Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 13, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Avalon GloboCare Corp. | |
Entity Central Index Key | 1,630,212 | |
Document Type | 10-Q/A | |
Trading Symbol | AVCO | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | true | |
Amendment description | This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends the Quarterly Report on Form 10-Q of Avalon GloboCare Corp. (the “Company”) for the quarter ended September 30, 2018 (the “Form 10-Q”), as filed with the Securities and Exchange Commission on November 13, 2018 (the “Original Filing Date”). | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 73,040,751 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash | $ 3,810,139 | $ 3,027,033 |
Accounts receivable - net of allowance for doubtful accounts | 134,319 | 10,179 |
Accounts receivable - related party, net of allowance for doubtful accounts | 214,665 | 0 |
Tenants receivable, net of allowance for doubtful accounts | 51,244 | 38,469 |
Security deposit | 418,464 | 6,916 |
Security deposit - related party | 291,163 | |
Inventory | 27,427 | 2,667 |
Prepaid expenses and other current assets | 364,655 | 149,713 |
Total Current Assets | 5,312,076 | 3,234,977 |
NON-CURRENT ASSETS: | ||
Security deposit - noncurrent portion | 25,322 | |
Prepayment for long-term assets | 153,688 | |
Property and equipment, net | 271,526 | 48,029 |
Investment in real estate, net | 7,920,912 | 7,623,757 |
Intangible assets, net | 1,337,582 | 1,583,260 |
Total Non-current Assets | 9,530,020 | 9,434,056 |
Total Assets | 14,842,096 | 12,669,033 |
CURRENT LIABILITIES: | ||
Accounts payable | 106,331 | 29 |
Accrued liabilities and other payables | 657,815 | 124,064 |
Accrued liabilities and other payables - related parties | 3,873 | 39,927 |
Deferred rental income | 3,525 | 12,769 |
Loan payable | 1,500,000 | |
Interest payable | 50,137 | 138,110 |
VAT and other taxes payable | 13,218 | 2,997 |
Tenants' security deposit | 73,400 | 92,288 |
Due to related parties | 250,000 | 450,000 |
Refundable deposit | 3,000,000 | |
Total Current Liabilities | 1,158,299 | 5,360,184 |
NON-CURRENT LIABILITIES: | ||
Loan payable - noncurrent portion | 1,000,000 | |
Total Non-current Liabilities | 1,000,000 | |
Total Liabilities | 2,158,299 | 5,360,184 |
EQUITY: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2018 and December 31, 2017 | ||
Common stock, $0.0001 par value; 490,000,000 shares authorized; 73,560,751 shares issued and 73,040,751 shares outstanding at September 30, 2018; 70,278,622 shares issued and outstanding at December 31, 2017 | 7,356 | 7,028 |
Additional paid-in capital | 22,822,878 | 11,490,285 |
Less: common stock held in treasury, at cost; 520,000 and 0 shares at September 30, 2018 and December 31, 2017, respectively | (522,500) | |
Accumulated deficit | (8,638,297) | (3,517,654) |
Statutory reserve | 6,578 | 6,578 |
Accumulated other comprehensive loss - foreign currency translation adjustment | (229,260) | (91,994) |
Total Avalon GloboCare Corp. stockholders' equity | 13,446,755 | 7,894,243 |
Non-controlling interest | (762,958) | (585,394) |
Total Equity | 12,683,797 | 7,308,849 |
Total Liabilities and Equity | $ 14,842,096 | $ 12,669,033 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 490,000,000 | 490,000,000 |
Common stock, issued | 73,560,751 | 70,278,622 |
Common stock, outstanding | 73,040,751 | 70,278,622 |
Treasury stock | 520,000 | 0 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUES | ||||
Real property rental | $ 272,444 | $ 315,284 | $ 847,939 | $ 537,538 |
Medical related consulting services - related parties | 71,398 | 2,166 | 213,394 | 220,949 |
Development services and sales of developed products | 69,661 | 156,176 | ||
Total Revenues | 413,503 | 317,450 | 1,217,509 | 758,487 |
COSTS AND EXPENSES | ||||
Real property operating expenses | 190,899 | 180,722 | 597,114 | 342,576 |
Medical related consulting services - related parties | 64,196 | 47,033 | 188,911 | 271,845 |
Development services and sales of developed products | 40,386 | 98,999 | ||
Total Costs and Expenses | 295,481 | 227,755 | 885,024 | 614,421 |
REAL PROPERTY OPERATING INCOME | 81,545 | 134,562 | 250,825 | 194,962 |
GROSS PROFIT (LOSS) FROM MEDICAL RELATED CONSULTING SERVICES | 7,202 | (44,867) | 24,483 | (50,896) |
GROSS PROFIT FROM DEVELOPMENT SERVICES AND SALES OF DEVELOPED PRODUCTS | 29,275 | 57,177 | ||
OTHER OPERATING EXPENSES: | ||||
Selling expense | 148 | 15,138 | ||
Advertising expenses | 150,548 | 150,548 | ||
Compensation and related benefits | 569,915 | 468,837 | 1,596,181 | 857,237 |
Professional fees | 1,449,768 | 186,208 | 2,614,565 | 566,131 |
Other general and administrative | 327,209 | 92,421 | 878,582 | 245,080 |
Total Other Operating Expenses | 2,497,440 | 747,614 | 5,239,876 | 1,683,586 |
LOSS FROM OPERATIONS | (2,379,418) | (657,919) | (4,907,391) | (1,539,520) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 1,394 | 122 | 3,102 | 1,126 |
Interest expense | (25,205) | (52,932) | (287,123) | (94,932) |
Foreign currency transaction loss | (106,929) | (57,244) | ||
Other (expense) income | (22) | 306 | ||
Total Other Expense, net | (23,833) | (52,810) | (390,644) | (151,050) |
LOSS BEFORE INCOME TAXES | (2,403,251) | (710,729) | (5,298,035) | (1,690,570) |
INCOME TAXES | ||||
NET LOSS | (2,403,251) | (710,729) | (5,298,035) | (1,690,570) |
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (58,581) | (177,392) | ||
NET LOSS ATTRIBUTABLE TO AVALON GLOBOCARE CORP. COMMON SHAREHOLDERS | (2,344,670) | (710,729) | (5,120,643) | (1,690,570) |
COMPREHENSIVE LOSS | ||||
NET LOSS | (2,403,251) | (710,729) | (5,298,035) | (1,690,570) |
Unrealized foreign currency translation (loss) gain | (94,069) | 6,151 | (137,438) | (25,973) |
COMPREHENSIVE LOSS | (2,497,320) | (704,578) | (5,435,473) | (1,716,543) |
LESS: COMPREHENSIVE LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (58,794) | (177,564) | ||
COMPREHENSIVE LOSS ATTRIBUTABLE TO AVALON GLOBOCARE CORP. COMMON SHAREHOLDERS | $ (2,438,526) | $ (704,578) | $ (5,257,909) | $ (1,716,543) |
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO AVALON GLOBOCARE CORP. COMMON SHAREHOLDERS | ||||
Basic and diluted | $ (0.03) | $ (0.01) | $ (0.07) | $ (0.03) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic and diluted | 72,573,462 | 64,628,622 | 71,611,375 | 63,958,292 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Statutory Reserve | Accumulated Other Comprehensive Loss | Noncontrolling Interest | Total |
Balance at beginning at Dec. 31, 2017 | $ 7,028 | $ 11,490,285 | $ (3,517,654) | $ 6,578 | $ (91,994) | $ (585,394) | $ 7,308,849 | ||
Balance at beginning (in shares) at Dec. 31, 2017 | 70,278,622 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Treasury stock purchase | (522,500) | (522,500) | |||||||
Repayment made for Share Subscription Agreement | $ (100) | $ 100 | |||||||
Repayment made for Share Subscription Agreement (in shares) | (1,000,000) | ||||||||
Refundable deposit exchange for common shares | 2,000,000 | 2,000,000 | |||||||
Common shares issued in equity raise, net of fees associated with equity raise | $ 404 | 7,064,313 | 7,064,717 | ||||||
Common shares issued in equity raise, net of fees associated with equity raise (in shares) | 4,046,450 | ||||||||
Common shares issued for services | $ 24 | 634,926 | 634,950 | ||||||
Common shares issued for services (in shares) | 235,679 | ||||||||
Stock-based compensation | 1,633,254 | 1,633,254 | |||||||
Foreign currency translation adjustment | (137,266) | (172) | (137,438) | ||||||
Net loss for the period | (5,120,643) | (177,392) | (5,298,035) | ||||||
Balance at end at Sep. 30, 2018 | $ 7,356 | $ 22,822,878 | $ (522,500) | $ (8,638,297) | $ 6,578 | $ (229,260) | $ (762,958) | $ 12,683,797 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,298,035) | $ (1,690,570) |
Adjustments to reconcile net loss from operations to net cash used in operating activities: | ||
Depreciation and amortization | 383,603 | 58,478 |
Stock-based compensation expenses | 2,224,969 | 602,224 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (131,357) | |
Accounts receivable - related parties | (226,166) | (91,463) |
Tenants receivable | (12,775) | (56,239) |
Inventory | (25,876) | |
Prepaid expenses and other current assets | (94,094) | 14,151 |
Security deposit | (710,098) | (30,081) |
Accounts payable | 18,105 | 21,600 |
Accrued liabilities and other payables | 454,772 | 320,505 |
Accrued liabilities and other payables - related parties | (35,846) | 22,990 |
Deferred rental income | (9,244) | 19,914 |
Interest payable | (87,973) | |
Income taxes payable | (21,400) | |
VAT and other taxes payable | 28,207 | (9,453) |
Tenants' security deposit | (18,888) | 92,288 |
NET CASH USED IN OPERATING ACTIVITIES | (3,540,696) | (747,056) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (49,949) | (50,994) |
Purchase of commercial real estate | (7,008,571) | |
Improvement of commercial real estate | (392,571) | |
Payment for previously acquired business | (200,000) | |
NET CASH USED IN INVESTING ACTIVITIES | (642,520) | (7,059,565) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds received from loan payable | 2,100,000 | |
Repayments of loan | (500,000) | |
Proceeds received from related parties' advance | 210,000 | |
Repayment of related parties' advance | (500) | |
Repurchase of common stock | (522,500) | |
Refundable deposit in connection with Share Subscription Agreement | 3,000,000 | |
Refund for refundable deposit in connection with Share Subscription Agreement | (1,000,000) | |
Proceeds received from equity offering | 7,551,013 | |
Disbursements for equity offering costs | (486,296) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 5,042,217 | 5,309,500 |
EFFECT OF EXCHANGE RATE ON CASH | (75,895) | (32,246) |
NET INCREASE (DECREASE) IN CASH | 783,106 | (2,529,367) |
CASH - beginning of period | 3,027,033 | 2,886,189 |
CASH - end of period | 3,810,139 | 356,822 |
Cash paid for: | ||
