the U.S. net operating loss carry forward to reduce the asset to zero. Management will review this valuation allowance periodically and make adjustments as necessary. The Company’s (loss) income before income taxes includes the following components: Year Ended December 31, 2017 Year Ended December 31, 2016 United States loss before income taxes $ (3,794,872 ) $ (10,202 ) China (loss) income before income taxes (254,773 ) 87,710 Total (loss) income before income taxes $ (4,049,645 ) $ 77,508 Note: included in the United States loss before income taxes is $1,433,074, which will not be included in the Company’s consolidated income tax return, because the Company owns only 60% of GenExosome. The U.S. tax law requires 80% ownership to consolidate. Components of income taxes expense consisted of the following: Year Ended December 31, 2017 Year Ended December 31, 2016 Current: U.S. federal $ — $ — U.S. state and local — — China — 21,927 Total current income taxes expense $ — $ 21,927 Deferred: U.S. federal $ — $ — U.S. state and local — — China — — Total deferred income taxes expense $ — $ — Total income taxes expense $ — $ 21,927 The table below summarizes the differences between the U.S. statutory rate and the Company’s effective tax rate for the years ended December 31, 2017 and 2016: Year Ended December 31, 2017 Year Ended December 31, 2016 U.S. federal rate 34.0 % 34.0 % U.S. state rate 5.0 % 5.0 % Non-deductible expenses (22.3 )% — U.S. effective rate in excess of China tax rate (1.0 )% (15.8 )% U.S. valuation allowance (15.7 )% 5.1 % Total provision for income taxes 0.0 % 28.3 % For the year ended December 31, 2017, the Company did not incur any income taxes expense since it did not generate any taxable income in 2017. For the year ended December 31, 2016, income taxes expense related to our operations in the PRC amounted to $21,927. The Company’s approximate net deferred tax assets as of December 31, 2017 and 2016 were as follows: Deferred tax assets: December 31, 2017 December 31, 2016 Net U.S. operating loss carryforward $ 420,695 $ 43,904 Valuation allowance (420,695 ) (43,904 ) Net deferred tax assets $ — $ — At December 31, 2017 and 2016, the valuation allowance was $420,695 and $43,904 related to the U.S. net operating loss carryforward, respectively. During the year ended December 31, 2017, the valuation allowance increased by approximately $377,000. The Company has been notified and assessed an IRS Section 6038 penalty of $10,000 for failure to file a foreign entity tax disclosure. The Company has appealed the penalty and awaits the Internal Revenue Service’s review of the appeal. There is no assurance such appeal will be successful. The Company does not have any significant uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2017, 2016 and 2015 Corporate Income Tax Returns are subject to Internal Revenue Service examination. |
EQUITY
EQUITY | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
EQUITY | NOTE 15 – EQUITY Shares Authorized The Company is authorized to issue 10,000,000 shares of preferred stock and 490,000,000 shares of common shares with a par value of $0.0001 per share. There are no shares of its preferred stock issued and outstanding as of March 31, 2018 and December 31, 2017. There are 70,278,622 shares of its common stock issued as of March 31, 2018 and December 31, 2017. There are 69,758,622 and 70,278,622 shares of its common stock outstanding as of March 31, 2018 and December 31, 2017, respectively. Common Shares Issued for Share Subscription Agreement On March 3, 2017, the Company entered into and closed a Subscription Agreement with an accredited investor (the “March 2017 Accredited Investor”) pursuant to which the March 2017 Accredited Investor purchased 3,000,000 shares of the Company’s common stock (“March 2017 Shares”) for a purchase price of $3,000,000 (the “Purchase Price”). The offer, sale and issuance of the above securities was made to an accredited investor and the Company relied upon the exemptions contained in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated there under with regard to the sale. No advertising or general solicitation was employed in offering the securities. The offer and sale was made to an accredited investor and transfer of the common stock issued was restricted by the Company in accordance with the requirements of the Securities Act of 1933, as amended. The Company, Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”), Beijing DOING Biomedical Technology Co., Ltd. (“DOING”), who is an unaffiliated third party, and the March 2017 Accredited Investor entered into a Share Subscription Agreement whereby the parties acknowledged, among other things, that DOING agreed to transfer the Purchase Price to Avalon Shanghai on behalf of the March 2017 Accredited Investor and the March 2017 Accredited Investor agreed to transfer the March 2017 Shares to DOING upon DOING completing the registration of the acquisition of the March 2017 Shares with the Beijing Commerce Commission (“BCC”) and obtaining an Enterprise Overseas Investment Certificate (the “Investment Certificate”) from BCC. If DOING fails to complete the registration and acquire the Investment Certificate within one year of the closing then Avalon Shanghai shall transfer $3,000,000 with an annual interest of 20% to DOING upon the request of DOING (the “BCC Repayment Obligation”). As of March 31, 2018, the Company is obligated to DOING in the principal amount of $3,000,000. The BCC Repayment Obligation is a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. Further, Wenzhao Lu, a director and shareholder of the Company, and DOING entered into a Warranty Agreement. Pursuant to the Warranty Agreement, Mr. Lu agreed to (i) cause the Company to be liable to DOING in the event the March 2017 Accredited Investor defaults in its obligations to DOING, (ii) cause the March 2017 Accredited Investor to transfer the March 2017 Shares to DOING upon DOING’s receipt of the Investment Certificate from BCC, (iii) within three years from the date of the Warranty Agreement, DOING may require Mr. Lu to acquire the March 2017 Shares at $1.20 per share upon three-month notice, and (iv) in the event Mr. Lu does not acquire the March 2017 Shares within the three-month period, interest of 15% per annum will be added to the purchase price. The Company received cash payment of $3,000,000 as an earnest money from DOING in connection with the 3,000,000 common stock issued to the March 2017 Accredited Investor who is an entrusted party that holds the shares on behalf of DOING and recorded the $3,000,000 as refundable deposit as of March 31, 2018 and December 31, 2017 on the accompanying consolidated balance sheets. On April 23, 2018, the Company, Avalon Shanghai, DOING and March 2017 Accredited Investor entered into a Supplementary Agreement Related to Share Subscription pursuant to which Avalon Shanghai agreed to pay RMB 8,256,000 (approximately $1.3 million based on the exchange rate on April 23, 2018) to DOING representing one-third of the DOING Investment plus 20% interest for the one-third DOING Investment resulting in a reduction in the March 2017 Shares by one-third to 2,000,000 shares. Further, the parties agreed that the BCC Repayment Obligation shall be extended to July 31, 2018 at which time DOING may require that the Company pay $2,000,000 plus 20% interest to DOING resulting in the cancellation of the remaining March 2017 Shares. However, DOING may, in its discretion, require that the remaining March 2017 Shares be transferred to a new nominal holder who shall pay the required subscription price, which funds will, in turn, be used to satisfy the BCC Repayment Obligation. As of March 31, 2018, the accrued and unpaid interest for the $1 million BCC Repayment Obligation was $200,000, which was paid in full in May 2018 (See Note 22 - DOING Biomedical Technology Co., Ltd. Investment As of the report date, the Company is subject to the contingency of paying interest liability for the remaining $2,000,000 BCC Repayment Obligation upon the request of DOING. The Company records accrual for such contingency based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history and the specifics of this matter. The Company did not accrue any interest for the remaining $2,000,000 BCC Repayment Obligation since Treasury Stock The Company records treasury stock using the cost method. On March 27, 2018, the Company repurchased 520,000 shares of its common stock from a third party through a privately negotiated transaction at an aggregate price of $522,500, of which $2,500 was paid to an escrow agent as share repurchase cost. Options The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at March 31, 2018: Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding at March 31, 2018 Range of Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at March 31, 2018 Weighted Average Exercise Price $ 0.50 2,000,000 8.87 $ 0.50 777,778 $ 0.50 1.49 60,000 4.08 1.49 60,000 1.49 1.00 230,000 3.02 1.00 110,000 1.00 2.50 120,000 4.76 2.50 30,000 2.50 $ 0.50–2.50 2,410,000 7.98 $ 0.67 977,778 $ 0.68 Stock options granted to employee and director Employee and director stock option activities for the three months ended March 31, 2018 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 2,110,000 $ 0.54 Granted 120,000 2.50 Exercised — — Outstanding at March 31, 2018 2,230,000 0.65 Options exercisable at March 31, 2018 887,778 $ 0.65 Options expected to vest 1,342,222 $ 0.65 The fair values of these options granted to employee and director during the three months ended March 31, 2018 were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: Dividend rate 0 Terms (in years) 5.0 Volatility 185.28 % Risk-free interest rate 2.25 % The aggregate fair value of the options granted to employee and director during the three months ended March 31, 2018 was $289,150, of which, $72,287 has been reflected as compensation and related benefits on the accompanying unaudited condensed consolidated statements of operations because the options were fully earned and non-cancellable. As of March 31, 2018, the aggregate value of nonvested employee and director options was $1,849,616, which will be amortized as stock-based compensation expense as the options are vesting, over the remaining 1.83 years. The aggregate intrinsic values of the employee and director stock options outstanding and the employee and director stock options exercisable at March 31, 2018 was $3,945,700 and $1,568,956, respectively. A summary of the status of the Company’s nonvested employee and director stock options granted as of March 31, 2018 and changes during the three months ended March 31, 2018 is presented below: Options (continued) Number of Options Weighted Average Exercise Price Grant Date Fair Value Nonvested at December 31, 2017 1,428,889 $ 0.51 $ 1,876,079 Granted 120,000 2.50 289,150 Vested (206,667 ) (0.81 ) (315,613 ) Forfeited — — — Nonvested at March 31, 2018 1,342,222 $ 0.65 $ 1,849,616 Stock options granted to non-employee Non-employee stock option activities for the three months ended March 31, 2018 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 180,000 $ 1.00 Granted — — Vested (90,000 ) (1.00 ) Exercised — — Outstanding at March 31, 2018 90,000 1.00 Options exercisable at March 31, 2018 90,000 $ 1.00 Options expected to vest 90,000 $ 1.00 Stock-based compensation expense associated with stock options granted to non-employee is recognized as the stock options vest. The stock-based compensation expense related to non-employee will fluctuate as the fair value of the Company’s common stock fluctuates. The fair values of these non-employee options vested in the three months ended March 31, 2018 and nonvested non-employee options as of March 31, 2018 were estimated using the Black-Scholes option-pricing model with the following assumptions: Dividend rate 0 Terms (in years) 3.0 Volatility 183.23% - 188.29% Risk-free interest rate 2.29% - 2.37% As of March 31, 2018, the aggregate value of nonvested non-employee options was $67,398, which will be amortized as stock-based compensation expense over the remaining 0.08 years. The aggregate intrinsic values of the non-employee stock options outstanding and the non-employee stock options exercisable at March 31, 2018 was $253,800 and $126,900, respectively. A summary of the status of the Company’s nonvested non-employee stock options granted as of March 31, 2018 and changes during the three months ended March 31, 2018 is presented below: Number of Options Weighted Average Exercise Price Fair Value at March 31, 2018 Nonvested at December 31, 2017 180,000 $ 1.00 Granted — — Vested (90,000 ) (1.00 ) Forfeited — — Nonvested at March 31, 2018 90,000 $ 1.00 $ 202,193 | NOTE 16 – EQUITY Shares Authorized The Company is authorized to issue 10,000,000 shares of preferred stock and 490,000,000 shares of common shares with a par value of $0.0001 per share. There are no shares of its preferred stock issued and outstanding as of December 31, 2017 and 2016. There are 70,278,622 and 61,628,622 shares of its common stock issued and outstanding as of December 31, 2017 and 2016, respectively. Common Shares Issued for Services On October 19, 2016, pursuant to a legal service agreement, the Company issued 1,056,122 shares of its common stock to a third party for legal services rendered. These shares were valued at the fair value of services rendered at $21,500. For the year ended December 31, 2016, in connection with the issuance of these shares, the Company recorded stock-based professional fees of $21,500. On October 19, 2016, pursuant to a consulting service agreement, the Company issued 1,552,500 shares of its common stock to a third party for consulting services rendered in the areas of capital markets advisory. These shares were valued at the fair value of services rendered at $31,050. In connection with the issuance of these shares, the Company recorded stock-based professional fees of $31,050 for the year ended December 31, 2016. Common Shares Sold for Cash On December 19, 2016, the Company sold 7,270,000 shares of common stock at a purchase price of $0.50 per share to several investors pursuant to subscription agreements. The Company did not engage a placement agent with respect to the sale. The Company received proceeds of $3,635,000. Common Shares Sold for Cash (continued) During the fourth quarter of 2017, the Company sold 5,150,000 shares of common stock at a purchase price of $1.00 per share to several investors pursuant to subscription agreements. The Company received net proceeds of $5,099,375, net of placement agent service fee of $50,625. The offer, sale and issuance of the above securities was made to accredited investors and the Company relied upon the exemptions contained in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated there under with regard to the sale. No advertising or general solicitation was employed in offering the securities. The offer and sales were made to accredited investors and transfer of the common stock issued was restricted by the Company in accordance with the requirements of the Securities Act of 1933, as amended. The accredited investors acknowledged that they were not aware of nor did it review any registration statement or prospectus filed by the Company with the SEC. AHS’s Founders’ Contribution During the year ended December 31, 2016, AHS’s founders contributed $141,000 to the Company for working capital needs and the Company recorded an increase in additional paid-in capital. Distribution of Avalon GloboCare Corp’s Shares to AHS’s Founders During the year ended December 31, 2016, AHS made a distribution of Avalon GloboCare Corp.’s shares to AHS’s three founders/owners which was treated as a return of capital in the equity accounts and was recorded as a reduction in additional paid-in capital. Common Shares Issued for Share Subscription Agreement On March 3, 2017, the Company entered into and closed a Subscription Agreement with an accredited investor (the “March 2017 Accredited Investor”) pursuant to which the March 2017 Accredited Investor purchased 3,000,000 shares of the Company’s common stock (“March 2017 Shares”) for a purchase price of $3,000,000 (the “Purchase Price”). The offer, sale and issuance of the above securities was made to an accredited investor and the Company relied upon the exemptions contained in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated there under with regard to the sale. No advertising or general solicitation was employed in offering the securities. The offer and sale was made to an accredited investor and transfer of the common stock issued was restricted by the Company in accordance with the requirements of the Securities Act of 1933, as amended. The Company, Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”), Beijing DOING Biomedical Technology Co., Ltd. (“DOING”), who is an unaffiliated third party, and the March 2017 Accredited Investor entered into a Share Subscription Agreement whereby the parties acknowledged, among other things, that DOING agreed to transfer the Purchase Price to Avalon Shanghai on behalf of the March 2017 Accredited Investor and the March 2017 Accredited Investor agreed to transfer the March 2017 Shares to DOING upon DOING completing the registration of the acquisition of the March 2017 Shares with the Beijing Commerce Commission (“BCC”) and obtaining an Enterprise Overseas Investment Certificate (the “Investment Certificate”) from BCC. If DOING fails to complete the registration and acquire