Interest | 375,096 | |
Income taxes | 21,400 | |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued in connection with Share Subscription Agreement | 300 | |
Acquisition of equipment by decreasing prepayment for long-term assets | 153,381 | |
Equipment acquired on credit as payable | 93,894 | |
Acquisition of real estate by decreasing prepayment for property | 700,000 | |
Common stock issued for future services | 33,235 | |
Refundable deposit exchange for common shares | $ 2,000,000 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2018 | |
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 are integrating 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. There was no activity for the subsidiary since its incorporation through September 30, 2018. Avalon (BVI) Ltd. is dormant and is in process of being dissolved. 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 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 biomaker 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 was paid in full as of the report date. 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. On July 18, 2018, the Company formed a wholly owned subsidiary, Avactis Biosciences Inc., a Nevada corporation, which will be focused on accelerating commercial activities related to cellular therapies, including regenerative medicine with stem/progenitor cells as well as cellular immunotherapy including CAR-T, CAR-NK, TCR-T and others. The subsidiary is designed to integrate and optimize our global scientific and clinical resources to further advance the use of cellular therapies to treat certain cancers. There was no activity for the subsidiary since its incorporation through September 30, 2018. Details of the Company’s subsidiaries which are included in these consolidated financial statements as of September 30, 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 other customers and sells developed items to hospitals and other customers in China Avactis Biosciences Inc. (“Avactis”) Nevada July 18, 2018 100% held by AVCO Integrate and optimize global scientific and clinical resources to further advance cellular therapies, including regenerative medicine with stem/progenitor cells as well as cellular immunotherapy including CAR-T, CAR-NK, TCR-T and others. to treat certain cancers |
BASIS OF PRESENTATION AND GOING
BASIS OF PRESENTATION AND GOING CONCERN | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION These . Certain . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
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 and nine months ended September 30, 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 stock-based compensation Fair Value of Financial Instruments and Fair Value Measurements The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data ● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information The carrying amounts reported in the condensed consolidated balance sheets for cash, accounts receivable, account receivable – related party, tenants receivable, security deposit, security deposit – related party, inventory, prepaid expenses and other current assets, accounts payable, accrued liabilities and other payables, accrued liabilities and other payables – related parties, deferred rental income, interest payable, Value Added Tax (“VAT”) and other taxes payable, tenants’ security deposit, and due to related party, approximate their fair market value based on the short-term maturity of these instruments. At September 30, 2018 and December 31, 2017, intangible assets were measured at fair value on a nonrecurring basis as shown in the following tables Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at September 30, 2018 Impairment Loss Patents and other technologies $ — $ — $ 1,337,582 $ 1,337,582 $ — Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2017 Impairment Loss Patents and other technologies $ — $ — $ 1,583,260 $ 1,583,260 $ 923,769 Goodwill — — — — 397,569 Total $ — $ — $ 1,583,260 $ 1,583,260 $ 1,321,338 In December 2017, the Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment as of December 31, 2017 and it calculated that the estimated undiscounted cash flows were less than the carrying amount of the intangible assets. Based on its analysis, the Company recognized an impairment loss of $1,321,338 for the year ended December 31, 2017, which reduced the value of intangible assets acquired to $1,583,260. The Company did not record any impairment charge for the three and nine months ended September 30, 2018. ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. 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 September 30, 2018 and December 31, 2017, cash balances in PRC are $1,654,815 and $1,327,009, respectively, are uninsured. At September 30, 2018 and December 31, 2017, cash balances in United States are $2,155,324 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 September 30, 2018 and December 31, 2017, the Company’s cash balances by geographic area were as follows: Country: September 30, 2018 December 31, 2017 United States $ 2,155,324 56.6 % $ 1,700,024 56.2 % China 1,654,815 43.4 % 1,327,009 43.8 % Total cash $ 3,810,139 100.0 % $ 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. 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 September 30, 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 September 30, 2018 and December 31, 2017. Inventory Inventory is stated at the lower of cost and net realizable value. 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 lower of cost or estimated net realizable value. The reserve is recorded based on estimates. The Company did not record any inventory reserve at September 30, 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 and consists of building and improvement. The Company depreciates real estate building and improvement on a straight-line basis over estimated useful life. Expenditures for ordinary repair and maintenance costs are charged to expense as incurred. Expenditure for improvements, renovations, and replacements of real estate asset is capitalized and depreciated over its estimated useful life if the expenditure qualifies as betterment. Real estate depreciation expense was $31,805 and $20,066 for the three months ended September 30, 2018 and 2017, respectively. Real estate depreciation expense was $95,416 and $53,009 for the nine months ended September 30, 2018 and 2017, respectively 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 and nine months ended September 30, 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. 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 September 30, 2018 and December 31, 2017, the unpaid acquisition consideration of $250,000 and $450,000, respectively, 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 September 30, 2018 and December 31, 2017, deferred rental income totaled $3,525 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 developed products. 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 developed products (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. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update Accounting Standards Update (“ASU”) (“ASU 2014-09”) establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard, which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard in 2018 using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Based on an evaluation of the impact ASU 2014-09 will have on the Company’s sources of revenue, the Company has concluded that ASU 2014-09 did not have a material impact on the process for, timing of, and presentation and disclosure of revenue recognition from customers Types of revenue: ● Rental revenue from leasing commercial property under operating leases with terms of generally three 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. ● Service fees under agreements to perform development services for hospitals and other customers. The Company does not perform contracts that are contingent upon successful results. ● Sales of developed products to hospitals and other customers. 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 and all other elements of revenue recognition have been satisfied. 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 written 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 and other customers is recognized when items are shipped to customers and titles are 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. Office Lease When a lease contains “rent holidays”, . Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in cost of sales. For the three months ended September 30, 2018 and 2017, the Company did not incur shipping and handling costs. For the nine months ended September 30, 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 incurred research and development expense in the amount of $1,384 and $1,647 related to the development of proprietary diagnostic and therapeutic products leveraging exosome technology and optimization of Exosome Isolation Systems in the three and nine months ended September 30, 2018. The Company did not incur any research and development costs during the three and nine months ended September 30, 2017. Advertising Costs All costs related to advertising are expensed as incurred. For the three and nine months ended September 30, 2018, advertising costs amounted to $150,548. The Company did not incur any advertising expenses during the three and nine months ended September 30, 2017. 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 includes inventory costs, materials and supplies costs, depreciation, internal labor and related benefits, other overhead costs and shipping and handling 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. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company’s 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 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 September 30, 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 September 30, 2018 and December 31, 2017. In December 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income the Company may have, the legislation affects the way the Company can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on the balance sheet. Given that current deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the balance sheet. However, when the Company becomes profitable, the Company will receive a reduced benefit from such deferred tax assets. 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, GenExosome, and Avactis, 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 September 30, 2018 and December 31, 2017 were translated at 6.8690 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 nine months ended September 30, 2018 and 2017 were 6.5197 RMB and 6.8071 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 nine months ended September 30, 2018 and 2017 consisted of net loss and unrealized (loss) gain 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 and warrants (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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net loss available to Avalon GloboCare Corp. common shareholders for basic and diluted net loss per share of common stock $ (2,344,670 ) $ (710,729 ) $ (5,120,643 ) $ (1,690,570 ) Weighted average common stock outstanding - basic and diluted 72,573,462 64,628,622 71,611,375 63,958,292 Net loss per common share attributable to Avalon GloboCare Corp. common shareholders - basic and diluted $ (0.03 ) $ (0.01 ) $ (0.07 ) $ (0.03 ) The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options 2,670,000 484,448 2,670,000 484,448 Warrants 578,891 — 578,891 — Potentially dilutive securities 3,248,891 484,448 3,248,891 484,448 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 September 30, 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, 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. 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 July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”, which provides new guidance regarding the measurement of inventory. The new guidance requires most inventory to be measured at the lower of cost or net realizable value. The standard defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard applies to companies other than those that measure inventory using last-in, first-out (“LIFO”) or the retail inventory method. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those reporting periods. Early application is permitted. Effective January 1, 2017, the Company adopted ASU No. 2015-11 and it had no material impact on the Company’s consolidated financial statements. In February 2016, t |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2018 | |
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 periods Three Months Ended Nine Months Ended September 30, 2017 September 30, 2017 Net revenues $ 317,450 $ 758,487 Net loss $ (724,801 ) $ (2,222,563 ) Net loss attributable to Avalon GloboCare Corp. common shareholders $ (719,172 ) $ (2,209,288 ) Net loss per share $ (0.01 ) $ (0.03 ) 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 periods presented and is not intended to be a projection of future results. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 5 – INVENTORY At September 30, 2018 and December 31, 2017, inventory consisted of the following: September 30, 2018 December 31, 2017 Raw material $ 25,566 $ 2,667 Work-in-process 1,162 — Finished goods 699 — 27,427 2,667 Less: reserve for obsolete inventory — — $ 27,427 $ 2,667 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS At September 30, 2018 and December 31, 2017, prepaid expenses and other current assets consisted of the following: September 30, 2018 December 31, 2017 Prepaid professional fees $ 199,177 $ 65,000 Prepaid insurance expense 89,884 — Prepaid dues and subscriptions 1,670 49,167 Other 73,924 35,546 $ 364,655 $ 149,713 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 – PROPERTY AND EQUIPMENT At September 30, 2018 and December 31, 2017, property and equipment consisted of the following: Useful life September 30, 2018 December 31, 2017 Laboratory equipment 5 Years $ 266,232 $ 3,685 Office equipment and furniture 3 – 10 Years 32,403 31,440 Leasehold improvement Shorter of useful life or lease term 24,480 24,551 323,115 59,676 Less: accumulated depreciation (51,589 ) (11,647 ) $ 271,526 $ 48,029 For the three months ended September 30, 2018 and 2017, depreciation expense of property and equipment amounted to $21,931 and $4,256, respectively, of which, $819 and $502 was included in real property operating expenses, $16,220 and $0 was included in costs of development services and sales of developed products, and $4,892 and $3,754 was included in other operating expenses, respectively. For the nine months ended September 30, 2018 and 2017, depreciation expense of property and equipment amounted to $42,509 and $5,469, respectively, of which, $2,457 and $502 was included in real property operating expenses, $25,852 and $0 was included in costs of development services and sales of developed products, and $14,200 and $4,967 was included in other operating expenses, respectively. |
INVESTMENT IN REAL ESTATE
INVESTMENT IN REAL ESTATE | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
INVESTMENT IN REAL ESTATE | NOTE 8 – INVESTMENT IN REAL ESTATE At September 30, 2018 and December 31, 2017, investment in real estate consisted of the following: Useful life September 30, 2018 December 31, 2017 Commercial real property building 39 Years $ 7,708,571 $ 7,708,571 Improvement 12 Years 392,571 — 8,101,142 7,708,571 Less: accumulated depreciation (180,230 ) (84,814 ) $ 7,920,912 $ 7,623,757 For the three months ended September 30, 2018 and 2017, depreciation expense of this commercial real property amounted to $31,805 and $20,066, which was included in real property operating expenses. For the nine months ended September 30, 2018 and 2017, depreciation expense of this commercial real property amounted to $95,416 and $53,009, which was included in real property operating expenses. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 9 – INTANGIBLE ASSETS At September 30, 2018 and December 31, 2017, intangible assets consisted of the following: Useful Life September 30, 2018 December 31, 2017 Patents and other technologies 5 Years $ 1,583,260 $ 2,593,478 Goodwill — 397,569 Less: accumulated amortization (245,678 ) (86,449 ) Less: impairment loss — (1,321,338 ) $ 1,337,582 $ 1,583,260 For the three months ended September 30, 2018 and 2017, amortization expense amounted to $81,892 and $0, respectively. For the nine months ended September 30, 2018 and 2017, amortization expense amounted to $245,678 and $0, respectively Amortization of intangible assets attributable to future periods is as follows: Twelve-month periods ending September 30: Amortization amount 2019 $ 327,571 2020 327,571 2021 327,571 2022 327,571 2023 27,298 $ 1,337,582 |
ACCRUED LIABILITIES AND OTHER P
ACCRUED LIABILITIES AND OTHER PAYABLES | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES AND OTHER PAYABLES | NOTE 10 – ACCRUED LIABILITIES AND OTHER PAYABLES At September 30, 2018 and December 31, 2017, accrued liabilities and other payables consisted of the following: September 30, 2018 December 31, 2017 Accrued professional fees $ 454,534 $ 82,913 Insurance payable 89,884 — Commercial real property building improvement payable 40,139 — Accrued dues and subscriptions 25,000 — Accrued payroll liability 9,118 6,767 Other 39,140 34,384 $ 657,815 $ 124,064 |
LOAN PAYABLE
LOAN PAYABLE | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
LOAN PAYABLE | NOTE 11 – 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. As of September 30, 2018, the outstanding principal balance of the loan and related accrued and unpaid interest for the loan was $1,000,000 and $50,137, respectively. |
VAT AND OTHER TAXES PAYABLE
VAT AND OTHER TAXES PAYABLE | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
VAT AND OTHER TAXES PAYABLE | NOTE 12 – VAT AND OTHER TAXES PAYABLE At September 30, 2018 and December 31, 2017, VAT and other taxes payable consisted of the following: September 30, 2018 December 31, 2017 VAT payable $ 3,391 $ 819 Other taxes payable 9,827 2,178 $ 13,218 $ 2,997 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13 – RELATED PARTY TRANSACTIONS Medical Related Consulting Services Revenue from Related Parties and Accounts Receivable – Related Party During the three and nine months ended September 30, 2018 and 2017, medical related consulting services revenue from related parties was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Medical related consulting services provided to: Beijing Daopei (1) $ 71,398 $ — $ 213,394 $ — Shanghai Daopei (2) — — — 66,286 Beijing Nanshan (3) — 2,166 — 154,663 $ 71,398 $ 2,166 $ 213,394 $ 220,949 (1) Beijing Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. (2) Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. (3) Beijing Nanshan is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. Accounts receivable – related party, net of allowance for doubtful accounts, at September 30, 2018 and December 31, 2017 amounted to $214,665 and $0, respectively, and no allowance for doubtful accounts is deemed to be required on accounts receivable – related party at September 30, 2018 and December 31, 2017. Security Deposit – Related Party In the third quarter of 2018, the Company signed a development agreement with a company whose chairman is Wenzhao Lu, the largest shareholder of the Company. In accordance with the development agreement, the Company was required to make a security deposit. At September 30, 2018, the security deposit – related party amounted to $291,163, which was refunded in full in October 2018 as the development agreement was cancelled in September 2018. Accrued Liabilities and Other Payables – Related Parties At September 30, 2018 and December 31, 2017, the Company owed David Jin, its shareholder, chief executive officer, president and board member, of $0 and $15,387, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying condensed consolidated balance sheets. At September 30, 2018 and December 31, 2017, the Company owed Yu Zhou, co-chief executive officer of GenExosome, of $2,684 and $24,540, respectively, for accrued payroll, travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying condensed consolidated balance sheets At September 30, 2018 and December 31, 2017, the Company owed Meng Li, its shareholder and chief operating officer, of $1,189 and $0, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying condensed consolidated balance sheets. Due to Related Party In connection with the acquisition discussed elsewhere in this report, the Company acquired Beijing GenExosome in cash payment of $450,000. 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 September 30, 2018 and December 31, 2017, the unpaid acquisition consideration of $250,000 and $450,000, respectively, was payable to Dr. Yu Zhou, co-chief executive officer and board member of GenExosome, and reflected as due to related party 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 largest 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 September 30, 2018 and 2017, the management fee related to the property management agreement amounted to $16,251 and $16,251, respectively. For the nine months ended September 30, 2018 and 2017, the management fee related to the property management agreement amounted to $48,753 and $27,085, respectively |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
EQUITY | NOTE 14 – 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 September 30, 2018 and December 31, 2017. There are 73,560,751 and 70,278,622 shares of its common stock issued as of September 30, 2018 and December 31, 2017, respectively. There are 73,040,751 and 70,278,622 shares of its common stock outstanding as of September 30, 2018 and December 31, 2017, respectively. 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 Common Shares Sold for Cash During the nine months ended September 30, 2018, the Company sold 3,107,000 and 939,450 shares of common stock at $1.75 and $2.25 per share, respectively, to investors pursuant to subscription agreements. The Company received net cash proceeds of $7,064,717, net of cash fee paid to an investment banking firm of $486,296. In connection with this private offering, the Company issued a total of 218,391 stock warrants to the placement agent for the transaction. Among these warrants, 151,235 warrants with a fixed exercise price of $1.62 per share, 5,960 warrants with a fixed exercise price of $1.85 per share, 36,750 warrants with a fixed exercise price of $1.90 per share, 24,446 warrants with a fixed exercise price of $2.24 per share. These warrants are exercisable at any time for a five-year period Common Shares Issued for Services During the nine months ended September 30, 2018, pursuant to consulting agreements, the Company issued an aggregate of 235,679 shares of common stock for consulting services rendered and to be rendered. These shares were valued at $634,950, the fair market values on the grant dates using the reported closing share prices on the dates of grant, and the Company recorded stock-based compensation expense of $529,965 and $591,715 for the three and nine months ended September 30, 2018 and reduced accrued liabilities of $10,000 and recorded prepaid expense of $33,235 as of September 30, 2018 which will be amortized over the rest of corresponding service periods 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 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”). 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 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 was extended to July 31, 2018. The $1 million BCC Repayment Obligation and related interest was paid in full in May 2018. On August 8, 2018, DOING and the March 2017 Accredited Investor sold the remaining 2,000,000 shares of common stock to a third party in consideration of $2,000,000. Therefore, the BCC Repayment Obligation was satisfied in full and the Company has no further obligation for DOING and the March 2017 Accredited Investor. Options The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at September 30, 2018: Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding at September 30, 2018 Range of Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at September 30, 2018 Weighted Average Exercise Price $ 0.50 2,000,000 8.36 $ 0.50 1,111,111 $ 0.50 1.49 60,000 3.58 1.49 60,000 1.49 1.00 50,000 4.09 1.00 40,000 1.00 1.00 180,000 2.09 1.00 180,000 1.00 2.50 120,000 4.25 2.50 90,000 2.50 1.00 180,000 2.58 1.00 90,000 1.00 2.30 20,000 4.68 2.30 10,000 2.30 2.30 20,000 4.76 2.30 10,000 2.30 2.80 20,000 4.83 2.80 10,000 2.80 2.80 20,000 4.87 2.80 6,667 2.80 $ 0.50–2.80 2,670,000 7.07 $ 0.75 1,607,778 $ 0.79 Stock options granted to employee and director Employee and director stock option activities for the nine months ended September 30, 2018 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 2,110,000 $ 0.54 Granted 180,000 2.49 Exercised — — Outstanding at September 30, 2018 2,290,000 0.69 Options exercisable at September 30, 2018 1,331,111 $ 0.74 Options expected to vest 958,889 $ 0.63 The fair values of these options granted to employee and director during the nine months ended September 30, 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 167.86 - 185.28% Risk-free interest rate 2.25% - 2.85% The aggregate fair value of the options granted to employee and director during the nine months ended September 30, 2018 was $446,911, of which, for the three and nine months ended September 30, 2018, $147,715 and $299,195, respectively, 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 September 30, 2018, the aggregate value of nonvested employee and director options was $1,293,818, which will be amortized as stock-based compensation expense as the options are vesting, over the remaining 1.33 years The aggregate intrinsic values of the employee and director stock options outstanding and the employee and director stock options exercisable at September 30, 2018 was $4,824,600 and $2,743,155, respectively A summary of the status of the Company’s nonvested employee and director stock options granted as of September 30, 2018 and changes during the nine months ended September 30, 2018 is presented below 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 180,000 2.49 446,911 Vested (650,000 ) (0.89 ) (1,029,172 ) Forfeited — — — Nonvested at September 30, 2018 958,889 $ 0.63 $ 1,293,818 Stock options granted to non-employee Non-employee stock option activities for the nine months ended September 30, 2018 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 180,000 $ 1.00 Granted 200,000 1.18 Exercised — — Outstanding at September 30, 2018 380,000 1.09 Options exercisable at September 30, 2018 276,667 $ 1.04 Options expected to vest 103,333 $ 1.23 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. Stock-based compensation expense associated with stock options granted to non-employee amounted to $221,040 and $604,082 for the three and nine months ended September 30, 2018, respectively. The fair values of these non-employee options vested in the nine months ended September 30, 2018 and nonvested non-employee options as of September 30, 2018 were estimated using the Black-Scholes option-pricing model with the following assumptions: Dividend rate 0 Terms (in years) 2.51 - 5.0 Volatility 160.53% - 188.29% Risk-free interest rate 2.29% - 2.94% As of September 30, 2018, the aggregate value of vested and nonvested non-employee options was $120,225, which will be amortized as stock-based compensation expense over the remaining 0.88 years. The aggregate intrinsic values of the non-employee stock options outstanding and the non-employee stock options exercisable at September 30, 2018 was $648,000 and $486,000, respectively A summary of the status of the Company’s nonvested non-employee stock options granted as of September 30, 2018 and changes during the nine months ended September 30, 2018 is presented below: Number of Options Weighted Average Exercise Price Fair Value at September 30, 2018 Nonvested at December 31, 2017 180,000 $ 1.00 Granted 200,000 1.18 Vested (276,667 ) (1.04 ) Forfeited — — Nonvested at September 30, 2018 103,333 $ 1.23 $ 251,063 Warrants In connection with equity raise, the Company issued a total of 578,891 stock warrants at various fixed exercise price to an investment banking firm. These warrants are exercisable at any time for a five-year period. The fair value of these warrants was debited to the account of additional paid-in capital and was fully offset by the corresponding credit to the additional paid-in capital, resulting in no change in net equity of the balance sheet Stock warrants activities during the nine months ended September 30, 2018 were as follows: Number of Warrants Weighted Average Exercise Price Outstanding at December 31, 2017 — $ — Issued 578,891 1.28 Exercised — — Outstanding and exercisable at September 30, 2018 578,891 $ 1.28 The aggregate intrinsic value of the warrants outstanding and exercisable at September 30, 2018 was $879,784 The f ollowing table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding and exercisable at September 30, 2018 Warrants Outstanding and Exercisable Range of Exercise Price Number Outstanding at September 30, 2018 Range of Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price $ 1.00 360,500 4.50 $ 1.00 1.62 151,235 4.55 1.62 1.85 5,960 4.57 1.85 1.90 36,750 4.59 1.90 2.24 24,446 4.65 2.24 $ 1.00 – 2.24 578,891 4.53 $ 1.28 |
STATUTORY RESERVE
STATUTORY RESERVE | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
STATUTORY RESERVE | NOTE 15 - 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. |
CONCENTRATIONS
CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 16 - 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 and nine months ended September 30, 2018 and 2017. Customer Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 A (Beijing Daopei, a related party) 17 % 0 % 18 % 0 % B (Beijing Nanshan, a related party) 0 % * 0 % 20 % C 19 % 27 % 20 % 18 % D 13 % 16 % 13 % 11 % E 10 % 13 % 11 % * *Less than 10% Two customers, whose outstanding receivable accounted for 10% or more of the Company’s total outstanding accounts receivable and accounts receivable – related party and tenants receivable at September 30, 2018, accounted for 80.3% of the Company’s total outstanding accounts receivable and accounts receivable – related party and tenants receivable at September 30, 2018. Two customers, whose outstanding receivable accounted for 10% or more of the Company’s total outstanding accounts receivable and tenants receivable at December 31, 2017, 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 and nine months ended September 30, 2018 and 2017. Two suppliers, whose outstanding payable accounted for 10% or more of the Company’s total outstanding accounts payable at September 30, 2018, accounted for 100% of the Company’s total outstanding accounts payable at September 30, 2018. One supplier accounted for 100% of the Company’s total outstanding accounts payable at December 31, 2017. Concentrations of Credit Risk At September 30, 2018 and December 31, 2017, cash balances in the PRC are $1,654,815 and $1,327,009, 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 September 30, 2018 and December 31, 2017, the Company’s cash balances in United States bank accounts had approximately $1,374,000 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 17 – SEGMENT INFORMATION For the three and nine months ended September 30, 2018, 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 other customers and sales of developed products to hospitals and other customers segment. For the three and nine months ended September 30, 2017, the Company operated in two reportable business segments - (1) the real property operating segment, and (2) 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 and nine months ended September 30, 2018 and 2017 was as follows Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Revenues Real property operating $ 272,444 $ 315,284 $ 847,939 $ 537,538 Medical related consulting services – related parties 71,398 2,166 213,394 220,949 Development services and sales of developed products 69,661 — 156,176 — 413,503 317,450 1,217,509 758,487 Depreciation and amortization Real property operating 32,624 20,568 97,873 53,511 Medical related consulting services 4,706 3,754 12,703 4,967 Development services and sales of developed products 98,298 — 273,027 — 135,628 24,322 383,603 58,478 Interest expense Real property operating 25,205 52,932 287,123 94,932 Medical related consulting services — — — — Development services and sales of developed products — — — — 25,205 52,932 287,123 94,932 Net income (loss) Real property operating 542 (119,782 ) (231,541 ) (121,016 ) Medical related consulting services (75,484 ) (116,230 ) (232,502 ) (278,019 ) Development services and sales of developed products (146,451 ) — (443,479 ) — Other (a) (2,181,858 ) (474,717 ) (4,390,513 ) (1,291,535 ) $ (2,403,251 ) $ (710,729 ) $ (5,298,035 ) $ (1,690,570 ) Identifiable long-lived tangible assets at September 30, 2018 and December 31, 2017 September 30, 2018 December 31, 2017 Real property operating $ 7,940,069 $ 7,645,371 Medical related consulting services 8,640 20,558 Development services and sales of developed products 243,729 5,857 $ 8,192,438 $ 7,671,786 Identifiable long-lived tangible assets at September 30, 2018 and December 31, 2017 September 30, 2018 December 31, 2017 United States $ 7,940,730 $ 7,646,270 China 251,708 25,516 $ 8,192,438 $ 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. |
NONCONTROLLING INTEREST
NONCONTROLLING INTEREST | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
NONCONTROLLING INTEREST | NOTE 18 – NONCONTROLLING INTEREST As of September 30, 2018, Dr. Yu Zhou, director and Co-Chief Executive Officer of GenExsome, 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 nine months ended September 30, 2018 Amount Noncontrolling interest at December 31, 2017 $ (585,394 ) Net loss attributable to noncontrolling interest (177,392 ) Foreign currency translation adjustment attributable to noncontrolling interest (172 ) Noncontrolling interest at September 30, 2018 $ (762,958 ) |
COMMITMENTS AND CONTINCENGIES
COMMITMENTS AND CONTINCENGIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINCENGIES | NOTE 19 – 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 September 30, 2018 and December 31, 2017, which have not been reflected in its condensed consolidated financial statements since the Company concluded that the likelihood is remote at this moment. 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 expired on March 14, 2018. Beijing GenExosome renewed the lease in fiscal 2018. Pursuant to the renewed lease, the annual rent is RMB 41,000 (approximately $6,000) and the renewed lease expires on March 14, 2019. During the three and nine months ended September 30, 2018, rent expense related to the operating lease amounted to approximately $1,500 and $4,700, respectively. Future minimum rental payment required under this operating lease is as follows: Twelve-month Period Ending September 30: Amount 2019 $ 2,736 GenExosome Office Lease In December 2017, GenExosome signed an agreement to lease its office space in Ohio, United States under operating lease. Pursuant to the executed lease, the monthly rent is $300. The term of the lease is one year commencing on January 1, 2018 and expires on December 31, 2018. During the three and nine months ended September 30, 2018, rent expense related to the operating lease amounted to $900 and $2,700, respectively. Future minimum rental payment required under this operating lease is as follows: Twelve-month Period Ending September 30: Amount 2019 $ 900 Operating Leases (continued) Avalon Shanghai Office Lease On January 19, 2017, Avalon Shanghai entered into a lease for office space in Beijing, China with a third party (the “Beijing Office Lease”). Pursuant to the Beijing Office Lease, the monthly rent is RMB 50,586 (approximately $7,000) with a required security deposit of RMB 164,764 (approximately $24,000). In addition, Avalon Shanghai needs to pay monthly maintenance fees of RMB 4,336 (approximately $600). The term of the Beijing Office Lease is 26 months commencing on January 1, 2017 and will expire on February 28, 2019 with two months of free rent in the months of December 2017 and February 2019. For the three months ended September 30, 2018 and 2017, rent expense and maintenance fees related to the Beijing Office Lease amounted to approximately $20,000 and $21,900, respectively. For the nine months ended September 30, 2018 and 2017, rent expense and maintenance fees related to the Beijing Office Lease amounted to approximately $69,000 and $64,400, respectively. Future minimum rental payment required under the Beijing Office Lease is as follows: Twelve-month Period Ending September 30: Amount 2019 $ 32,613 Insurance Premium Financing Agreement On July 18, 2018, the Company entered into a financing agreement, providing for the issuance of a loan in the principal amount of $108,528. The term of the loan is for a period of 10 months from the execution of the agreement. The annual interest rate for the loan is 6.9%. All of financed amount is used to pay for Directors & Officers Insurance premium. At September 30, 2018, the outstanding principal balance of the loan and related unpaid interest was $89,884 which was included in the accrued liabilities and other payables on the accompanying condensed consolidated balance sheets. Consulting Service Contract On August 1, 2018, the Company entered into a one-year consulting service agreement with a third party who has agreed to provide consulting service to the Company. The agreement expires on July 31, 2019. In accordance with this agreement, the Company pays 180,000 shares of common stock for the one-year service. As of September 30, 2018, the common shares related to this service contract was not issued. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
RESTRICTED NET ASSETS | NOTE 20 – 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 September 30, 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 – SUBSEQUENT EVENTS On October 23, 2018, Avactis Biosciences, Inc. (“Avactis”), a wholly-owned subsidiary of the Company, and Arbele Limited (“Arbele”) agreed to the establishment of AVAR BioTherapeutics (China) Co. Ltd. (“AVAR”), a Sino-foreign equity joint venture, pursuant to an Equity Joint Venture Agreement (the “AVAR Agreement”), which will be owned 60% by Avactis and 40% by Arbele. The purpose and business scope of the Joint Venture is to research, develop, produce, sell, distribute and generally commercialize CAR-T/CAR-NK/TCR-T/universal cellular immunotherapy in China. Avactis is required to contribute USD $10 million In addition, Avactis is responsible for: ● Contributing registered capital of RMB 5,000,000 (approximately $700,000) for working capital purposes as required by local regulation, which is not required to be contributed immediately and will be contributed subject to Avactis’ discretion; ● assist AVAR in setting up its business operations and obtaining all required permits and licenses from the Chinese government; ● assisting AVAR in recruiting, hiring and retaining personnel; ● providing AVAR with access to various hospital networks in China to assist in the testing and commercialization of the CAR-T/CAR-NK/TCR-T/universal cellular immunotherapy technology in China; ● assisting AVAR in managing the Good Manufacturing Practices (GMP) facility and clinic to be developed by AVAR; ● providing AVAR with advice pertaining to conducting clinicals in China; and ● within 6 days of signing the AVAR Agreement, Avactis is required to pay to Arbele $300,000 as a research and development fee with an additional two payments of $300,000 (for a total of $900,000) to be paid upon mutually agreed upon milestones. Arbele, in addition to the above described contribution, shall be responsible for the following: ● No later than November 1, 2018, enter into a License Agreement with AVAR; and ● provide AVAR with research and development expertise pertaining to clinical laboratory medicine when hired by AVAR. AVAR’s Board of Directors shall consist of three directors, of which two (2) directors shall be appointed by Avactis who shall initially be David Jin, M.D., Ph.D and one other director to be determined by Avactis and agreed to by Arbele. One director shall be appointed by Arbele who shall initially be John Luk, Dr. Med.Sc., EMBA. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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 and nine months ended September 30, 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 stock-based compensation |