the Investment Certificate within one year of the closing then Avalon Shanghai shall transfer $3,000,000 with an annual interest of 20% to DOING upon the request of DOING (the “BCC Repayment Obligation”). As of the date hereof, the Company is obligated to DOING in the principal amount of $3,000,000. The BCC Repayment Obligation is a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. Further, Wenzhao Lu, a director and shareholder of the Company, and DOING entered into a Warranty Agreement. Pursuant to the Warranty Agreement, Mr. Lu agreed to (i) cause the Company to be liable to DOING in the event the March 2017 Accredited Investor defaults in its obligations to DOING, (ii) cause the March 2017 Accredited Investor to transfer the March 2017 Shares to DOING upon DOING’s receipt of the Investment Certificate from BCC, (iii) within three years from the date of the Warranty Agreement, DOING may require Mr. Lu to acquire the March 2017 Shares at $1.20 per share upon three-month notice, and (iv) in the event Mr. Lu does not acquire the March 2017 Shares within the three-month period, interest of 15% per annum will be added to the purchase price . Common Shares Issued for Share Subscription Agreement (continued) The Company received cash payment of $3,000,000 as an earnest money from DOING in connection with the 3,000,000 common stock issued to the March 2017 Accredited Investor who is an entrusted party that holds the shares on behalf of DOING and recorded the $3,000,000 as refundable deposit on the accompanying consolidated balance sheets. Upon DOING completing the registration of the acquisition of the March 2017 Shares with the BCC and obtaining an Enterprise Overseas Investment Certificate from BCC, the Company will cancel the stock certificate issued under the March 2017 Accredited Investor’s name as an entrusted holder of the shares and the Company will issue a new stock certificate under DOING’s name. The $3,000,000 refundable deposit, which paid by DOING as an earnest money will be applied as the proceeds for issuance of the 3,000,000 shares of the Company’s common stock under DOING’s name at the closing date . The Company is subject to the contingency of paying interest liability upon the request of DOING if DOING fails to complete the registration and obtain the Enterprise Overseas Investment Certificate within one year. The Company records accrual for such contingency based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history and the specifics of this matter. The Company did not accrue any interest for the BCC Repayment Obligation since Common Shares Issued for Intangible Assets Purchased On October 25, 2017, GenExosome entered into and closed an Asset Purchase Agreement with Yu Zhou, MD, PhD, pursuant to which the Company acquired four patents and other technologies from Dr. Zhou in consideration of $876,087 in cash and 500,000 shares of common stock of the Company and 400 shares of common stock of GenExosome (See Note 1). The fair value of 500,000 shares of the Company’s common stock given to acquire those intangible assets was $500,000 which was valued based on the most recent sale price of the Company’s common share. A portion of consideration given for the intangible assets acquisition is in the form of GenExosome’s equity interest. The fair value of 400 shares of GenExosome’s common stock given to acquire those intangible assets was $1,217,391 which was valued based on the most recent sale price of 600 shares of GenExosome’s common stock, which was sold to the Company on October 25, 2017 pursuant to the Securities Purchase Agreement entered into by GenExosome and the Company. The fair value of 400 shares of GenExosome’s common stock was recorded as additional paid-in capital. To determine the fair value of GenExosome’s equity consideration given to acquire those intangible assets, the Company used the fair value of equity interest issued since it was determined to be a better indicator than the fair value of the intangible assets acquired. Therefore, the measurement of fair value of GenExosome’s equity interest is based on the fair value of the 400 shares of GenExosome’s common stock given for the intangible assets acquisition since it is determined to be more clearly evident and, thus, more reliably measurable. Options The Company did not have any options activity during the year ended December 31, 2016. Employee stock option activities for the year ended December 31, 2017 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2016 — $ — Granted 2,110,000 0.54 Exercised — — Outstanding at December 31, 2017 2,110,000 0.54 Options exercisable at December 31, 2017 681,111 $ 0.59 Options expected to vest 1,428,889 $ 0.51 Options (continued) Non-employee stock option activities for the year ended December 31, 2017 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2016 — $ — Granted 180,000 1.00 Exercised — — Outstanding at December 31, 2017 180,000 1.00 Options exercisable at December 31, 2017 — $ — Options expected to vest 180,000 $ 1.00 During the year ended December 31, 2017, the Company granted 2,000,000 options to its Chief Financial Officer (“CFO”) at a fixed exercise price of $0.50 per share and granted 60,000 and 50,000 options to its three directors at a fixed exercise price of $1.49 and $1.00, respectively, per share. The 2,000,000 options granted to the Company’s CFO are exercisable for ten years and the 110,000 options granted to the Company’s three directors are exercisable for five years. In addition, the Company granted 180,000 options to a consulting services provider at a fixed exercise price of $1.00 per share for a term of three years in the fourth quarter of 2017. The fair value of these options granted during the year ended December 31, 2017 was determined using the Black-Scholes option-pricing model and using the following assumptions: Dividend rate 0 Terms (in years) 3.0-10.0 Volatility 298.49% to 597.16% Risk-free interest rate 1.74% to 2.40% The aggregate fair value of the options granted to employee and directors during the year ended December 31, 2017 was $2,719,960, of which, $843,881 has been reflected as compensation and related benefits on the accompanying consolidated statements of operations because the options were fully earned and non-cancellable. As of December 31, 2017, the aggregate value of nonvested employee options was $1,876,079, which will be amortized as stock-based compensation expense as the options are vesting, over the remaining 2.1 years. The aggregate fair value of the options granted to non-employee during the year ended December 31, 2017 was $447,348, of which, $149,116 has been reflected as professional fees on the accompanying consolidated statements of operations. As of December 31, 2017, the aggregate value of nonvested non-employee options was $298,232, which will be amortized as stock-based compensation expense over the remaining 0.33 years. The aggregate intrinsic values of the stock options outstanding and the stock options exercisable at December 31, 2017 was $4,405,600 and $1,297,822, respectively. A summary of the status of the Company’s nonvested employee stock options granted as of December 31, 2017 and changes during the year ended December 31, 2017 is presented below: Number of Options Weighted Average Exercise Price Grant Date Fair Value Nonvested at December 31, 2016 — $ — $ — Granted 2,110,000 0.54 2,719,960 Vested 681,111 0.59 843,881 Forfeited — — — Nonvested at December 31, 2017 1,428,889 $ 0.51 $ 1,876,079 Options (continued) A summary of the status of the Company’s nonvested non-employee stock options granted as of December 31, 2017 and changes during the year ended December 31, 2017 is presented below: Number of Options Weighted Average Exercise Price Fair Value at December 31, 2017 Nonvested at December 31, 2016 — $ — $ — Granted 180,000 1.00 447,348 Vested — — — Forfeited — — — Nonvested at December 31, 2017 180,000 $ 1.00 $ 447,348 The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at December 31, 2017: Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding at December 31, 2017 Range of Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at December 31, 2017 Weighted Average Exercise Price $ 0.50 2,000,000 9.11 $ 0.50 611,111 $ 0.50 1.49 60,000 4.32 1.49 60,000 1.49 1.00 230,000 3.27 1.00 10,000 1.00 $ 0.50–1.49 2,290,000 8.40 $ 0.58 681,111 $ 0.59 |
STATUTORY RESERVE
STATUTORY RESERVE | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
STATUTORY RESERVE | NOTE 16 - STATUTORY RESERVE Avalon Shanghai and Beijing GenExosome operate in the PRC, are required to reserve 10% of their net profit after income tax, as determined in accordance with the PRC accounting rules and regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business enterprises for each year. The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years, before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends. The Company did not make any appropriation to statutory reserve for Avalon Shanghai and Beijing GenExosome during the three months ended March 31, 2018 as they incurred net losses in the period. | NOTE 17 - STATUTORY RESERVE Avalon Shanghai and Beijing GenExosome operate in the PRC, are required to reserve 10% of their net profit after income tax, as determined in accordance with the PRC accounting rules and regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business enterprises for each year. The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years, before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends. The Company made an appropriation to statutory reserve for Avalon Shanghai of $6,578 during the year ended December 31, 2016. |
CONCENTRATIONS
CONCENTRATIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | ||
CONCENTRATIONS | NOTE 17 - CONCENTRATIONS Customers The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the three months ended March 31, 2018 and 2017. Customer Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 A 27% 0 B 18% 0 C 14% 0 B (Shanghai Daopei, a related party) * 100% *Less than 10% The largest customer accounted for 37.4% of the Company’s total outstanding accounts receivable and tenants receivable at March 31, 2018. Two customers accounted for 48.9% of the Company’s total outstanding accounts receivable and tenants receivable at December 31, 2017. Suppliers No supplier accounted for 10% or more of the Company’s purchase during the three months ended March 31, 2018 and 2017. The Company did not have any outstanding accounts payable at March 31, 2018. One supplier accounted for 100% of the Company’s total outstanding accounts payable at December 31, 2017. Concentrations of Credit Risk At March 31, 2018 and December 31, 2017, cash balances in the PRC are $1,251,993 and $1,327,009, respectively, are uninsured. The Company has not experiencd any losses in PRC bank accounts and believes it is not exposed to any risks on its cash in PRC bank accounts. The Company maintains its cash in United States bank and financial institution deposits that at times may exceed federally insured limits. At March 31, 2018 and December 31, 2017, the Company’s cash balances in United States bank accounts had approximately $182,000 and $1,162,000 in excess of the federally-insured limits, respectively. The Company has not experienced any losses in its United States bank accounts through and as of the date of this report. | NOTE 21 - CONCENTRATIONS Customers The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the years ended December 31, 2017 and 2016. Customer Year Ended December 31, 2017 Year Ended December 31, 2016 A (Beijing Nanshan, a related party) 14% 26% B (Shanghai Daopei, a related party) * 51% C (Hebei Yanda, a related party) * 23% D 20% 0 E 13% 0 F 11% 0 *Less than 10% Two customers accounted for 48.9% of the Company’s total outstanding accounts receivable and tenants receivable at December 31, 2017. One customer, who was a related party, accounted for 100% of the Company’s total outstanding accounts receivable at December 31, 2016. Suppliers No supplier accounted for 10% or more of the Company’s purchase during the years ended December 31, 2017 and 2016. One supplier accounted for 100% of the Company’s total outstanding accounts payable at December 31, 2017. No supplier accounted for 10% or more of the Company’s total outstanding accounts payable at December 31, 2016. Concentrations of Credit Risk At December 31, 2017 and 2016, cash balances in the PRC are $1,327,009 and $2,525,630, respectively, are uninsured. The Company has not experienced any losses in PRC bank accounts and believes it is not exposed to any risks on its cash in PRC bank accounts. The Company maintains its cash in United States bank and financial institution deposits that at times may exceed federally insured limits. At December 31, 2017 and 2016, the Company’s cash balances in United States bank accounts had approximately $1,162,000 and $80,000 in excess of the federally-insured limits, respectively. The Company has not experienced any losses in its United States bank accounts through and as of the date of this report. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | ||
SEGMENT INFORMATION | NOTE 18 – SEGMENT INFORMATION For the three months ended March 31, 2018, the Company operated in three reportable business segments - (1) the real property operating segment, (2) the performing development services for hospitals and sales of related products developed to hospitals segment, and (3) the medical related consulting services segment. For the three months ended March 31, 2017, the Company operated in one reportable business segment – the medical related consulting services segment. The Company’s reportable segments are strategic business units that offer different services and products. They are managed separately based on the fundamental differences in their operations. Information with respect to these reportable business segments for the three months ended March 31, 2018 and 2017 was as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Revenues Real property operating $ 296,623 $ — Development services and sales of developed products 11,290 — Medical related consulting services – related party — 66,286 307,913 66,286 Depreciation and amortization Real property operating 32,624 — Development services and sales of developed products 86,749 — Medical related consulting services – related party 4,006 26 123,379 26 Interest expense Real property operating 236,986 — Development services and sales of developed products — — Medical related consulting services – related party — — 236,986 — Net loss Real property operating (237,700 ) — Development services and sales of developed products (173,474 ) — Medical related consulting services (100,132 ) (549,333 ) Other (a) (1,039,663 ) — $ (1,550,969 ) $ (549,333 ) Identifiable long-lived tangible assets at March 31, 2018 and December 31, 2017 March 31, 2018 December 31, 2017 Real property operating $ 7,612,747 $ 7,645,371 Development services and sales of developed products 120,396 5,857 Medical related consulting services 17,224 20,558 $ 7,750,367 $ 7,671,786 Identifiable long-lived tangible assets at March 31, 2018 and December 31, 2017 March 31, 2018 December 31, 2017 United States $ 7,613,567 $ 7,646,270 China 136,800 25,516 $ 7,750,367 $ 7,671,786 (a) The Company does not allocate any general and administrative expense of its being a public company activities to its reportable segments as these activities are managed at a corporate level. | NOTE 19 – SEGMENT INFORMATION For the year ended December 31, 2017, the Company operated in three reportable business segments - (1) the real property operating segment, (2) the medical related consulting services segment, and (3) the performing development services for hospitals and sales of related products developed to hospitals segment. For the year ended December 31, 2016, the Company operated in one reportable business segment – the medical related consulting services segment. The Company’s reportable segments are strategic business units that offer different services and products. They are managed separately based on the fundamental differences in their operations. Information with respect to these reportable business segments for the years ended December 31, 2017 and 2016 was as follows: Year Ended Year Ended December 31, 2017 December 31, 2016 Revenues Real property operating $ 828,663 $ — Medical related consulting services 222,611 616,446 Development services and sales of developed products 26,276 — 1,077,550 616,446 Depreciation and amortization Real property operating 86,135 — Medical related consulting services 8,774 26 Development services and sales of developed products 86,728 — 181,637 26 Interest expense Real property operating 138,110 — Medical related consulting services — — Development services and sales of developed products — — 138,110 — Net (loss) income Real property operating (309,415 ) — Medical related consulting services (385,515 ) 55,581 Development services and sales of developed products (1,463,401 ) — Other (a) (1,891,314 ) — $ (4,049,645 ) $ 55,581 Identifiable long-lived tangible assets at December 31, 2017 and 2016 December 31, 2017 December 31, 2016 Real property operating $ 7,645,371 $ — Medical related consulting services 20,558 295 Development services and sales of developed products 5,857 — $ 7,671,786 $ 295 Identifiable long-lived tangible assets at December 31, 2017 and 2016 December 31, 2017 December 31, 2016 United States $ 7,646,270 $ — China 25,516 295 $ 7,671,786 $ 295 (a) The Company does not allocate any general and administrative expense of its being a public company activities to its reportable segments as these activities are managed at a corporate level. |