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, account receivable – related party, tenants receivable, security deposit, security deposit – related party, inventory, prepaid expenses and other current assets, accounts payable, accrued liabilities and other payables, accrued liabilities and other payables – related parties, deferred rental income, interest payable, Value Added Tax (“VAT”) and other taxes payable, tenants’ security deposit, and due to related party, approximate their fair market value based on the short-term maturity of these instruments. At September 30, 2018 and December 31, 2017, intangible assets were measured at fair value on a nonrecurring basis as shown in the following tables Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at September 30, 2018 Impairment Loss Patents and other technologies $ — $ — $ 1,337,582 $ 1,337,582 $ — Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2017 Impairment Loss Patents and other technologies $ — $ — $ 1,583,260 $ 1,583,260 $ 923,769 Goodwill — — — — 397,569 Total $ — $ — $ 1,583,260 $ 1,583,260 $ 1,321,338 In December 2017, the Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment as of December 31, 2017 and it calculated that the estimated undiscounted cash flows were less than the carrying amount of the intangible assets. Based on its analysis, the Company recognized an impairment loss of $1,321,338 for the year ended December 31, 2017, which reduced the value of intangible assets acquired to $1,583,260. The Company did not record any impairment charge for the three and nine months ended September 30, 2018. ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. |
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 September 30, 2018 and December 31, 2017, cash balances in PRC are $1,654,815 and $1,327,009, respectively, are uninsured. At September 30, 2018 and December 31, 2017, cash balances in United States are $2,155,324 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 | 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 September 30, 2018 and December 31, 2017, the Company’s cash balances by geographic area were as follows: Country: September 30, 2018 December 31, 2017 United States $ 2,155,324 56.6 % $ 1,700,024 56.2 % China 1,654,815 43.4 % 1,327,009 43.8 % Total cash $ 3,810,139 100.0 % $ 3,027,033 100.0 % |
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. 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 September 30, 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 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 September 30, 2018 and December 31, 2017. |
Inventory | Inventory Inventory is stated at the lower of cost and net realizable value. 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 lower of cost or estimated net realizable value. The reserve is recorded based on estimates. The Company did not record any inventory reserve at September 30, 2018 and 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. |
Investment in real estate and depreciation | Investment in Real Estate and Depreciation Investment in real estate is carried at cost less accumulated depreciation and consists of building and improvement. The Company depreciates real estate building and improvement on a straight-line basis over estimated useful life. Expenditures for ordinary repair and maintenance costs are charged to expense as incurred. Expenditure for improvements, renovations, and replacements of real estate asset is capitalized and depreciated over its estimated useful life if the expenditure qualifies as betterment. Real estate depreciation expense was $31,805 and $20,066 for the three months ended September 30, 2018 and 2017, respectively. Real estate depreciation expense was $95,416 and $53,009 for the nine months ended September 30, 2018 and 2017, respectively |
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. |
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 and nine months ended September 30, 2018 and 2017. |
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. 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 September 30, 2018 and December 31, 2017, the unpaid acquisition consideration of $250,000 and $450,000, respectively, was recorded as due to related party on the accompanying condensed 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 September 30, 2018 and December 31, 2017, deferred rental income totaled $3,525 and $12,769, 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 developed products. 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 developed products (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. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update Accounting Standards Update (“ASU”) (“ASU 2014-09”) establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard, which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard in 2018 using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Based on an evaluation of the impact ASU 2014-09 will have on the Company’s sources of revenue, the Company has concluded that ASU 2014-09 did not have a material impact on the process for, timing of, and presentation and disclosure of revenue recognition from customers Types of revenue: ● Rental revenue from leasing commercial property under operating leases with terms of generally three 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. ● Service fees under agreements to perform development services for hospitals and other customers. The Company does not perform contracts that are contingent upon successful results. ● Sales of developed products to hospitals and other customers. 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 and all other elements of revenue recognition have been satisfied. 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 written 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 and other customers is recognized when items are shipped to customers and titles are 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. |
Office Lease | Office Lease When a lease contains “rent holidays”, . |
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 September 30, 2018 and 2017, the Company did not incur shipping and handling costs. For the nine months ended September 30, 2018 and 2017, shipping and handling costs amounted to $25 and $0, respectively. |
Research and development | Research and Development Expenditures for research and product development costs are expensed as incurred. The Company incurred research and development expense in the amount of $1,384 and $1,647 related to the development of proprietary diagnostic and therapeutic products leveraging exosome technology and optimization of Exosome Isolation Systems in the three and nine months ended September 30, 2018. The Company did not incur any research and development costs during the three and nine months ended September 30, 2017. |
Advertising and Marketing Costs | Advertising Costs All costs related to advertising are expensed as incurred. For the three and nine months ended September 30, 2018, advertising costs amounted to $150,548. The Company did not incur any advertising expenses during the three and nine months ended September 30, 2017. |
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. |
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. |
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 includes inventory costs, materials and supplies costs, depreciation, internal labor and related benefits, other overhead costs and shipping and handling costs incurred. |
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. The Company’s 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 September 30, 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 September 30, 2018 and December 31, 2017. In December 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income the Company may have, the legislation affects the way the Company can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on the balance sheet. Given that current deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the balance sheet. However, when the Company becomes profitable, the Company will receive a reduced benefit from such deferred tax assets. |
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, GenExosome, and Avactis, 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 September 30, 2018 and December 31, 2017 were translated at 6.8690 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 nine months ended September 30, 2018 and 2017 were 6.5197 RMB and 6.8071 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 nine months ended September 30, 2018 and 2017 consisted of net loss and unrealized (loss) gain 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 and warrants (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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net loss available to Avalon GloboCare Corp. common shareholders for basic and diluted net loss per share of common stock $ (2,344,670 ) $ (710,729 ) $ (5,120,643 ) $ (1,690,570 ) Weighted average common stock outstanding - basic and diluted 72,573,462 64,628,622 71,611,375 63,958,292 Net loss per common share attributable to Avalon GloboCare Corp. common shareholders - basic and diluted $ (0.03 ) $ (0.01 ) $ (0.07 ) $ (0.03 ) The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options 2,670,000 484,448 2,670,000 484,448 Warrants 578,891 — 578,891 — Potentially dilutive securities 3,248,891 484,448 3,248,891 484,448 |
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. |
Non-controlling Interest | Non-controlling Interest As of September 30, 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 | 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. |
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. |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”, which provides new guidance regarding the measurement of inventory. The new guidance requires most inventory to be measured at the lower of cost or net realizable value. The standard defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard applies to companies other than those that measure inventory using last-in, first-out (“LIFO”) or the retail inventory method. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those reporting periods. Early application is permitted. Effective January 1, 2017, the Company adopted ASU No. 2015-11 and it had no material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued 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. In May 2017, the FASB issued ASU No. 2017-09, “Modification Accounting for Share-Based Payment Arrangements”, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. Effective January 1, 2018, the Company adopted ASU No. 2017-09 and it had no material impact on the Company’s consolidated financial statements. On December 22, 2017 the SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the TCJA). SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but for which they are able to determine a reasonable estimate, it must record a provisional amount in the financial statements. Provisional treatment is proper in light of anticipated additional guidance from various taxing authorities, the SEC, the FASB, and even the Joint Committee on Taxation. If a company cannot determine a provisional amount to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has applied this guidance to its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220)—Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update was issued to address the income tax accounting treatment of the stranded tax effects within other comprehensive income due to the prohibition of backward tracing due to an income tax rate change that was initially recorded in other comprehensive income. This issue came about from the enactment of the Tax Cuts and Jobs Ac t on December 22, 2017, which changed the Company’s income tax rate from 35% to 21%. The ASU changed current accounting whereby an entity may elect to reclassify the stranded tax effect from accumulated other comprehensive income to retained earnings. The ASU is effective for periods beginning after December 15, 2018, although early adoption is permitted. The Company does not anticipate that the adoption of this ASU will have a material impact on its consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05 (“ASU 2018-05), Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. This standard amends ASC 740, Income Taxes, to provide guidance on accounting for tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) pursuant to Staff Accounting Bulletin No. 118, which allows companies to complete the accounting under ASC 740 within one-year measurement period from the Tax Act enactment date. This standard is effective upon issuance. The Company has decided to follow the guidance provided by ASU 2018-05 and will leave the one-year measurement period open to evaluate the impact of the Tax Act. 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 ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Fair Value, Assets Measured on Nonrecurring Basis | At September 30, 2018 and December 31, 2017, intangible assets were measured at fair value on a nonrecurring basis as shown in the following tables Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at September 30, 2018 Impairment Loss Patents and other technologies $ — $ — $ 1,337,582 $ 1,337,582 $ — 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 |
Schedule of cash balances by geographic area | At September 30, 2018 and December 31, 2017, the Company’s cash balances by geographic area were as follows: Country: September 30, 2018 December 31, 2017 United States $ 2,155,324 56.6 % $ 1,700,024 56.2 % China 1,654,815 43.4 % 1,327,009 43.8 % Total cash $ 3,810,139 100.0 % $ 3,027,033 100.0 % |
Schedule of reconciliation of basic and diluted net income (loss) per share | The following table presents a reconciliation of basic and diluted net loss per share: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net loss available to Avalon GloboCare Corp. common shareholders for basic and diluted net loss per share of common stock $ (2,344,670 ) $ (710,729 ) $ (5,120,643 ) $ (1,690,570 ) Weighted average common stock outstanding - basic and diluted 72,573,462 64,628,622 71,611,375 63,958,292 Net loss per common share attributable to Avalon GloboCare Corp. common shareholders - basic and diluted $ (0.03 ) $ (0.01 ) $ (0.07 ) $ (0.03 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options 2,670,000 484,448 2,670,000 484,448 Warrants 578,891 — 578,891 — Potentially dilutive securities 3,248,891 484,448 3,248,891 484,448 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
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 periods Three Months Ended Nine Months Ended September 30, 2017 September 30, 2017 Net revenues $ 317,450 $ 758,487 Net loss $ (724,801 ) $ (2,222,563 ) Net loss attributable to Avalon GloboCare Corp. common shareholders $ (719,172 ) $ (2,209,288 ) Net loss per share $ (0.01 ) $ (0.03 ) |
INVENTORY (Table)
INVENTORY (Table) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | At September 30, 2018 and December 31, 2017, inventory consisted of the following: September 30, 2018 December 31, 2017 Raw material $ 25,566 $ 2,667 Work-in-process 1,162 — Finished goods 699 — 27,427 2,667 Less: reserve for obsolete inventory — — $ 27,427 $ 2,667 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses and other current assets | At September 30, 2018 and December 31, 2017, prepaid expenses and other current assets consisted of the following: September 30, 2018 December 31, 2017 Prepaid professional fees $ 199,177 $ 65,000 Prepaid insurance expense 89,884 — Prepaid dues and subscriptions 1,670 49,167 Other 73,924 35,546 $ 364,655 $ 149,713 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | At September 30, 2018 and December 31, 2017, property and equipment consisted of the following: Useful life September 30, 2018 December 31, 2017 Laboratory equipment 5 Years $ 266,232 $ 3,685 Office equipment and furniture 3 – 10 Years 32,403 31,440 Leasehold improvement Shorter of useful life or lease term 24,480 24,551 323,115 59,676 Less: accumulated depreciation (51,589 ) (11,647 ) $ 271,526 $ 48,029 |
INVESTMENT IN REAL ESTATE (Tabl
INVESTMENT IN REAL ESTATE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Summary of investment in real estate | At September 30, 2018 and December 31, 2017, investment in real estate consisted of the following: Useful life September 30, 2018 December 31, 2017 Commercial real property building 39 Years $ 7,708,571 $ 7,708,571 Improvement 12 Years 392,571 — 8,101,142 7,708,571 Less: accumulated depreciation (180,230 ) (84,814 ) $ 7,920,912 $ 7,623,757 |
INTANGIBLE ASSETS (Table)
INTANGIBLE ASSETS (Table) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | At September 30, 2018 and December 31, 2017, intangible assets consisted of the following: Useful Life September 30, 2018 December 31, 2017 Patents and other technologies 5 Years $ 1,583,260 $ 2,593,478 Goodwill — 397,569 Less: accumulated amortization (245,678 ) (86,449 ) Less: impairment loss — (1,321,338 ) $ 1,337,582 $ 1,583,260 |
Schedule of Intangible Assets, Future Amortization Expense | Amortization of intangible assets attributable to future periods is as follows: Twelve-month periods ending September 30: Amortization amount 2019 $ 327,571 2020 327,571 2021 327,571 2022 327,571 2023 27,298 $ 1,337,582 |
ACCRUED LIABILITIES AND OTHER_2
ACCRUED LIABILITIES AND OTHER PAYABLES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities and other payables | At September 30, 2018 and December 31, 2017, accrued liabilities and other payables consisted of the following: September 30, 2018 December 31, 2017 Accrued professional fees $ 454,534 $ 82,913 Insurance payable 89,884 — Commercial real property building improvement payable 40,139 — Accrued dues and subscriptions 25,000 — Accrued payroll liability 9,118 6,767 Other 39,140 34,384 $ 657,815 $ 124,064 |
VAT AND OTHER TAXES PAYABLE (Ta
VAT AND OTHER TAXES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Schedule of VAT and other taxes payable | At September 30, 2018 and December 31, 2017, VAT and other taxes payable consisted of the following: September 30, 2018 December 31, 2017 VAT payable $ 3,391 $ 819 Other taxes payable 9,827 2,178 $ 13,218 $ 2,997 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Revenue from related parties | During the three and nine months ended September 30, 2018 and 2017, medical related consulting services revenue from related parties was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Medical related consulting services provided to: Beijing Daopei (1) $ 71,398 $ — $ 213,394 $ — Shanghai Daopei (2) — — — 66,286 Beijing Nanshan (3) — 2,166 — 154,663 $ 71,398 $ 2,166 $ 213,394 $ 220,949 (1) Beijing Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. (2) Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. (3) Beijing Nanshan is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of stock options outstanding | The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at September 30, 2018: Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding at September 30, 2018 Range of Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at September 30, 2018 Weighted Average Exercise Price $ 0.50 2,000,000 8.36 $ 0.50 1,111,111 $ 0.50 1.49 60,000 3.58 1.49 60,000 1.49 1.00 50,000 4.09 1.00 40,000 1.00 1.00 180,000 2.09 1.00 180,000 1.00 2.50 120,000 4.25 2.50 90,000 2.50 1.00 180,000 2.58 1.00 90,000 1.00 2.30 20,000 4.68 2.30 10,000 2.30 2.30 20,000 4.76 2.30 10,000 2.30 2.80 20,000 4.83 2.80 10,000 2.80 2.80 20,000 4.87 2.80 6,667 2.80 $ 0.50–2.80 2,670,000 7.07 $ 0.75 1,607,778 $ 0.79 |