NONCONTROLLING INTEREST
NONCONTROLLING INTEREST | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | ||
NONCONTROLLING INTEREST | NOTE 19 – NONCONTROLLING INTEREST As of March 31, 2018, Dr. Yu Zhou, director and Co-Chief Executive Officer of GenExosome, who owned 40% of the equity interests of GenExosome, which is not under the Company’s control. The following is a summary of noncontrolling interest activities in the three months ended March 31, 2018. Amount Noncontrolling interest at December 31, 2017 $ (585,394 ) Net loss attributable to noncontrolling interest (69,390 ) Foreign currency translation adjustment attributable to noncontrolling interest 160 Noncontrolling interest at March 31, 2018 $ (654,624 ) | NOTE 18 – NONCONTROLLING INTEREST As of December 31, 2017, Dr. Yu Zhou, director and Co-Chief Executive Officer of GenExosome who owned 40% of the equity interests of GenExosome, which is not under the Company’s control. The following is a summary of noncontrolling interest activities in the year ended December 31, 2017. Amount Noncontrolling interest at December 31, 2016 $ — Net loss attributable to noncontrolling interest (585,360 ) Foreign currency translation adjustment attributable to noncontrolling interest (34 ) Noncontrolling interest at December 31, 2017 $ (585,394 ) |
COMMITMENTS AND CONTINCENGIES
COMMITMENTS AND CONTINCENGIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINCENGIES | NOTE 20 – COMMITMENTS AND CONTINCENGIES Severance Payments 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 March 31, 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. Investor Relations Service Contract In October 2017, the Company entered into an investor relations service agreement with a company who has agreed to provide investor relations services to the Company. The Company may terminate the agreement at any time after December 31, 2017 by providing 30 days written notice. In accordance to this service agreement, the Company pays a service fee of $5,000 per month in cash and issues $15,000 of restricted shares at the close of each quarter based on the closing price of the Company’s stock on the last day of the quarter. At March 31, 2018 and December 31, 2017, the accrued investor relations service fees related to the service agreement was $30,000 and $10,000, respectively, which was included in accrued liabilities and other payables on the accompanying condensed consolidated balance sheets. Consulting Service Agreement In November 2017, the Company entered into a consulting service agreement with a company who has agreed to provide consulting services to the Company. The term of this agreement is 6 months. In accordance to this service agreement, the Company paid cash $30,000 and will issue a stock grant equal to the sum of $15,000 at a time mutually agreed for work has been completed through October 31, 2017. In addition, the Company pays a flat fee of $10,000 per month commencing on November 1, 2017 and issues options to acquire 90,000 shares of common stock at an exercise price of $1.00 per share for a term of three years at the end of every quarter. Further, the Company shall issue a 5% equity interest, or mutually agreed upon equivalent, in any partnership or joint venture in which the consulting services provider helps to facilitate, including Fox Rehabilitation. At March 31, 2018 and December 31, 2017, the accrued consulting service fees related to the service agreement was $35,000 and $25,000, respectively, which was included in accrued liabilities and other payables on the accompanying condensed consolidated balance sheets. Real Property Management Agreement On June 6, 2017, the Company entered into a two-year real property management agreement with a related party which agreed to provide real property management service to the Company. In accordance with this agreement, the Company pays a flat fee of $5,417 per month commencing on May 5, 2017 (See Note 14 - Real Property Management Agreement Underwritten and Financial Advisory Service Agreement In October 2017, the Company entered into a service agreement with an investment bank with respect to a planned underwritten public offering and NASDAQ listing advisory service. In accordance with this agreement, the Company pays: a) Success Fees: · Debt Financing: · Equity Financing: b) Expenses: The Company agrees to reimburse for all reasonable out-of-pocket invoiced expenses. c) Advisory Fees: (i) an initial advisory fee of $30,000 upon the execution of this agreement; plus (ii) an additional advisory fee of $30,000 upon the issuance of a conditional approval letter to list on NASDAQ. Mergers and Acquisitions Consulting Service Contract In January 2018, the Company entered into a consulting service agreement with an individual who has agreed to provide consulting services focus on mergers and acquisitions to the Company. The term of this agreement is one year. In accordance to this service agreement, the Company pays a service fee of $50,000 per year. At March 31, 2018, the accrued service fees related to the service agreement was $4,168, which was included in accrued liabilities and other payables on the accompanying condensed consolidated balance sheets. Education Program Agreement On February 12, 2018, the Company entered into an education program agreement with a third party. The term of this agreement is one year. In accordance to this agreement, the Company pays an annual fee of $200,000. At March 31, 2018, the accrued fee related to the agreement was $25,000, which was included in accrued liabilities and other payables on the accompanying condensed consolidated balance sheets. Operating Leases 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 $7,000). 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 $7,000) and the renewed lease expires on March 14, 2019. During the three months ended March 31, 2018, rent expense related to the operating lease amounted to $1,612. Future minimum rental payment required under this operating lease is as follows: Twelve-month Period Ending March 31: Amount 2019 $ 6,249 NOTE 20 – COMMITMENTS AND CONTINCENGIES (continued) Operating Leases (continued) 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 months ended March 31, 2018, rent expense related to the operating lease amounted to $900. Future minimum rental payment required under this operating lease is as follows: Twelve-month Period Ending March 31: Amount 2019 $ 2,700 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 $8,000) with a required security deposit of RMB 164,764 (approximately $26,000). In addition, Avalon Shanghai needs to pay monthly maintenance fees of RMB 4,336 (approximately $700). 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 March 31, 2018 and 2017, rent expense and maintenance fees related to the Beijing Office Lease amounted to approximately $26,000 and $24,000, respectively. Future minimum rental payment required under the Beijing Office Lease is as follows: Twelve-month Period Ending March 31: Amount 2019 $ 88,041 Laboratory Equity Purchase Commitment The Company has entered into contract to purchase laboratory equipment amounting to approximately $145,000. As of March 31, 2018, the Company has an outstanding commitment amounting to approximately $97,000. | NOTE 20 – COMMITMENTS AND CONTINCENGIES Severance Payments 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 and $302,000 as of December 31, 2017 and 2016, respectively, which have not been reflected in its consolidated financial statements since the Company concluded that the likelihood is remote at this moment. Legal Service Contract On November 22, 2016, the Company entered into a legal service agreement with a law firm who has agreed to provide legal and corporate advisory services to the Company. The term of this agreement is on a month to month basis. In accordance to this service agreement, the Company pays a flat fee of $15,000 per month. At December 31, 2017 and 2016, the accrued legal service fees related to the service agreement was $30,000 and $10,000, respectively, which was included in accrued liabilities and other payables on the accompanying consolidated balance sheets. Financial Consulting Service Contract On October 17, 2016, the Company entered into a one-year consulting service agreement with a consultant who has agreed to provide financial consulting service to the Company. In accordance with this agreement, the Company paid a flat fee of $4,800 per month commenced on October 20, 2016. On April 19, 2017, the Company renewed the consulting agreement. In accordance with the renewed agreement, the Company pays a flat fee of $10,000 per month commencing on April 19, 2017. At December 31, 2017 and 2016, the accrued service fees related to the service agreement was $10,000 and $1,600, respectively, which was included in accrued liabilities and other payables on the accompanying consolidated balance sheets. Investor Relations Service Contract In October 2017, the Company entered into an investor relations service agreement with a company who has agreed to provide investor relations services to the Company. The Company may terminate the agreement at any time after December 31, 2017 by providing 30 days written notice. In accordance to this service agreement, the Company pays a service fee of $5,000 per month in cash and issues $15,000 of restricted shares at the close of each quarter based on the closing price of the Company’s stock on the last day of the quarter. At December 31, 2017, the accrued investor relations service fees related to the service agreement was $10,000, which was included in accrued liabilities and other payables on the accompanying consolidated balance sheets. Consulting Service Agreement In November 2017, the Company entered into a consulting service agreement with a company who has agreed to provide consulting services to the Company. The term of this agreement is 6 months. In accordance to this service agreement, the Company paid cash $30,000 and will issue a stock grant equal to the sum of $15,000 at a time mutually agreed for work has been completed through October 31, 2017. In addition, the Company pays a flat fee of $10,000 per month commencing on November 1, 2017 and issues options to acquire 90,000 shares of common stock at an exercise price of $1.00 per share for a term of three years at the end of every quarter. Further, the Company shall issue a 5% equity interest, or mutually agreed upon equivalent, in any partnership or joint venture in which the consulting services provider helps to facilitate, including Fox Rehabilitation. At December 31, 2017, the accrued consulting service fees related to the service agreement was $25,000, which was included in accrued liabilities and other payables on the accompanying consolidated balance sheets. Real Property Management Agreement On June 6, 2017, the Company entered into a two-year real property management agreement with a related party which agreed to provide real property management service to the Company. In accordance with this agreement, the Company pays a flat fee of $5,417 per month commencing on May 5, 2017 (See Note 14 for real property management agreement). Underwritten and Financial Advisory Service Agreement In October 2017, the Company entered into a service agreement with a company with respect to a planned underwritten public offering and NASDAQ listing advisory service. In accordance to this agreement, the company pays: a) Success Fees: ● Debt Financing: ● Equity Financing: b) Expenses: The Company agrees to reimburse for all reasonable out-of-pocket invoiced expenses. c) Advisory Fees: (i) an initial advisory fee of $30,000 upon the execution of this agreement; plus (ii) an additional advisory fee of $30,000 upon the issuance of a conditional approval letter to list on NASDAQ. Operating Leases 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 expires on March 14, 2018. During the period from the acquisition date, October 25, 2017 through December 31, 2017, rent expense related to the operating lease amounted to $1,011. Future minimum rental payment required under this operating lease is as follows Year Ending December 31: Amount 2018 $ 1,264 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 singed 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. Future minimum rental payment required under this operating lease is as follows: Year Ending December 31: Amount 2018 $ 3,600 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 $8,000) with a required security deposit of RMB 164,764 (approximately $25,000). In addition, Avalon Shanghai needs to pay monthly maintenance fees of RMB 4,336 (approximately $700). 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 year ended December 31, 2017, rent expense and maintenance fees related to the Beijing Office Lease amounted to approximately $87,000. Future minimum rental payment required under the Beijing Office Lease is as follows: Operating Leases (continued) Avalon Shanghai Office Lease (continued) Year Ending December 31: Amount 2018 $ 97,547 2019 8,771 Total $ 106,318 Laboratory Equity Purchase Commitment The Company has entered into contract to purchase laboratory equipment amounting to approximately $140,000. As of December 31, 2017, the Company has an outstanding commitment amounting to approximately $94,000. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
RESTRICTED NET ASSETS | NOTE 21 – RESTRICTED NET ASSETS A portion of the Company’s operations are conducted through its PRC subsidiaries, which can only pay dividends out of their retained earnings determined in accordance with the accounting standards and regulations in the PRC and after they have met the PRC requirements for appropriation to statutory reserve. In addition, a portion of the Company’s businesses and assets are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. These currency exchange control procedures imposed by the PRC government authorities may restrict the ability of the Company’s PRC subsidiaries to transfer their net assets to the Parent Company through loans, advances or cash dividends. Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of its consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company in the form of loans, advances or cash dividends without the consent of a third party. The Company’s PRC subsidiaries’ net assets as of March 31, 2018 and December 31, 2017 did not exceed 25% of the Company’s consolidated net assets. Accordingly, Parent Company’s condensed financial statements have not been required in accordance with Rule 5-04 and Rule 12-04 of SEC Regulation S-X. | NOTE 22 – RESTRICTED NET ASSETS A portion of the Company’s operations are conducted through its PRC subsidiaries, which can only pay dividends out of their retained earnings determined in accordance with the accounting standards and regulations in the PRC and after they have met the PRC requirements for appropriation to statutory reserve. In addition, a portion of the Company’s businesses and assets are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. These currency exchange control procedures imposed by the PRC government authorities may restrict the ability of the Company’s PRC subsidiaries to transfer their net assets to the Parent Company through loans, advances or cash dividends. Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of its consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company in the form of loans, advances or cash dividends without the consent of a third party. The Company’s PRC subsidiaries’ net assets as of December 31, 2017 and 2016 did not exceed 25% of the Company’s consolidated net assets. Accordingly, Parent Company’s condensed financial statements have not been required in accordance with Rule 5-04 and Rule 12-04 of SEC Regulation S-X |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 22 – SUBSEQUENT EVENTS April 2018 Private Placement In April 2018, the Company initially entered into a Subscription Agreement with three accredited investors (the "April 2018 Accredited Investors") pursuant to which the April 2018 Accredited Investors agreed to purchase 2,940,000 shares of the Company’s common stock for a purchase price of $5,145,000. One of the three April 2018 Accredited Investors subsequently reduced their investment amount resulting in the issuance of 2,660,000 shares of common stock for a purchase price of $4,655,000. The closing occurred with respect to $3,500,000 on April 20, 2018, with respect to $157,500 on April 26, 2018 and with respect to $997,500 on May 5, 2018. In connection with this private offering, the Company is required to pay Boustead Securities, LLC (“Boustead”), a registered broker-dealer, a cash fee of equal to 7% of the gross proceeds received by the Company from such closing and issue Boustead warrants in the Company exercisable for a period of five years equal to 7% of the gross proceeds received by the Company from such closing, divisible by and exercisable at a strike price equal to 100% of the fair market value of the common stock for the Company as of the date of the closing. DOING Biomedical Technology Co., Ltd. Investment On March 3, 2017, the Company entered into and closed a Subscription Agreement with an accredited investor (the “March 2017 Accredited Investor”) pursuant to which the March 2017 Accredited Investor purchased 3,000,000 shares of the Company’s common stock (“March 2017 Shares”) for a purchase price of $3,000,000 (the “DOING Investment”). The Company, Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”), Beijing DOING Biomedical Technology Co., Ltd. (“DOING”), and the March 2017 Accredited Investor entered into a Share Subscription Agreement whereby the parties acknowledged, among other things, that DOING agreed to transfer the purchase price to Avalon Shanghai on behalf of the March 2017 Accredited Investor and the March 2017 Accredited Investor agreed to transfer the March 2017 Shares to DOING upon DOING completing the registration of the acquisition of the March 2017 Shares with the Beijing Commerce Commission (“BCC”), and obtaining an Enterprise Overseas Investment Certificate (the “Investment Certificate”) from BCC. If DOING fails to complete the registration and acquire the Investment Certificate within one year of the closing then Avalon Shanghai was required to transfer $3,000,000 with interest of 20% to DOING upon the request of DOING (the “BCC Repayment Obligation”). Further, Wenzhao Lu, the Company’s director and major shareholder, and DOING entered into a Warranty Agreement. Pursuant to the Warranty Agreement, Mr. Wenzhao agreed to (i) cause us to be liable to DOING in the event the March 2017 Accredited Investor defaults in its obligations to DOING, (ii) cause the March 2017 Accredited Investor to transfer the March 2017 Shares to DOING upon DOING’s receipt of the Investment Certificate from BCC, (iii) within three years from the date of the Warranty Agreement, DOING may require Mr. Wenzhao to acquire the March 2017 Shares at $1.20 per share upon three-month notice, and (iv) in the event Mr. Wenzhao does not acquire the March 2017 Shares within the three month period, interest of 15% per annum will be added to the purchase price (See Note 15 - Common Shares Issued for Share Subscription Agreement On April 23, 2018, the Company, Avalon Shanghai, DOING and March 2017 Accredited Investor entered into a Supplementary Agreement Related to Share Subscription pursuant to which Avalon Shanghai agreed to pay RMB 8,256,000 (approximately $1.3 million based on the exchange rate on April 23, 2018) to DOING representing one-third of the DOING Investment plus 20% interest for the one-third DOING Investment resulting in a reduction in the March 2017 Shares by one-third to 2,000,000 shares. Further, the parties agreed that the BCC Repayment Obligation shall be extended to July 31, 2018 at which time DOING may require that the Company pay $2,000,000 plus 20% interest to DOING resulting in the cancellation of the remaining March 2017 Shares. However, DOING may, in its discretion, require that the remaining March 2017 Shares be transferred to a new nominal holder who shall pay the required subscription price, which funds will, in turn, be used to satisfy the BCC Repayment Obligation. Loan Payable In April 2018, the Company repaid principal of $500,000 and paid interest of $175,096 for its outstanding loan which reduced the outstanding loan principal amount to $1,000,000. On May 3, 2018, the Company signed an extension agreement with the maturity date of March 31, 2019 (See Note 12). | NOTE 23 – SUBSEQUENT EVENTS If DOING fails to complete the registration and acquire the Investment Certificate within one year of the closing then Avalon Shanghai shall transfer $3,000,000 with interest of 20% to DOING upon the request of DOING (the “BCC Repayment Obligation”). As of the date hereof, the Company is obligated to DOING in the principal amount of $3,000,000. The Company and DOING are presently negotiating an extension of the BCC Repayment Obligation through July 2018. There is no guarantee that such extension will be signed. (See Note 16 – Common Shares Issued for Share Subscription Agreement). |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the three months ended March 31, 2018 and 2017 include the allowance for doubtful accounts, reserve for obsolete inventory, the useful life of property and equipment and investment in real estate and intangible assets, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets and the associated valuation allowances, and valuation of options. | Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2017 and 2016 include the allowance for doubtful accounts, reserve for obsolete inventory, the useful life of property, plant, equipment and investment in real estate and intangible assets, assumptions used in assessing impairment of long-term assets, the fair value of assets acquired and liabilities assumed in acquisition, valuation of deferred tax assets, accruals for taxes due, the value of stock-based compensation, and valuation of options. |
Fair value of financial instruments and fair value measurements | 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, 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 March 31, 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 Balance at Impairment Loss Patents and other technologies $ — $ — $ 1,501,367 $ 1,501,367 $ — Quoted Price in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 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 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments and Fair Value Measurements (continued) 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 months ended March 31, 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. | 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 consolidated balance sheets for cash, accounts receivable, accounts receivable – related parties, 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, income taxes payable, Value Added Tax (“VAT”) and other taxes payable, tenants’ security deposit, due to related parties, and refundable deposit, approximate their fair market value based on the short-term maturity of these instruments. At December 31, 2017 and 2016, 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 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 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, 2016 Impairment Loss Intangible assets $ — $ — $ — $ — $ — Fair Value of Financial Instruments and Fair Value Measurements (continued) A rollforward of the level 3 valuation of the financial instrument is as follows: Patents and other technologies Goodwill Total Balance at December 31, 2016 $ — $ — $ — Intangible assets acquired 2,593,478 397,569 2,991,047 Amortization of intangible assets (86,449 ) — (86,449 ) Impairment loss (923,769 ) (397,569 ) (1,321,338 ) Balance at December 31, 2017 $ 1,583,260 $ — $ 1,583,260 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. There were no intangible assets at December 31, 2016 and the Company did not record any impairment charge for the year ended December 31, 2016 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. |
Cash | Cash Cash consists of cash on hand and cash in banks. The Company maintains cash with various financial institutions in the PRC and United States. At March 31, 2018 and December 31, 2017, cash balances in PRC are $1,251,993 and $1,327,009, respectively, are uninsured. At March 31, 2018 and December 31, 2017, cash balances in United States are $873,663 and $1,700,024, respectively. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts. | Cash Cash consists of cash on hand and cash in banks. The Company maintains cash with various financial institutions in the PRC and United States. At December 31, 2017 and 2016, cash balances in PRC are $1,327,009 and $2,525,630, respectively, are uninsured. At December 31, 2017 and 2016, cash balances in United States are $1,700,024 and $360,559, respectively. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts. |
Concentrations of credit risk | Concentrations of Credit Risk Currently, a portion of the Company’s operations are carried out in PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, trade accounts receivable and tenants receivable. A portion of the Company’s cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. A portion of the Company’s sales are credit sales which is to the customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivable and tenants receivable is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. At March 31, 2018 and December 31, 2017, the Company’s cash balances by geographic area were as follows: Country: March 31, 2018 December 31, 2017 United States $ 873,663 41.1 % $ 1,700,024 56.2 % China 1,251,993 58.9 % 1,327,009 43.8 % Total cash $ 2,125,656 100.0 % $ 3,027,033 100.0 % | Concentrations of Credit Risk Currently, a portion of the Company’s operations are carried out in PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, trade accounts receivable and tenants receivable. A portion of the Company’s cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. A portion of the Company’s sales are credit sales which is to the customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivable and tenants receivable is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. At December 31, 2017 and 2016, the Company’s cash balances by geographic area were as follows: Country: December 31, 2017 December 31, 2016 United States $ 1,700,024 56.2 % $ 360,559 12.5 % China 1,327,009 43.8 % 2,525,630 87.5 % Total cash $ 3,027,033 100.0 % $ 2,886,189 100.0 % |
Accounts receivable and allowance for doubtful accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Accounts Receivable and Allowance for Doubtful Accounts (continued) Management believes that the accounts receivable are fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its accounts receivable at March 31, 2018 and December 31, 2017. The Company historically has not experienced uncollectible accounts from customers granted with credit sales. | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Management believes that the accounts receivable are fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its accounts receivable at December 31, 2017. The Company historically has not experienced uncollectible accounts from customers granted with credit sales. |
Tenants receivable and allowance for doubtful accounts | Tenants Receivable and Allowance for Doubtful Accounts Tenants receivable are presented net of an allowance for doubtful accounts. Tenants receivable balance consist of base rents, tenant reimbursements and receivables arising from straight-lining of rents primarily represent amounts accrued and unpaid from tenants in accordance with the terms of the respective leases, subject to the Company’s revenue recognition policy. An allowance for the uncollectible portion of tenant receivable is determined based upon an analysis of the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in Freehold, New Jersey in which the property is located. Management believes that the tenants receivable are fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its tenants receivable at March 31, 2018 and December 31, 2017. | Tenants Receivable and Allowance for Doubtful Accounts Tenants receivable are presented net of an allowance for doubtful accounts. Tenants receivable balance consists of base rents, tenant reimbursements and receivables arising from straight-lining of rents primarily represent amounts accrued and unpaid from tenants in accordance with the terms of the respective leases, subject to the Company’s revenue recognition policy. An allowance for the uncollectible portion of tenant receivable is determined based upon an analysis of the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in Freehold, New Jersey in which the property is located. Management believes that the tenants receivable is fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its tenants receivable at December 31, 2017. |
Inventory | Inventory Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventory may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserve for the difference between the cost and the market value. These reserve is recorded based on estimates. The Company did not record any inventory reserve at March 31, 2018 and December 31, 2017. | Inventory Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventory may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserve for the difference between the cost and the market value. These reserve is recorded based on estimates. The Company did not record any inventory reserve at December 31, 2017. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. | Property, Plant and Equipment Property, plant and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
Investment in real estate and depreciation | Investment in Real Estate and Depreciation Investment in real estate is carried at cost less accumulated depreciation. The Company depreciates real estate building on a straight-line basis over estimated useful life. The Company capitalizes all capital improvements associated with replacements, improvements or major repairs to real property that extend its useful life and depreciate them using the straight-line method over its estimated useful life. Real estate depreciation expense was $31,805 and $0 for the three months ended March 31, 2018 and 2017, respectively. The Company charges maintenance and repair costs that do not extend an asset’s useful life to expense as incurred. | Investment In Real Estate and Depreciation Investment in real estate is carried at cost less accumulated depreciation. The Company depreciates real estate building on a straight-line basis over estimated useful life. The Company capitalizes all capital improvements associated with replacements, improvements or major repairs to real property that extend its useful life and depreciate them using the straight-line method over its estimated useful life. Real estate depreciation expense was $84,814 for the year ended December 31, 2017. The Company charges maintenance and repair costs that do not extend an asset’s useful life to expense as incurred. |
Intangible Assets | Intangible Assets Intangible assets consist of patents and other technologies. Patents and other technologies are being amortized on a straight-line method over the estimated useful life of 5 years. | Intangible Assets Intangible assets consist of goodwill and patents and other technologies. Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in the business acquisition incurred on October 25, 2017. Goodwill is not amortized, but is tested for impairment at December 31, 2017. Patents and other technologies are being amortized on a straight-line method over the estimated useful life of 5 years. |
Impairment of Long-Lived Assets | Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charge for the three months ended March 31, 2018 and 2017. | Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. 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. There were no intangible assets at December 31, 2016 and the Company did not record any impairment charge for the year ended December 31, 2016 |
Acquisition Consideration | Acquisition Consideration On October 25, 2017, GenExosome entered into and closed a Stock Purchase Agreement with Beijing Jieteng (GenExosome) Biotech Co. Ltd., a corporation incorporated in the People’s Republic of China (“Beijing GenExosome”) and Dr. Zhou, the sole shareholder of Beijing GenExosome, pursuant to which GenExosome acquired all of the issued and outstanding securities of Beijing GenExosome in consideration of a cash payment in the amount of $450,000, which shall be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). On October 25, 2017, Dr. Zhou was appointed to the board of directors of GenExosome and served as Co-chief executive officer of GenExosome. As of March 31, 2018 and December 31, 2017, the unpaid acquisition consideration of $450,000 was recorded as due to related party on the accompanying condensed consolidated balance sheets. | Acquisition Consideration On October 25, 2017, GenExosome entered into and closed a Stock Purchase Agreement with Beijing Jieteng (GenExosome) Biotech Co. Ltd., a corporation incorporated in the People’s Republic of China (“Beijing GenExosome”) and Dr. Zhou, the sole shareholder of Beijing GenExosome, pursuant to which GenExosome acquired all of the issued and outstanding securities of Beijing GenExosome in consideration of a cash payment in the amount of $450,000, which shall be paid upon Beijing GenExosome recording the change in ownership with the Ministry of Commerce of the People’s Republic of China in accordance with the Interim Measures for Record Management regarding the Establishment and Change of Foreign-invested Enterprises (revised). On October 25, 2017, Dr. Zhou was appointed to the board of directors of GenExosome and served as Co-chief executive officer of GenExosome. As of December 31, 2017, the unpaid acquisition consideration of $450,000 was included in due to related parties on the accompanying consolidated balance sheets. |
Deferred rental income | Deferred Rental Income Deferred rental income represents rental income collected but not earned as of the reporting date. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of March 31, 2018 and December 31, 2017, deferred rental income totaled $7,254 and $12,769, respectively. | Deferred Rental Income Deferred rental income represents rental income collected but not earned as of the reporting date. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of December 31, 2017 and 2016, deferred rental income totaled $12,769 and $0, respectively. |
Value added tax | Value Added Tax Avalon Shanghai is subject to a value added tax (“VAT”) of 6% for providing medical related consulting services and Beijing GenExosome is subject to a VAT of 3% for performing development services and sales of related products developed. The amount of VAT liability is determined by applying the applicable tax rates to the invoiced amount of medical related consulting services provided and the invoiced amount of development services provided and sales of related products developed (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company reports revenue net of PRC’s value added tax for all the periods presented in the unaudited condensed consolidated statements of operations and comprehensive loss. | Value Added Tax Avalon Shanghai is subject to a value added tax (“VAT”) of 6% for providing medical related consulting services and Beijing GenExosome is subject to a VAT of 3% for performing development services and sales of related products developed. The amount of VAT liability is determined by applying the applicable tax rates to the invoiced amount of medical related consulting services provided and the invoiced amount of development services provided and sales of related products developed (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company reports revenue net of PRC’s value added tax for all the periods presented in the consolidated statements of operations and comprehensive loss. |
Office Lease | Office Lease When a lease contains “rent holidays”, the Company records rental expense on a straight-line basis over the term of the lease and the difference between the average rental amount charged to expense and the amount payable under the lease is recorded as prepaid expenses in the consolidated balance sheets. The Company begins recording rent expense on the lease possession date. | |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in cost of sales. For the three months ended March 31, 2018 and 2017, shipping and handling costs amounted to $25 and $0, respectively. | Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in selling expenses. The Company did not incur any shipping and handling costs in the years ended December 31, 2017 and 2016. |
Research and development | Research and Development Expenditures for research and product development costs are expensed as incurred. The Company did not incur any research and development costs during the three months ended March 31, 2018 and 2017. | Research and Development Expenditures for research and product development costs are expensed as incurred. The Company did not incur any research and development costs during the years ended December 31, 2017 and 2016. |
Advertising and Marketing Costs | Advertising and Marketing Costs All costs related to advertising and marketing are expensed as incurred. The Company did not incur any advertising and marketing expenses during the three months ended March 31, 2018 and 2017. | Advertising and Marketing Costs All costs related to advertising and marketing are expensed as incurred. The Company did not incur any advertising and marketing expenses during the years ended December 31, 2017 and 2016. |
Revenue Recognition | Revenue Recognition Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the purchase price is fixed or determinable and collectability is reasonably assured. Types of revenue: ● Rental revenue from leasing commercial property under operating leases with terms of generally two years or more. ● Service fees under consulting agreements with related parties to provide medical related consulting services to its clients. The Company is paid for its services by its clients pursuant to the terms of the written consulting agreements. Each contract calls for a fixed payment in a fixed period of time. ● Service fees under agreements to perform development services for hospitals. The Company does not perform contracts that are contingent upon successful results. ● Sales of developed products to hospitals in connection with performing development services. Revenue recognition criteria: ● The Company recognizes rental revenue from its commercial leases on a straight-line basis over the life of the lease including rent holidays, if any. Straight-line rent receivable consists of the difference between the tenants’ rents calculated on a straight-line basis from the date of lease commencement over the remaining terms of the related leases and the tenants’ actual rents due under the lease agreements and is included in tenants receivable in the accompanying consolidated balance sheets. Revenues associated with operating expense recoveries are recognized in the period in which the expenses are incurred. ● The Company recognizes revenue by providing medical related consulting services under written service contracts with its customers. Revenue related to its service offerings is recognized as the services are performed and amounts are earned, using the straight-line method over the term of the related services agreement. Prepayments, if any, received from customers prior to the services being performed are recorded as advance from customers. In these cases, when the services are performed, the amount recorded as advance from customers is recognized as revenue. ● Revenue from development services performed under hospital contracts is recognized when it is earned pursuant to the terms of the contract. Each contract calls for a fixed dollar amount with a specified time period. These contracts generally involve up-front payment. Revenue is recognized for these projects as services are provided. ● Revenue from sales of developed items to hospitals resulting from its development services, which call for the transfer of other items developed during the projects to the customers, is recognized when the item is shipped to the customer and title is transferred. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. Sales tax collected is not recognized as revenue and amounts outstanding are included in accrued liabilities and other payables in the consolidated balance sheets. | Revenue Recognition Pursuant to the guidance of ASC Topic 605, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the purchase price is fixed or determinable and collectability is reasonably assured. Revenue Recognition (continued) Types of revenue: ● Rental revenue from leasing commercial property under operating leases with terms of generally two years or more. ● Service fees under consulting agreements with related parties to provide medical related consulting services to its clients. The Company is paid for its services by its clients pursuant to the terms of the written consulting agreements. Each contract calls for a fixed payment in a fixed period of time. ● Service fees under agreements to perform development services for hospitals. The Company does not perform contracts that are contingent upon successful results. ● Sales of developed products to hospitals in connection with performing development services. Revenue recognition criteria: ● The Company recognizes rental revenue from its commercial leases on a straight-line basis over the life of the lease including rent holidays, if any. Straight-line rent receivable consists of the difference between the tenants’ rents calculated on a straight-line basis from the date of lease commencement over the remaining terms of the related leases and the tenants’ actual rents due under the lease agreements and is included in tenants receivable in the accompanying consolidated balance sheets. Revenues associated with operating expense recoveries are recognized in the period in which the expenses are incurred. ● The Company recognizes revenue by providing medical related consulting services under written service contracts with its customers. Revenue related to its service offerings is recognized as the services are performed and amounts are earned, using the straight-line method over the term of the related services agreement. Prepayments, if any, received from customers prior to the services being performed are recorded as advance from customers. In these cases, when the services are performed, the amount recorded as advance from customers is recognized as revenue. ● Revenue from development services performed under hospital contracts is recognized when it is earned pursuant to the terms of the contract. Each contract calls for a fixed dollar amount with a specified time period. These contracts generally involve up-front payment. Revenue is recognized for these projects as services are provided. ● Revenue from sales of developed items to hospitals resulting from its development services, which call for the transfer of other items developed during the projects to the customers, is recognized when the item is shipped to the customer and title is transferred. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. |
Government Grant | Government Grant Government grants are recognized at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions are complied with. | |
Real Property Operating Expenses | Real Property Operating Expenses Real property operating expenses consist of property management fees, property insurance, real estate taxes, depreciation, repairs and maintenance fees, utilities and other expenses related to the Company’s rental properties. | Real Property Operating Expenses Real property operating expenses consist of property management fees, property insurance, real estate taxes, depreciation, repairs and maintenance fees, utilities and other expenses related to the Company’s rental properties. |
Development Services and Sales of Developed Products Costs | Development Services and Sales of Developed Products Costs Costs of development services and sales of developed items to hospitals includes inventory costs, materials and supplies costs, depreciation, internal labor and related benefits, other overhead costs and shipping and handling costs incurred. | Development Services and Sales of Developed Products Costs Costs of development services and sales of developed items to hospitals includes inventory costs, materials and supplies costs, depreciation, internal labor and related benefits, and other overhead costs incurred. |
Medical Related Consulting Services Costs | Medical Related Consulting Services Costs Costs of medical related consulting services includes the cost of internal labor and related benefits, travel expenses related to consulting services, subcontractor costs, other related consulting costs, and other overhead costs. Subcontractor costs were costs related to medical related consulting services incurred by our subcontractor, such as medical professional’s compensation and travel costs. | Medical Related Consulting Services Costs Costs of medical related consulting services includes the cost of internal labor and related benefits, travel expenses related to consulting services, subcontractor costs, other related consulting costs, and other overhead costs. Subcontractor costs were costs related to medical related consulting services incurred by our subcontractor, such as medical professional’s compensation and travel costs. |
Stock-based compensation | Stock-based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of Accounting Standards Codification (“ASC”) 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is recognized over the period of services or the vesting period, whichever is applicable. Until the measurement date is reached, the total amount of compensation expense remains uncertain. | Stock-based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of Accounting Standards Codification (“ASC”) 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is recognized over the period of services or the vesting period, whichever is applicable. Compensation expense for unvested options to non-employees is re-measured at each balance sheet date and is being amortized over the vesting period of the options. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of March 31, 2018 and December 31, 2017, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. Tax year that remains subject to examination is the years ended December 31, 2017, 2016 and 2015. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of March 31, 2018 and December 31, 2017. | Income Taxes The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2017 and 2016, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. Tax year that remains subject to examination is the years ended December 31, 2017, 2016 and 2015. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of December 31, 2017 and 2016. |
Foreign currency translation | Foreign Currency Translation The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company, AHS, Avalon RT 9, and GenExosome, is the U.S. dollar and the functional currency of Avalon Shanghai and Beijing GenExosome, is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign Currency Translation (continued) All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. Asset and liability accounts at March 31, 2018 and December 31, 2017 were translated at 6.2874 RMB to $1.00 and at 6.5067 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rates. The average translation rates applied to the statements of operations for the three months ended March 31, 2018 and 2017 were 6.3577 RMB and 6.8877 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. | Foreign Currency Translation The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company, AHS, Avalon RT 9, and GenExosome, is the U.S. dollar and the functional currency of Avalon Shanghai and Beijing GenExosome, is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. Asset and liability accounts at December 31, 2017 and 2016 were translated at 6.5067 RMB to $1.00 and at 6.9448 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rates. The average translation rates applied to the statements of operations for the years ended December 31, 2017 and 2016 were 6.7563 RMB and 6.6435 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of net loss and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the three months ended March 31, 2018 and 2017 consisted of net loss and unrealized gain (loss) from foreign currency translation adjustment. | Comprehensive Loss Comprehensive loss is comprised of net (loss) income and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the years ended December 31, 2017 and 2016 consisted of net (loss) income and unrealized gain (loss) from foreign currency translation adjustment. |
Per share data | Per Share Data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per share are computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of common stock options (using the treasury stock method). Common stock equivalents are not included in the calculation of diluted net loss per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table presents a reconciliation of basic and diluted net loss per share: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Net loss available to Avalon GloboCare Corp. for basic and diluted net loss per share of common stock $ (1,481,579 ) $ (549,333 ) Weighted average common stock outstanding - basic and diluted 69,781,733 62,595,289 Net loss per common share attributable to Avalon GloboCare Corp. - basic and diluted $ (0.02 ) $ (0.01 ) For the three months ended March 31, 2018 and 2017, stock options to purchase 2,410,000 and 111,111 shares of common stock, respectively, have been excluded from the computation of diluted loss per share as their effect would be anti-dilutive. | Per Share Data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net (loss) income per share are computed by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of common stock options (using the treasury stock method). Common stock equivalents are not included in the calculation of diluted net (loss) income per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table presents a reconciliation of basic and diluted net (loss) income per share: Per Share Data (continued) Year Ended December 31, 2017 Year Ended December 31, 2016 Net (loss) income available to Avalon GloboCare Corp. for basic and diluted net (loss) income per share of common stock $ (3,464,285 ) $ 55,581 Weighted average common stock outstanding - basic and diluted 65,033,472 51,139,475 Net (loss) income per common share attributable to Avalon GloboCare Corp. - basic and diluted $ (0.05 ) $ 0.00 For the year ended December 31, 2017, stock options to purchase 2,290,000 shares of common stock have been excluded from the computation of diluted loss per share as their effect would be anti-dilutive. The Company did not have any common stock equivalents and potentially dilutive common stock outstanding during the year ended December 31, 2016. |
Business Acquisition | Business Acquisition The Company accounts for business acquisition in accordance with ASC No. 805, Business Combinations. The assets acquired and liabilities assumed from the acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill. The result of operations of the acquired business is included in the Company’s operating result from the date of acquisition. | Business Acquisition The Company accounts for business acquisition in accordance with ASC No. 805, Business Combinations. The assets acquired and liabilities assumed from the acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill. The result of operations of the acquired business is included in the Company’s operating result from the date of acquisition. |
Non-controlling Interest | Non-controlling Interest As of March 31, 2018, Dr. Yu Zhou, director and Co-Chief Executive Officer of GenExosome, who owned 40% of the equity interests of GenExosome, which is not under the Company’s control. | Non-controlling Interest As of December 31, 2017, Dr. Yu Zhou, director and Co-Chief Executive Officer of GenExosome who owned 40% of the equity interests of GenExosome, which is not under the Company’s control. |
Segment reporting | Segment Reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the chief executive officer (“CEO”) and president of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company has determined that it has three reportable business segments: real property operating segment, development services and sales of developed products segment, and medical related consulting services segment. These reportable segments offer different types of services and products, have different types of revenue, and are managed separately as each requires different operating strategies and management expertise. | Segment Reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the chief executive officer (“CEO”) and president of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company has determined that it has three reportable business segments: real property operating segment, medical related consulting services segment, and development services and sales of developed products segment. These reportable segments offer different types of services and products, have different types of revenue, and are managed separately as each requires different operating strategies and management expertise. |
Related parties | Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions. | Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows. | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows. |
Reverse Stock Split | Reverse Stock Split The Company effected a one-for-four reverse stock split of its common stock on October 18, 2016. All share and per share information has been retroactively adjusted to reflect this reverse stock split. | Reverse Stock Split The Company effected a one-for-four reverse stock split of its common stock on October 18, 2016. All share and per share information has been retroactively adjusted to reflect this reverse stock split. |
Fiscal Year End | Fiscal Year End The Company has adopted a fiscal year end of December 31st. | Fiscal Year End The Company has adopted a fiscal year end of December 31st. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This pronouncement is effective for reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This pronouncement is effective for reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for the Company in the first fiscal quarter of 2018 on a prospective basis, and early adoption is permitted. The Company does not expect the standard to have a material impact on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting. The guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Entities will apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. This guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Fair Value, Assets Measured on Nonrecurring Basis | Details of the Company’s subsidiaries which are included in these consolidated financial statements as of March 31, 2018 are as follows: Name of Subsidiaries Place and date of Incorporation Percentage of Ownership Principal Activities Avalon Healthcare System, Inc. (“AHS”) Delaware May 18, 2015 100% held by AVCO Provides medical related consulting services and developing Avalon Cell and Avalon Rehab in United States of America (“USA”) Avalon (BVI) Ltd. (“Avalon BVI”) British Virgin Island January 23, 2017 100% held by AVCO Dormant, will be dissolved in 2018 Avalon RT 9 Properties LLC (“Avalon RT 9”) New Jersey February 7, 2017 100% held by AVCO Owns and operates an income-producing real property and holds and manages the corporate headquarters Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”) PRC April 29, 2016 100% held by AHS Provides medical related consulting services and developing Avalon Cell and Avalon Rehab in China GenExosome Technologies Inc. (“GenExosome”) Nevada July 31, 2017 60% held by AVCO Develops proprietary diagnostic and therapeutic products leveraging exosome technology and markets and distributes proprietary Exosome Isolation Systems in USA Beijing Jieteng (GenExosome) Biotech Co., Ltd. (“Beijing GenExosome”) PRC August 7, 2015 100% held by GenExosome Provides development services for hospitals and sales of related products developed to hospitals in China | At December 31, 2017 and 2016, 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 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 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, 2016 Impairment Loss Intangible assets $ — $ — $ — $ — $ — |
Valuation of financial instrument | At March 31, 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 Balance at Impairment Loss Patents and other technologies $ — $ — $ 1,501,367 $ 1,501,367 $ — Quoted Price in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 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 | A rollforward of the level 3 valuation of the financial instrument is as follows: Patents and other technologies Goodwill Total Balance at December 31, 2016 $ — $ — $ — Intangible assets acquired 2,593,478 397,569 2,991,047 Amortization of intangible assets (86,449 ) — (86,449 ) Impairment loss (923,769 ) (397,569 ) (1,321,338 ) Balance at December 31, 2017 $ 1,583,260 $ — $ 1,583,260 |
Schedule of cash balances by geographic area | At March 31, 2018 and December 31, 2017, the Company’s cash balances by geographic area were as follows: Country: March 31, 2018 December 31, 2017 United States $ 873,663 41.1 % $ 1,700,024 56.2 % China 1,251,993 58.9 % 1,327,009 43.8 % Total cash $ 2,125,656 100.0 % $ 3,027,033 100.0 % | At December 31, 2017 and 2016, the Company’s cash balances by geographic area were as follows: Country: December 31, 2017 December 31, 2016 United States $ 1,700,024 56.2 % $ 360,559 12.5 % China 1,327,009 43.8 % 2,525,630 87.5 % Total cash $ 3,027,033 100.0 % $ 2,886,189 100.0 % |
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 Ended March 31, 2018 Three Months Ended March 31, 2017 Net loss available to Avalon GloboCare Corp. for basic and diluted net loss per share of common stock $ (1,481,579 ) $ (549,333 ) Weighted average common stock outstanding - basic and diluted 69,781,733 62,595,289 Net loss per common share attributable to Avalon GloboCare Corp. - basic and diluted $ (0.02 ) $ (0.01 ) | The following table presents a reconciliation of basic and diluted net (loss) income per share: Year Ended December 31, 2017 Year Ended December 31, 2016 Net (loss) income available to Avalon GloboCare Corp. for basic and diluted net (loss) income per share of common stock $ (3,464,285 ) $ 55,581 Weighted average common stock outstanding - basic and diluted 65,033,472 51,139,475 Net (loss) income per common share attributable to Avalon GloboCare Corp. - basic and diluted $ (0.05 ) $ 0.00 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
Schedule of business acquisition, pro forma information | The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Beijing GenExosome had occurred as of the beginning of the following period: Three Months Ended March 31, 2017 Net revenues $ 66,286 Net loss $ (1,056,378 ) Net loss attributable to Avalon GloboCare Corp. $ (1,053,082 ) Net loss per share $ (0.02 ) | The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Beijing GenExosome had occurred as of the beginning of the following periods: Year Ended December 31, 2017 Year Ended December 31, 2016 Net revenues $ 1,077,550 $ 671,863 Net loss $ (4,171,807 ) $ (405,983 ) Net loss attributable to Avalon GloboCare Corp. $ (3,561,650 ) $ (420,879 ) Net loss per share $ (0.05 ) $ (0.01 ) |
Schedule of business acquisitions, pro forma information | The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Beijing GenExosome had occurred as of the beginning of the following period: Three Months Ended March 31, 2017 Net revenues $ 66,286 Net loss $ (1,056,378 ) Net loss attributable to Avalon GloboCare Corp. $ (1,053,082 ) Net loss per share $ (0.02 ) | The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Beijing GenExosome had occurred as of the beginning of the following periods: Year Ended December 31, 2017 Year Ended December 31, 2016 Net revenues $ 1,077,550 $ 671,863 Net loss $ (4,171,807 ) $ (405,983 ) Net loss attributable to Avalon GloboCare Corp. $ (3,561,650 ) $ (420,879 ) Net loss per share $ (0.05 ) $ (0.01 ) |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
Schedule of inventory | At March 31, 2018 and December 31, 2017, inventory consisted of the following: March 31, 2018 December 31, 2017 Raw material $ 10,111 $ 2,667 10,111 2,667 Less: reserve for obsolete inventory — — $ 10,111 $ 2,667 | At December 31, 2017 and 2016, inventory consisted of the following: December 31, 2017 December 31, 2016 Raw material $ 2,667 $ — 2,667 — Less: reserve for obsolete inventory — — $ 2,667 $ — |
PREPAID EXPENSES AND OTHER CU35
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Schedule of prepaid expenses and other current assets | At March 31, 2018 and December 31, 2017, prepaid expenses and other current assets consisted of the following: March 31, 2018 December 31, 2017 Prepaid professional fees $ 15,000 $ 65,000 Prepaid dues and subscriptions 11,168 49,167 Other 48,238 35,546 $ 74,406 $ 149,713 | At December 31, 2017 and 2016, prepaid expenses and other current assets consisted of the following: December 31, 2017 December 31, 2016 Prepaid professional fees $ 65,000 $ 32,004 Prepaid dues and subscriptions 49,167 — Prepayment for acquisition of real property — 700,000 Other 35,546 17,792 $ 149,713 $ 749,796 |
PREPAYMENT FOR LONG-TERM ASSE36
PREPAYMENT FOR LONG-TERM ASSETS (Table) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
Summary of prepayment of long-term assets | At March 31, 2018 and December 31, 2017, prepayment for long-term assets consisted of the following: March 31, 2018 December 31, 2017 Prepayment for manufacturing equipment purchased $ 47,714 $ 153,688 $ 47,714 $ 153,688 | At December 31, 2017 and 2016, prepayment for long-term assets consisted of the following: December 31, 2017 December 31, 2016 Prepayment for manufacturing equipment purchased $ 153,688 $ — $ 153,688 $ — |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | At March 31, 2018 and December 31, 2017, property and equipment consisted of the following: Useful life March 31, 2018 December 31, 2017 Laboratory equipment 5 Years $ 122,837 $ 3,685 Office equipment and furniture 3 – 10 Years 31,954 31,440 Leasehold improvement 1.75 Years 25,407 24,551 180,198 59,676 Less: accumulated depreciation (21,783 ) (11,647 ) $ 158,415 $ 48,029 | At December 31, 2017 and 2016, property, plant and equipment consisted of the following: Useful life December 31, 2017 December 31, 2016 Laboratory equipment 5 Years $ 3,685 $ — Office equipment and furniture 3 – 10 Years 31,440 320 Leasehold improvement 1.75 Years 24,551 — 59,676 320 Less: accumulated depreciation (11,647 ) (25 ) $ 48,029 $ 295 |
INVESTMENT IN REAL ESTATE (Tabl
INVESTMENT IN REAL ESTATE (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Real Estate [Abstract] | ||
Summary of investment in real estate | At March 31, 2018 and December 31, 2017, investment in real estate consisted of the following: Useful life March 31, 2018 December 31, 2017 Commercial real property 39 Years $ 7,708,571 $ 7,708,571 Less: accumulated depreciation (116,619 ) (84,814 ) $ 7,591,952 $ 7,623,757 | At December 31, 2017 and 2016, investment in real estate consisted of the following: a Useful life December 31, 2017 December 31, 2016 Commercial real property 39 Years $ 7,708,571 $ — Less: accumulated depreciation (84,814 ) — $ 7,623,757 $ — |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Intangible Assets | At March 31, 2018 and December 31, 2017, intangible assets consisted of the following: Useful Life March 31, 2018 December 31, 2017 Patents and other technologies 5 Years $ 1,583,260 $ 2,593,478 Goodwill — 397,569 Less: accumulated amortization (81,893 ) (86,449 ) Less: impairment loss — (1,321,338 ) $ 1,501,367 $ 1,583,260 | At December 31, 2017 and 2016, intangible assets consisted of the following: Useful Life December 31, 2017 December 31, 2016 Patents and other technologies 5 Years $ 2,593,478 $ — Goodwill 397,569 — Less: accumulated amortization (86,449 ) — Less: impairment loss (1,321,338 ) — $ 1,583,260 $ — |
Schedule of Intangible Assets, Future Amortization Expense | For the three months ended March 31, 2018 and 2017, amortization expense amounted to $81,893 and $0, respectively. Amortization of intangible assets attributable to future periods is as follows: Twelve-month periods ending March 31: Amortization amount 2019 $ 327,571 2020 327,571 2021 327,571 2022 327,571 2023 191,083 $ 1,501,367 | Amortization of intangible assets attributable to future periods is as follows: Year ending December 31: Amortization amount 2018 $ 327,571 2019 327,571 2020 327,571 2021 327,571 2022 272,976 $ 1,583,260 |
ACCRUED LIABILITIES AND OTHER40
ACCRUED LIABILITIES AND OTHER PAYABLES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Payables and Accruals [Abstract] | ||
Schedule of accrued liabilities and other payables | At March 31, 2018 and December 31, 2017, accrued liabilities and other payables consisted of the following: March 31, 2018 December 31, 2017 Accrued professional fees $ 211,262 $ 82,913 Accrued dues and subscriptions 25,000 — Accrued payroll liability 7,036 6,767 Other 59,202 34,384 $ 302,500 $ 124,064 | At December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following: December 31, 2017 December 31, 2016 Accrued interest $ 138,110 $ — Accrued professional fees 82,913 14,080 Other 41,151 8,254 $ 262,174 $ 22,334 |
VAT AND OTHER TAXES PAYABLE (Ta
VAT AND OTHER TAXES PAYABLE (Tables) | 3 Months Ended | 5004 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
Schedule of VAT and other taxes payable | At March 31, 2018 and December 31, 2017, VAT and other taxes payable consisted of the following: March 31, 2018 December 31, 2017 Franchise tax due $ 27,498 $ — VAT payable — 819 Other taxes payable 6,859 2,178 $ 34,357 $ 2,997 | At December 31, 2017 and 2016, VAT and other taxes payable consisted of the following: December 31, 2017 December 31, 2016 VAT payable $ 819 $ 8,768 Other taxes payable 2,178 2,502 $ 2,997 $ 11,270 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | ||
Revenue from related parties | During the three months ended March 31, 2018 and 2017, medical related consulting services revenue from related party was as follows: Three Months Ended March 31, 2018 Three Month Ended March 31, 2017 Medical related consulting services provided to: Shanghai Daopei (1) $ — $ 66,286 $ — $ 66,286 (1) Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. | During the years ended December 31, 2017 and 2016, medical related consulting services revenue from related parties was as follows: Year Ended December 31, 2017 Year Ended December 31, 2016 Medical related consulting services provided to: Beijing Nanshan (1) $ 155,035 $ 162,500 Shanghai Daopei (2) 67,576 313,946 Hebei Yanda (3) — 140,000 $ 222,611 $ 616,446 (1) Beijing Nanshan is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. (2) Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. (3) Hebei Yanda is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Stock Option [Member] | |
Schedule of stock option activities | Employee stock option activities for the year ended December 31, 2017 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2016 — $ — Granted 2,110,000 0.54 Exercised — — Outstanding at December 31, 2017 2,110,000 0.54 Options exercisable at December 31, 2017 681,111 $ 0.59 Options expected to vest 1,428,889 $ 0.51 |
Non Employee Stock Option [Member] | |
Schedule of stock option activities | Non-employee stock option activities for the year ended December 31, 2017 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2016 — $ — Granted 180,000 1.00 Exercised — — Outstanding at December 31, 2017 180,000 1.00 Options exercisable at December 31, 2017 — $ — Options expected to vest 180,000 $ 1.00 |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | ||
Customers | The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the three months ended March 31, 2018 and 2017. Customer Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 A 27% 0 B 18% 0 C 14% 0 B (Shanghai Daopei, a related party) * 100% *Less than 10% | The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the years ended December 31, 2017 and 2016. Customer Year Ended December 31, 2017 Year Ended December 31, 2016 A (Beijing Nanshan, a related party) 14% 26% B (Shanghai Daopei, a related party) * 51% C (Hebei Yanda, a related party) * 23% D 20% 0 E 13% 0 F 11% 0 *Less than 10% |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | ||
Schedule of segment reporting information | Information with respect to these reportable business segments for the three months ended March 31, 2018 and 2017 was as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Revenues Real property operating $ 296,623 $ — Development services and sales of developed products 11,290 — Medical related consulting services – related party — 66,286 307,913 66,286 Depreciation and amortization Real property operating 32,624 — Development services and sales of developed products 86,749 — Medical related consulting services – related party 4,006 26 123,379 26 Interest expense Real property operating 236,986 — Development services and sales of developed products — — Medical related consulting services – related party — — 236,986 — Net loss Real property operating (237,700 ) — Development services and sales of developed products (173,474 ) — Medical related consulting services (100,132 ) (549,333 ) Other (a) (1,039,663 ) — $ (1,550,969 ) $ (549,333 ) Identifiable long-lived tangible assets at March 31, 2018 and December 31, 2017 March 31, 2018 December 31, 2017 Real property operating $ 7,612,747 $ 7,645,371 Development services and sales of developed products 120,396 5,857 Medical related consulting services 17,224 20,558 $ 7,750,367 $ 7,671,786 Identifiable long-lived tangible assets at March 31, 2018 and December 31, 2017 March 31, 2018 December 31, 2017 United States $ 7,613,567 $ 7,646,270 China 136,800 25,516 $ 7,750,367 $ 7,671,786 (a) The Company does not allocate any general and administrative expense of its being a public company activities to its reportable segments as these activities are managed at a corporate level. | Information with respect to these reportable business segments for the years ended December 31, 2017 and 2016 was as follows: Year Ended Year Ended December 31, 2017 December 31, 2016 Revenues Real property operating $ 828,663 $ — Medical related consulting services 222,611 616,446 Development services and sales of developed products 26,276 — 1,077,550 616,446 Depreciation and amortization Real property operating 86,135 — Medical related consulting services 8,774 26 Development services and sales of developed products 86,728 — 181,637 26 Interest expense Real property operating 138,110 — Medical related consulting services — — Development services and sales of developed products — — 138,110 — Net (loss) income Real property operating (309,415 ) — Medical related consulting services (385,515 ) 55,581 Development services and sales of developed products (1,463,401 ) — Other (a) (1,891,314 ) — $ (4,049,645 ) $ 55,581 Identifiable long-lived tangible assets at December 31, 2017 and 2016 December 31, 2017 December 31, 2016 Real property operating $ 7,645,371 $ — Medical related consulting services 20,558 295 Development services and sales of developed products 5,857 — $ 7,671,786 $ 295 Identifiable long-lived tangible assets at December 31, 2017 and 2016 December 31, 2017 December 31, 2016 United States $ 7,646,270 $ — China 25,516 295 $ 7,671,786 $ 295 (a) The Company does not allocate any general and administrative expense of its being a public company activities to its reportable segments as these activities are managed at a corporate level. |
NONCONTROLLING INTEREST (Tables
NONCONTROLLING INTEREST (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | ||
Summary of noncontrolling interest activities | The following is a summary of noncontrolling interest activities in the three months ended March 31, 2018. Amount Noncontrolling interest at December 31, 2017 $ (585,394 ) Net loss attributable to noncontrolling interest (69,390 ) Foreign currency translation adjustment attributable to noncontrolling interest 160 Noncontrolling interest at March 31, 2018 | The following is a summary of noncontrolling interest activities in the year ended December 31, 2017. Amount Noncontrolling interest at December 31, 2016 $ — Net loss attributable to noncontrolling interest (585,360 ) Foreign currency translation adjustment attributable to noncontrolling interest (34 ) Noncontrolling interest at December 31, 2017 $ (585,394 ) |
COMMITMENTS AND CONTINCENGIES (
COMMITMENTS AND CONTINCENGIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Beijing GenExosome Office Lease [Member] | |
Schedule of Future Minimum Rental Payments for Operating Leases | . Future minimum rental payment required under this operating lease is as follows: Twelve-month Period Ending March 31: Amount 2019 $ 6,249 |
GenExosome Office Lease [Member] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum rental payment required under this operating lease is as follows: Twelve-month Period Ending March 31: Amount 2019 $ 2,700 |
Shanghai Office Lease [Member] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum rental payment required under the Beijing Office Lease is as follows: Twelve-month Period Ending March 31: Amount 2019 $ 88,041 |
ORGANIZATION AND NATURE OF OP48
ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Reverse split ratio | 1:4 | 1:4 |
BASIS OF PRESENTATION AND GOI49
BASIS OF PRESENTATION AND GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||||
Working capital deficit | $ (2,125,207) | |||
Accumulated deficit | $ (4,999,233) | (3,517,654) | $ (53,369) | |
Net (loss) income | (1,550,969) | (4,049,645) | 55,581 | |
Net cash flow (used in) provided by operating activities | $ (416,234) | $ (412,814) | $ (1,339,692) | $ 13,984 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | |
Patents and other technologies | $ 1,583,260 | $ 1,501,367 | |
Goodwill | |||
Total | 1,583,260 | 1,501,367 | |
Impairment loss | 1,321,338 | ||
Patents and other technologies | |||
Total | 1,583,260 | ||
Impairment loss | 923,769 | ||
Goodwill [Member] | |||
Total | |||
Impairment loss | 397,569 | ||
Fair Value, Inputs, Level 1 [Member] | |||
Patents and other technologies | |||
Goodwill | |||
Total | |||
Fair Value, Inputs, Level 2 [Member] | |||
Patents and other technologies | |||
Goodwill | |||
Total | |||
Fair Value, Inputs, Level 3 [Member] | |||
Patents and other technologies | 1,583,260 | $ 1,501,367 | |
Goodwill | |||
Total | $ 1,583,260 |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Balance at beginning | $ 1,583,260 | |||
Intangible assets acquired | 2,991,047 | |||
Amortization of intangible assets | (81,893) | 0 | (86,449) | $ 0 |
Impairment loss | (1,321,338) | |||
Balance at end | 1,501,367 | 1,583,260 | ||
Patents and other technologies | ||||
Balance at beginning | 1,583,260 | |||
Intangible assets acquired | 2,593,478 | |||
Amortization of intangible assets | (86,449) | |||
Impairment loss | (923,769) | |||
Balance at end | 1,583,260 | |||
Goodwill [Member] | ||||
Balance at beginning | ||||
Intangible assets acquired | 397,569 | |||
Amortization of intangible assets | 0 | |||
Impairment loss | (397,569) | |||
Balance at end |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total cash | $ 2,125,656 | $ 3,027,033 | $ 2,886,189 |
Percentage of concentrations of credit risk | 100.00% | 100.00% | 100.00% |
United States [Member] | |||
Total cash | $ 873,663 | $ 1,700,024 | $ 360,559 |
Percentage of concentrations of credit risk | 41.10% | 56.20% | 12.50% |
China [Member] | |||
Total cash | $ 1,251,993 | $ 1,327,009 | $ 2,525,630 |
Percentage of concentrations of credit risk | 58.90% | 43.80% | 87.50% |
SUMMARY OF SIGNIFICANT ACCOUN53
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||||
Net (loss) income available to Avalon GloboCare Corp. for basic and diluted net (loss) income per share of common stock | $ (1,481,579) | $ (549,333) | $ (3,464,285) | $ 55,581 |
Weighted average common stock outstanding - basic and diluted | 69,781,733 | 62,595,289 | 65,033,472 | 51,139,475 |
Net (loss) income per common share attributable to Avalon GloboCare Corp. - basic and diluted | $ (0.02) | $ (0.01) | $ (0.05) | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN54
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash | $ 2,125,656 | $ 3,027,033 | $ 2,886,189 | |
Stock options | 2,410,000 | 111,111 | 2,290,000 | 0 |
Depreciation expense | $ 9,681 | $ 26 | $ 10,374 | $ 26 |
Deferred rental income | $ 7,254 | $ 12,769 | ||
Useful Life of patents and other technologies | 5 years | 5 years | ||
Impairment loss | $ (1,321,338) | |||
Intangible assets acquired | 1,583,260 | |||
Due to related parties | $ 450,000 | $ 450,000 | 97,150 | |
Shipping and Handling Costs | $ 25 | 0 | ||
Reverse split ratio | 1:4 | 1:4 | ||
Real property operating [Member] | ||||
Depreciation expense | $ 31,805 | $ 0 | $ 84,814 | |
PRC [Member] | ||||
Cash | 1,251,993 | 1,327,009 | 2,525,630 | |
United States [Member] | ||||
Cash | $ 873,663 | $ 1,700,024 | $ 360,559 | |
Beijing GenExosome | Dr. Yu Zhou | ||||
Equity interests ownership percentage | 40.00% |
ACQUISITION (Details)
ACQUISITION (Details) - Beijing GenExosome | Oct. 25, 2017USD ($) |
Assets acquired: | |
Cash | $ 72,032 |
Inventory | 1,081 |
Prepaid expenses | 142 |
Security deposit | 753 |
Property and equipment | 3,346 |
Intangible assets goodwill | 397,569 |
Total assets | 474,923 |
Liabilities assumed: | |
Accrued liabilities and other payables | 24,923 |
Total liabilities | 24,923 |
Purchase price | $ 450,000 |
ACQUISITION (Details 1)
ACQUISITION (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Combinations [Abstract] | |||
Net revenues | $ 66,286 | $ 1,077,550 | $ 671,863 |
Net loss | (1,056,378) | (4,171,807) | (405,983) |
Net loss attributable to Avalon GloboCare Corp. | $ (1,053,082) | $ (3,561,650) | $ (420,879) |
Net loss per share | $ (0.02) | $ (0.05) | $ (0.01) |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | $ 66,286 | $ 1,077,550 | $ 671,863 | |
Net loss | $ (1,056,378) | (4,171,807) | (405,983) | |
Acquisition related costs | 101,236 | |||
Impairment loss | (1,321,338) | |||
Goodwill [Member] | ||||
Impairment loss | $ (397,569) | |||
Beijing GenExosome | ||||
Revenue | $ 26,276 | |||
Net loss | $ 30,327 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | |||
Raw material | $ 10,111 | $ 2,667 | |
Inventory, Gross | 10,111 | 2,667 | |
Less: reserve for obsolete inventory | |||
Inventory net | $ 10,111 | $ 2,667 |
PREPAID EXPENSES AND OTHER CU59
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid professional fees | $ 15,000 | $ 65,000 | $ 32,004 |
Prepaid dues and subscriptions | 11,168 | 49,167 | |
Prepayment for acquisition of real property | 700,000 | ||
Other | 48,238 | 35,546 | 17,792 |
Total prepaid expenses and other | $ 74,406 | $ 149,713 | $ 749,796 |
PREPAYMENT FOR LONG-TERM ASSE60
PREPAYMENT FOR LONG-TERM ASSETS (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Notes to Financial Statements | |||
Prepayment for manufacturing equipment purchased | $ 47,714 | $ 153,688 | |
Prepayment for long-term assets | $ 47,714 | $ 153,688 |
PROPERTY, PLANT AND EQUIPMENT61
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment, Gross | $ 180,198 | $ 59,676 | $ 320 |
Less: accumulated depreciation | (21,783) | (11,647) | (25) |
Property, Plant and Equipment, Net | 158,415 | 48,029 | 295 |
Laboratory equipment [Member] | |||
Property, Plant and Equipment, Gross | $ 122,837 | $ 3,685 | |
Useful life | 5 years | 5 years | |
Office Equipment and Furniture [Member] | |||
Property, Plant and Equipment, Gross | $ 31,954 | $ 31,440 | 320 |
Leasehold improvement [Member] | |||
Property, Plant and Equipment, Gross | $ 25,407 | $ 24,551 | |
Useful life | 1 year 9 months | 1 year 9 months | |
Minimum [Member] | Office Equipment and Furniture [Member] | |||
Useful life | 3 years | 3 years | |
Maximum [Member] | Office Equipment and Furniture [Member] | |||
Useful life | 10 years | 10 years |
PROPERTY, PLANT AND EQUIPMENT62
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation expense | $ 9,681 | $ 26 | $ 10,374 | $ 26 |
Other Operating Expense [Member] | ||||
Depreciation expense | 5,094 | 26 | 8,941 | 26 |
Real Property Operating Expense [Member] | ||||
Depreciation expense | 819 | 0 | 1,321 | 0 |
Cost of Development services and sales of developed products[Member] | ||||
Depreciation expense | $ 3,768 | $ 0 | $ 112 | $ 0 |
INVESTMENT IN REAL ESTATE (Deta
INVESTMENT IN REAL ESTATE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Real Estate [Abstract] | |||
Useful life | 39 years | 39 years | |
Commercial real property | $ 7,708,571 | $ 7,708,571 | |
Less: accumulated depreciation | (116,619) | (84,814) | |
Investment in real estate, net | $ 7,591,952 | $ 7,623,757 |
INVESTMENT IN REAL ESTATE (De64
INVESTMENT IN REAL ESTATE (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Real property operating [Member] | |||
Depreciation expense | $ 31,805 | $ 0 | $ 84,814 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Useful Life of patents and other technologies | 5 years | 5 years | |
Patents and other technologies | $ 1,583,260 | $ 2,593,478 | |
Goodwill | 397,569 | ||
Less: accumulated amortization | (81,893) | (86,449) | |
Less: impairment loss | (1,321,338) | ||
Intangible assets net | $ 1,501,367 | $ 1,583,260 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 327,571 | $ 327,571 |
2,020 | 327,571 | 327,571 |
2,021 | 327,571 | 327,571 |
2,022 | 327,571 | 327,571 |
2,023 | 191,083 | 272,976 |
Intangible Assets Net | $ 1,501,367 | $ 1,583,260 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impairment loss | $ (1,321,338) | |||
Intangible assets acquired | 2,991,047 | |||
Amortization expense | $ 81,893 | $ 0 | 86,449 | $ 0 |
Patents and other technologies | ||||
Impairment loss | (923,769) | |||
Intangible assets acquired | 2,593,478 | |||
Amortization expense | 86,449 | |||
Goodwill [Member] | ||||
Impairment loss | (397,569) | |||
Intangible assets acquired | 397,569 | |||
Amortization expense | $ 0 |
ACCRUED LIABILITIES AND OTHER68
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | |||
Accrued professional fees | $ 211,262 | $ 82,913 | $ 14,080 |
Accrued dues and subscriptions | 25,000 | ||
Accrued payroll liability | 7,036 | 6,767 | |
Other | 59,202 | 34,384 | 8,254 |
Total accounts payable and accrued liabilities | $ 302,500 | $ 124,064 | $ 22,334 |
LOAN PAYABLE (Details Narrative
LOAN PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2018 | Nov. 30, 2017 | Apr. 19, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |||||
Loan principal amount | $ 2,100,000 | ||||
Maturity date | Mar. 31, 2019 | ||||
Term | 1 year | ||||
Annual interest rate | 10.00% | ||||
Repayment of loan | $ 500,000 | $ 600,000 | $ 600,000 | ||
Outstanding principal balance | 1,500,000 | $ 1,500,000 | |||
Accrued and unpaid interest | $ 138,110 | $ 175,096 |
VAT AND OTHER TAXES PAYABLE (De
VAT AND OTHER TAXES PAYABLE (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Notes to Financial Statements | |||
Franchise tax due | $ 27,498 | ||
VAT payable | $ 819 | $ 8,768 | |
Other taxes payable | 6,859 | 2,178 | 2,502 |
VAT and other tax payable | $ 34,357 | $ 2,997 | $ 11,270 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Medical related consulting services | [1] | $ 222,611 | $ 616,446 | ||
Shanghai Daopei [Member] | |||||
Medical related consulting services | [1] | 66,286 | 313,946 | ||
Beijing Nanshan [Member] | |||||
Medical related consulting services | [2] | $ 155,035 | 162,500 | ||
Hebei Yanda [Member] | |||||
Medical related consulting services | [3] | $ 140,000 | |||
[1] | Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. | ||||
[2] | Beijing Nanshan is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. | ||||
[3] | Hebei Yanda is a subsidiary of an entity whose chairman is Wenzhao Lu, the major shareholder of the Company. |
RELATED PARTY TRANSACTIONS (D72
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 17, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts receivable - related party | $ 0 | $ 70,228 | |||
Accrued liabilities and other payables - related parties | $ 25,481 | 39,927 | 8,587 | ||
Due to related party | 450,000 | 450,000 | 97,150 | ||
Management fee related to property management | 5,417 | ||||
Property management fee | $ 16,251 | $ 16,251 | $ 43,336 | ||
Real property management agreement expire | May 4, 2019 | May 4, 2019 | |||
Distribution of Avalon GloboCare Corp.'s shares to founders | $ 0 | (230,000) | |||
Wenzhao Lu [Member] | |||||
Working capital advance | 0 | 9,000 | |||
Working capital advance from related party | 20,000 | ||||
Working capital advance paid | 29,000 | ||||
Yu Zhou [Member] | |||||
Accrued liabilities and other payables - related parties | $ 8,024 | 24,540 | |||
Due to related party | 450,000 | ||||
Meng Li [Member] | |||||
Accrued liabilities and other payables - related parties | 0 | 309 | |||
Working capital advance | 0 | 87,650 | |||
Working capital advance paid | 87,650 | ||||
David Jin [Member] | |||||
Accrued liabilities and other payables - related parties | $ 17,457 | 15,387 | 6,278 | ||
Working capital advance | 0 | 500 | |||
Working capital advance paid | 500 | ||||
Avalon Heathcare Systems, Inc. | Office Lease [Member] | |||||
Monthly rent expenses | $ 1,000 | ||||
Rent expense related to Office Lease | 8,000 | 2,000 | |||
Unpaid rent expense related to Office Lease | $ 0 | $ 2,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
United states loss before income taxes | $ (3,794,872) | $ (10,202) | ||
China (loss) income before income taxes | (254,773) | 87,710 | ||
Total (loss) income before income taxes | $ (1,550,969) | $ (549,333) | $ (4,049,645) | $ 77,508 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | ||||
U.S. federal | ||||
U.S. state and local | ||||
China | 21,927 | |||
Total current income taxes expense | 21,927 | |||
Deferred: | ||||
U.S. federal | ||||
U.S. state and local | ||||
China | ||||
Total deferred income taxes expense | ||||
Total income taxes expense | $ 21,927 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal rate | 34.00% | 34.00% |
U.S. state rate | 5.00% | 5.00% |
Non-deductible expenses | (22.30%) | 0.00% |
U.S. effective rate in excess of China tax rate | (1.00%) | (15.80%) |
U.S. valuation allowance | (15.70%) | 5.10% |
Total provision for income taxes | 0.00% | 28.30% |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net U.S. operating loss carryforward | $ 420,695 | $ 43,904 |
Valuation allowance | (420,695) | (43,904) |
Net deferred tax assets |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate | 34.00% | 34.00% | ||
Expiration year | 2,037 | |||
Net operating loss for income taxes purposes | $ 1,481,000 | |||
Income taxes expense | $ 21,927 | |||
Valuation allowance | 420,695 | $ 43,904 | ||
Increase in valuation allowance | $ 377,000 | |||
Corporate tax rate, Description | The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%. | |||
United States loss before income taxes, Description | United States loss before income taxes is $1,433,074, which will not be included in the Company’s consolidated income tax return, because the Company owns only 60% of GenExosome. The U.S. tax law requires 80% ownership to consolidate. | |||
Penalty | $ 10,000 |
EQUITY (Details)
EQUITY (Details) - Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
1.49 | ||
Number of options outstanding | 60,000 | 60,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 29 days | 4 years 3 months 26 days |
Weighted Average Exercise Price ($) | $ 1.49 | $ 1.49 |
Number options Exercisable | 60,000 | 60,000 |
Weighted Average options Exercise Price | $ 1.49 | $ 1.49 |
1 | ||
Number of options outstanding | 230,000 | 230,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 3 years 7 days | 3 years 3 months 8 days |
Weighted Average Exercise Price ($) | $ 1 | $ 1 |
Number options Exercisable | 110,000 | 10,000 |
Weighted Average options Exercise Price | $ 1 | $ 1 |
2.50 | ||
Number of options outstanding | 120,000 | |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 3 days | |
Weighted Average Exercise Price ($) | $ 2.5 | |
Number options Exercisable | 30,000 | |
Weighted Average options Exercise Price | $ 2.5 | |
0.50-2.50 | ||
Number of options outstanding | 2,410,000 | |
Range of Weighted Average Remaining Contractual Life (Years) | 7 years 11 months 23 days | |
Weighted Average Exercise Price ($) | $ 0.67 | |
Number options Exercisable | 977,778 | |
Weighted Average options Exercise Price | $ 0.68 | |
0.50 | ||
Number of options outstanding | 2,000,000 | 2,000,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 8 years 10 months 14 days | 9 years 1 month 9 days |
Weighted Average Exercise Price ($) | $ 0.5 | $ 0.50 |
Number options Exercisable | 777,778 | 611,111 |
Weighted Average options Exercise Price | $ 0.50 | $ 0.50 |
0.50-1.49 | ||
Number of options outstanding | 2,290,000 | |
Range of Weighted Average Remaining Contractual Life (Years) | 8 years 4 months 24 days | |
Weighted Average Exercise Price ($) | $ 0.58 | |
Number options Exercisable | 681,111 | |
Weighted Average options Exercise Price | $ 0.59 |
EQUITY (Details 1)
EQUITY (Details 1) - Employee Stock Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Balance at beginning | 2,110,000 | |
Granted | 120,000 | 2,110,000 |
Balance at end | 2,230,000 | 2,110,000 |
Option Exercisable at end | 887,778 | 681,111 |
Options expected to vest | 1,342,222 | 1,428,889 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Balance at beginning | $ 0.54 | |
Granted | 2.5 | $ 0.54 |
Balance at end | 0.65 | 0.54 |
Option Exercisable at end | 0.65 | 0.59 |
Options expected to vest | $ 0.65 | $ 0.51 |
EQUITY (Details 2)
EQUITY (Details 2) - Employee Stock Option [Member] | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model |
Dividend rate | 0.00% |
Terms (in years) | 5 years |
Volatility | 185.28% |
Risk-free interest rate | 2.25% |
EQUITY (Details 3)
EQUITY (Details 3) - Employee Stock Option [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Nonvested at beginning | 1,428,889 | |
Granted | 120,000 | 2,110,000 |
Vested | (206,667) | 681,111 |
Nonvested at end | 1,342,222 | 1,428,889 |
Weighted Average Exercise Price | ||
Nonvested at beginning | $ 0.51 | |
Granted | 2.5 | $ 0.54 |
Vested | (0.81) | 0.59 |
Nonvested at end | $ 0.65 | $ 0.51 |
Grant Date Fair Value | ||
Nonvested at beginning | $ 1,876,079 | |
Granted | 289,150 | 2,719,960 |
Vested | (315,613) | 843,881 |
Nonvested at end | $ 1,849,616 | $ 1,876,079 |
EQUITY (Details 4)
EQUITY (Details 4) - Non Employee Stock Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Balance at beginning | 180,000 | |
Granted | 180,000 | |
Vested | (90,000) | |
Balance at end | 90,000 | 180,000 |
Option Exercisable at end | 90,000 | |
Options expected to vest | 90,000 | 180,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Balance at beginning | $ 1 | |
Granted | $ 1 | |
Vested | (1) | |
Balance at end | 1 | 1 |
Option Exercisable at end | 1 | |
Options expected to vest | $ 1 | $ 1 |
EQUITY (Details 5)
EQUITY (Details 5) - Non Employee Stock Option [Member] | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model | Black-Scholes option-pricing model |
Dividend rate | 0.00% | 0.00% |
Terms (in years) | 3 years | |
Minimum [Member] | ||
Terms (in years) | 3 years | |
Volatility | 183.23% | 298.49% |
Risk-free interest rate | 2.29% | 1.74% |
Maximum [Member] | ||
Terms (in years) | 10 years | |
Volatility | 188.29% | 597.16% |
Risk-free interest rate | 2.37% | 2.40% |
EQUITY (Details 6)
EQUITY (Details 6) - Employee Stock Option [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Nonvested at beginning | 1,428,889 | |
Granted | 120,000 | 2,110,000 |
Vested | (206,667) | 681,111 |
Nonvested at end | 1,342,222 | 1,428,889 |
Weighted Average Exercise Price | ||
Nonvested at beginning | $ 0.51 | |
Granted | 2.5 | $ 0.54 |
Vested | (0.81) | 0.59 |
Nonvested at end | $ 0.65 | $ 0.51 |
Grant Date Fair Value | ||
Nonvested at beginning | $ 1,876,079 | |
Granted | 289,150 | 2,719,960 |
Vested | (315,613) | 843,881 |
Nonvested at end | $ 1,849,616 | $ 1,876,079 |
EQUITY (Details 7)
EQUITY (Details 7) - Non Employee Stock Option [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Nonvested at beginning | 180,000 | |
Granted | 180,000 | |
Vested | (90,000) | |
Forfeited | ||
Nonvested at end | 90,000 | 180,000 |
Weighted Average Exercise Price | ||
Nonvested at beginning | $ 1 | |
Granted | 1 | |
Vested | (1) | |
Forfeited | ||
Nonvested at end | $ 1 | $ 1 |
Grant Date Fair Value | ||
Nonvested at beginning | $ 447,348 | |
Granted | 447,348 | |
Nonvested at end | $ 202,193 | $ 447,348 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | Mar. 03, 2017 | May 31, 2018 | Mar. 31, 2018 | Mar. 27, 2018 | Dec. 19, 2017 | Apr. 19, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 19, 2016 |
Preferred stock, authorised | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Common stock, authorised | 490,000,000 | 490,000,000 | 490,000,000 | 490,000,000 | 490,000,000 | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Preferred stock, issued | 0 | 0 | 0 | 0 | 0 | |||||||
Preferred stock, outstanding | 0 | 0 | 0 | 0 | 0 | |||||||
Common stock, issued | 70,278,622 | 70,278,622 | 70,278,622 | 70,278,622 | 61,628,622 | |||||||
Common stock, outstanding | 69,758,622 | 69,758,622 | 70,278,622 | 70,278,622 | 61,628,622 | |||||||
Refundable deposit | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 | ||||||||
AHS founders' contribution | 141,000 | |||||||||||
Stock-based professional fees | 21,500 | |||||||||||
Stock-based professional fees in connection with issuance of shares | 31,050 | |||||||||||
Common shares sold for cash | 7,270,000 | 5,150,000 | ||||||||||
Purchase price per share | $ 0.50 | $ 1 | $ 1 | |||||||||
Proceeds from sale of common stock | $ 3,635,000 | $ 5,099,375 | ||||||||||
Agent service fee | $ 50,625 | |||||||||||
Options Exercisable | 681,111 | 681,111 | ||||||||||
Intrinsic value of stock options outstanding | $ 4,405,600 | $ 4,405,600 | ||||||||||
Intrinsic value of stock options exercisable | 1,297,822 | 1,297,822 | ||||||||||
Intangible assets acquired | 2,991,047 | |||||||||||
Term | 1 year | |||||||||||
Refundable deposit | 3,000,000 | |||||||||||
Accrued and unpaid interest | 375,096 | $ 375,096 | ||||||||||
Legal Service Agreements [Member] | ||||||||||||
Common stock, issued | 1,056,122 | |||||||||||
Consulting Service Agreements [Member] | ||||||||||||
Common stock, issued | 1,552,500 | |||||||||||
Director [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants | 60,000 | |||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.49 | |||||||||||
Chief Financial OfficerMember | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants | 2,000,000 | |||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.5 | |||||||||||
Non Employee Stock Option [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants | 180,000 | |||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1 | |||||||||||
Amortization of stock-based compensation expense | 29 days | 3 months 29 days | ||||||||||
Intrinsic value of stock options outstanding | 253,800 | $ 253,800 | ||||||||||
Intrinsic value of stock options exercisable | 126,900 | 126,900 | ||||||||||
Aggregate value of nonvested options | 67,398 | $ 67,398 | ||||||||||
Employee Stock Option [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants | 120,000 | 2,110,000 | ||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 2.5 | $ 0.54 | ||||||||||
Amortization of stock-based compensation expense | 1 year 9 months 29 days | 2 years 1 month 6 days | ||||||||||
Intrinsic value of stock options outstanding | 3,945,700 | $ 3,945,700 | ||||||||||
Intrinsic value of stock options exercisable | 1,568,956 | 1,568,956 | ||||||||||
Aggregate value of nonvested options | 1,849,616 | 1,849,616 | ||||||||||
DOING Biomedical Technology Co., Ltd | ||||||||||||
Related party repayment obligation | $ 200,000 | 200,000 | ||||||||||
Accrued and unpaid interest | $ 1,000,000 | 1,000,000 | ||||||||||
Escrow agent | ||||||||||||
Share repurchase cost | $ 2,500 | |||||||||||
Third party | ||||||||||||
Common stock repurchased, Shares | 520,000 | |||||||||||
Common stock repurchased, Value | $ 522,500 | |||||||||||
Subscription Agreement | Accredited investor | ||||||||||||
Common stock issued, Shares | 3,000,000 | 3,000,000 | ||||||||||
Common stock issued, Value | $ 3,000,000 | $ 3,000,000 | ||||||||||
Subscription Agreement | Accredited investor | Avalon (Shanghai) Healthcare Technology Co., Ltd. | ||||||||||||
Term | 3 years | |||||||||||
Annual interest | 20.00% | |||||||||||
Principal amount | $ 3,000,000 | |||||||||||
Share price | $ 1.20 |
STATUTORY RESERVE (Details Narr
STATUTORY RESERVE (Details Narrative) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Notes to Financial Statements | |||
Statutory reserve | $ 6,578 | $ 6,578 | $ 6,578 |
NONCONTROLLING INTEREST (Detail
NONCONTROLLING INTEREST (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | ||
Noncontrolling interest at Beginning | $ (585,394) | |
Net loss attributable to noncontrolling interest | (69,390) | (585,360) |
Foreign currency translation adjustment attributable to noncontrolling interest | 160 | (34) |
Noncontrolling interest at end | $ (654,624) | $ (585,394) |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenues | $ 307,913 | $ 66,286 | $ 1,077,550 | $ 616,446 | |
Depreciation | 123,379 | 181,637 | 181,637 | 26 | |
Interest expenses | 236,986 | 138,110 | |||
Net income (loss) | (1,550,969) | (4,049,645) | 55,581 | ||
Identifiable long-lived tangible assets | 7,750,367 | 7,671,786 | 295 | ||
Development services and sales of developed products[Member] | |||||
Revenues | 11,290 | 26,276 | |||
Depreciation | 86,749 | 86,728 | |||
Net income (loss) | (173,474) | (1,463,401) | |||
Identifiable long-lived tangible assets | 120,396 | 5,857 | |||
Medical related consulting services [Member] | |||||
Revenues | 222,611 | 616,446 | |||
Depreciation | 4,006 | 8,774 | 26 | ||
Net income (loss) | (100,132) | (385,515) | 55,581 | ||
Identifiable long-lived tangible assets | 17,224 | 20,558 | $ 295 | ||
Real property operating [Member] | |||||
Revenues | 296,623 | 828,663 | |||
Depreciation | 32,624 | 86,135 | |||
Interest expenses | 236,986 | 138,110 | |||
Net income (loss) | (237,700) | (309,415) | |||
Identifiable long-lived tangible assets | 7,612,747 | $ 7,645,371 | |||
Others [Member] | |||||
Net income (loss) | $ (1,039,663) | [1] | $ (1,891,314) | ||
[1] | The Company does not allocate any general and administrative expense of its being a public company activities to its reportable segments as these activities are managed at a corporate level. |
SEGMENT INFORMATION (Details 1)
SEGMENT INFORMATION (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Identifiable long-lived tangible assets | $ 7,750,367 | $ 7,671,786 | $ 295 |
China [Member] | |||
Identifiable long-lived tangible assets | 136,800 | 25,516 | $ 295 |
United States [Member] | |||
Identifiable long-lived tangible assets | $ 7,613,567 | $ 7,646,270 |
COMMITMENTS AND CONTINCENGIES91
COMMITMENTS AND CONTINCENGIES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
GenExosome Office Lease [Member] | ||
Twelve-month Period Ending March 31, 2019 | $ 2,700 | $ 3,600 |
Avalon Shanghai Office Lease [Member] | ||
Twelve-month Period Ending March 31, 2019 | 88,041 | 106,318 |
Year Ending December 31, 2018 | 97,547 | |
Year Ending December 31, 2019 | 8,771 | |
Beijing GenExosome Office Lease [Member] | ||
Twelve-month Period Ending March 31, 2019 | $ 6,249 | $ 1,264 |
COMMITMENTS AND CONTINCENGIES92
COMMITMENTS AND CONTINCENGIES (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2017 | Jun. 06, 2017 | Nov. 22, 2016 | Oct. 17, 2016 | |
Severance payments | $ 528,900 | $ 528,900 | $ 302,000 | ||||||
Flat cash fee | $ 5,417 | ||||||||
Expiration period | May 4, 2019 | May 4, 2019 | |||||||
Initial advisory fee | $ 30,000 | ||||||||
Purchase laboratory equipment | 145,000 | $ 140,000 | |||||||
Outstanding commitment | $ 94,000 | 97,000 | 94,000 | ||||||
Mergers and Acquisitions Consulting Service Contract [Member] | |||||||||
Accrued consulting service fees | 4,168 | ||||||||
Consulting Service Agreement [Member] | |||||||||
Flat cash fee | $ 15,000 | $ 15,000 | |||||||
Accrued consulting service fees | 30,000 | 35,000 | 30,000 | 10,000 | |||||
Investor Relations Service Contract [Member] | |||||||||
Accrued investor relations service fees | 10,000 | 30,000 | 10,000 | ||||||
Education Program Agreement [Member] | |||||||||
Accrued Fees | $ 25,000 | ||||||||
Service Agreement One [Member] | |||||||||
Flat cash fee | $ 4,800 | ||||||||
Accrued consulting service fees | 10,000 | $ 10,000 | $ 1,600 | ||||||
Beijing Office Lease [Member] | |||||||||
Expiration period | Feb. 28, 2019 | Feb. 28, 2019 | |||||||
Rent expense | $ 26,000 | $ 24,000 | $ 87,000 | ||||||
Beijing GenExosome Office Lease [Member] | |||||||||
Expiration period | Mar. 14, 2019 | Mar. 14, 2018 | |||||||
Lease, annual rent | $ 7,000 | ||||||||
Rent expense | $ 1,011 | $ 1,612 | |||||||
GenExosome Office Lease [Member] | |||||||||
Expiration period | Dec. 31, 2018 | Dec. 31, 2018 | |||||||
Rent expense | $ 900 |
CONCENTRATION (Details)
CONCENTRATION (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Customer | 100.00% | 100.00% | 100.00% |
More Than 10% Revenues [Member] | B [Member] | |||
Customer | 18.00% | 51.00% | |
More Than 10% Revenues [Member] | A [Member] | |||
Customer | 27.00% | 14.00% | 26.00% |
More Than 10% Revenues [Member] | D [Member] | |||
Customer | 20.00% | 0.00% | |
More Than 10% Revenues [Member] | F [Member] | |||
Customer | 11.00% | 0.00% | |
More Than 10% Revenues [Member] | E [Member] | |||
Customer | 13.00% | 0.00% | |
More Than 10% Revenues [Member] | C [Member] | |||
Customer | 14.00% | 23.00% |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Uninsured cash balances | $ 1,251,993 | ||
Cash balances in excess of FDI | $ 182,000 | ||
PRC [Member] | |||
Uninsured cash balances | $ 1,327,009 | $ 2,525,630 | |
Cash balances in excess of FDI | $ 1,162,000 | $ 80,000 |
RESTRICTED NET ASSETS (Details
RESTRICTED NET ASSETS (Details Narrative) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Notes to Financial Statements | |||
Net assets | 25.00% | 25.00% | 25.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | May 05, 2018 | May 03, 2018 | Mar. 03, 2017 | Jul. 31, 2018 | May 31, 2018 | Apr. 30, 2018 | Apr. 26, 2018 | Apr. 20, 2018 | Mar. 31, 2018 | Apr. 19, 2017 | Mar. 31, 2017 |
Term | 1 year | ||||||||||
Maturity date | Mar. 31, 2019 | ||||||||||
DOING Biomedical Technology Co., Ltd | |||||||||||
Related party repayment obligation | $ 200,000 | $ 200,000 | |||||||||
Subscription Agreement | Accredited investor | |||||||||||
Common stock issued, Shares | 3,000,000 | 3,000,000 | |||||||||
Common stock issued, Value | $ 3,000,000 | $ 3,000,000 | |||||||||
Subscription Agreement | Accredited investor | Avalon (Shanghai) Healthcare Technology Co., Ltd. | |||||||||||
Annual interest | 20.00% | ||||||||||
Share price | $ 1.20 | ||||||||||
Term | 3 years | ||||||||||
Subsequent Event [Member] | |||||||||||
Repayment of loan payable | $ 500,000 | ||||||||||
Interest paid | 175,096 | ||||||||||
Loan Payable | $ 1,000,000 | ||||||||||
Maturity date | Mar. 31, 2019 | ||||||||||
Subsequent Event [Member] | Common Shares Issued for Share Subscription Agreement | |||||||||||
Principal amount | $ 3,000,000 | ||||||||||
Rate of interest | 0.00% | ||||||||||
Subsequent Event [Member] | Subscription Agreement | Accredited investor | April 2018 Private Placement | |||||||||||
Common stock issued, Shares | 2,940,000 | ||||||||||
Common stock issued, Value | $ 5,145,000 | ||||||||||
Common stock redued due to reduce in investment, Shares | 2,660,000 | ||||||||||
Common stock redued due to reduce in investment, Value | $ 4,655,000 | ||||||||||
Purchase price | $ 997,500 | $ 157,500 | $ 3,500,000 |