Schedule of stock warrants activities | Stock warrants activities during the nine months ended September 30, 2018 were as follows: Number of Warrants Weighted Average Exercise Price Outstanding at December 31, 2017 — $ — Issued 578,891 1.28 Exercised — — Outstanding and exercisable at September 30, 2018 578,891 $ 1.28 |
Schedule of warrants outstanding and exercisable | The f ollowing table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding and exercisable at September 30, 2018 Warrants Outstanding and Exercisable Range of Exercise Price Number Outstanding at September 30, 2018 Range of Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price $ 1.00 360,500 4.50 $ 1.00 1.62 151,235 4.55 1.62 1.85 5,960 4.57 1.85 1.90 36,750 4.59 1.90 2.24 24,446 4.65 2.24 $ 1.00 – 2.24 578,891 4.53 $ 1.28 |
Employee Stock Option [Member] | |
Schedule of stock option activities | Employee and director stock option activities for the nine months ended September 30, 2018 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 2,110,000 $ 0.54 Granted 180,000 2.49 Exercised — — Outstanding at September 30, 2018 2,290,000 0.69 Options exercisable at September 30, 2018 1,331,111 $ 0.74 Options expected to vest 958,889 $ 0.63 |
Schedule of fair value of the options using the Black-Scholes option-pricing model | The fair values of these options granted to employee and director during the nine months ended September 30, 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 167.86 - 185.28% Risk-free interest rate 2.25% - 2.85% |
Schedule of non vested stock option activities | A summary of the status of the Company’s nonvested employee and director stock options granted as of September 30, 2018 and changes during the nine months ended September 30, 2018 is presented below 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 180,000 2.49 446,911 Vested (650,000 ) (0.89 ) (1,029,172 ) Forfeited — — — Nonvested at September 30, 2018 958,889 $ 0.63 $ 1,293,818 |
Non Employee Stock Option [Member] | |
Schedule of stock option activities | Non-employee stock option activities for the nine months ended September 30, 2018 were as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 180,000 $ 1.00 Granted 200,000 1.18 Exercised — — Outstanding at September 30, 2018 380,000 1.09 Options exercisable at September 30, 2018 276,667 $ 1.04 Options expected to vest 103,333 $ 1.23 |
Schedule of fair value of the options using the Black-Scholes option-pricing model | The fair values of these non-employee options vested in the nine months ended September 30, 2018 and nonvested non-employee options as of September 30, 2018 were estimated using the Black-Scholes option-pricing model with the following assumptions: Dividend rate 0 Terms (in years) 2.51 - 5.0 Volatility 160.53% - 188.29% Risk-free interest rate 2.29% - 2.94% |
Schedule of non vested stock option activities | A summary of the status of the Company’s nonvested non-employee stock options granted as of September 30, 2018 and changes during the nine months ended September 30, 2018 is presented below: Number of Options Weighted Average Exercise Price Fair Value at September 30, 2018 Nonvested at December 31, 2017 180,000 $ 1.00 Granted 200,000 1.18 Vested (276,667 ) (1.04 ) Forfeited — — Nonvested at September 30, 2018 103,333 $ 1.23 $ 251,063 |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 and nine months ended September 30, 2018 and 2017. Customer Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 A (Beijing Daopei, a related party) 17 % 0 % 18 % 0 % B (Beijing Nanshan, a related party) 0 % * 0 % 20 % C 19 % 27 % 20 % 18 % D 13 % 16 % 13 % 11 % E 10 % 13 % 11 % * *Less than 10% |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Information with respect to these reportable business segments for the three and nine months ended September 30, 2018 and 2017 was as follows Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Revenues Real property operating $ 272,444 $ 315,284 $ 847,939 $ 537,538 Medical related consulting services – related parties 71,398 2,166 213,394 220,949 Development services and sales of developed products 69,661 — 156,176 — 413,503 317,450 1,217,509 758,487 Depreciation and amortization Real property operating 32,624 20,568 97,873 53,511 Medical related consulting services 4,706 3,754 12,703 4,967 Development services and sales of developed products 98,298 — 273,027 — 135,628 24,322 383,603 58,478 Interest expense Real property operating 25,205 52,932 287,123 94,932 Medical related consulting services — — — — Development services and sales of developed products — — — — 25,205 52,932 287,123 94,932 Net income (loss) Real property operating 542 (119,782 ) (231,541 ) (121,016 ) Medical related consulting services (75,484 ) (116,230 ) (232,502 ) (278,019 ) Development services and sales of developed products (146,451 ) — (443,479 ) — Other (a) (2,181,858 ) (474,717 ) (4,390,513 ) (1,291,535 ) $ (2,403,251 ) $ (710,729 ) $ (5,298,035 ) $ (1,690,570 ) Identifiable long-lived tangible assets at September 30, 2018 and December 31, 2017 September 30, 2018 December 31, 2017 Real property operating $ 7,940,069 $ 7,645,371 Medical related consulting services 8,640 20,558 Development services and sales of developed products 243,729 5,857 $ 8,192,438 $ 7,671,786 Identifiable long-lived tangible assets at September 30, 2018 and December 31, 2017 September 30, 2018 December 31, 2017 United States $ 7,940,730 $ 7,646,270 China 251,708 25,516 $ 8,192,438 $ 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. |
NONCONTROLLING INTEREST (Table)
NONCONTROLLING INTEREST (Table) | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Summary of noncontrolling interest activities | The following is a summary of noncontrolling interest activities in the nine months ended September 30, 2018 Amount Noncontrolling interest at December 31, 2017 $ (585,394 ) Net loss attributable to noncontrolling interest (177,392 ) Foreign currency translation adjustment attributable to noncontrolling interest (172 ) Noncontrolling interest at September 30, 2018 $ (762,958 ) |
COMMITMENTS AND CONTINCENGIES (
COMMITMENTS AND CONTINCENGIES (Tables) | 9 Months Ended |
Sep. 30, 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 September 30: Amount 2019 $ 2,736 |
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 September 30: Amount 2019 $ 900 |
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 September 30: Amount 2019 $ 32,613 |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reverse split ratio | 1:4 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Patents and other technologies | $ 1,337,582 | $ 1,583,260 | |
Goodwill | |||
Total | 1,337,582 | 1,583,260 | |
Impairment loss | 0 | $ 0 | 1,321,338 |
Patents and other technologies | |||
Impairment loss | 923,769 | ||
Goodwill [Member] | |||
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 | $ 1,337,582 | 1,583,260 | |
Goodwill | |||
Total | $ 1,583,260 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Total cash | $ 3,810,139 | $ 3,027,033 |
Percentage of concentrations of credit risk | 100.00% | 100.00% |
United States [Member] | ||
Total cash | $ 2,155,324 | $ 1,700,024 |
Percentage of concentrations of credit risk | 56.60% | 56.20% |
China [Member] | ||
Total cash | $ 1,654,815 | $ 1,327,009 |
Percentage of concentrations of credit risk | 43.40% | 43.80% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Net loss available to Avalon GloboCare Corp. common shareholders for basic and diluted net loss per share of common stock | $ (2,344,670) | $ (710,729) | $ (5,120,643) | $ (1,690,570) |
Weighted average common stock outstanding - basic and diluted (in shares) | 72,573,462 | 64,628,622 | 71,611,375 | 63,958,292 |
Net loss per common share attributable to Avalon GloboCare Corp. common shareholders - basic and diluted (in dollars per share) | $ (0.03) | $ (0.01) | $ (0.07) | $ (0.03) |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Potentially dilutive securities | 3,248,891 | 484,448 | 3,248,891 | 484,448 |
Employee Stock Option [Member] | ||||
Potentially dilutive securities | 2,670,000 | 484,448 | 2,670,000 | 484,448 |
Warrant [Member] | ||||
Potentially dilutive securities | 578,891 | 578,891 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash | $ 3,810,139 | $ 3,810,139 | $ 3,027,033 | ||
Depreciation expense | 21,931 | $ 4,256 | $ 42,509 | $ 5,469 | |
Useful Life of patents and other technologies | 5 years | ||||
Impairment loss | $ 0 | 0 | (1,321,338) | ||
Intangible assets acquired | 1,583,260 | ||||
Due to related parties | 250,000 | 250,000 | 450,000 | ||
Deferred rental income | 3,525 | 3,525 | $ 12,769 | ||
Shipping and Handling Costs | 0 | 0 | 25 | 0 | |
Research and Development | 1,384 | 0 | 1,647 | 0 | |
Advertising and Marketing Costs | 150,548 | 0 | $ 150,548 | 0 | |
Reverse split ratio | 1:4 | ||||
Beijing GenExosome | Dr. Yu Zhou | |||||
Equity interests ownership percentage | 40.00% | ||||
Real property operating [Member] | |||||
Depreciation expense | 31,805 | $ 20,066 | $ 95,416 | $ 53,009 | |
PRC [Member] | |||||
Cash | 1,654,815 | 1,654,815 | $ 1,327,009 | ||
United States [Member] | |||||
Cash | $ 2,155,324 | $ 2,155,324 | $ 1,700,024 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Business Combinations [Abstract] | ||
Net revenues | $ 317,450 | $ 758,487 |
Net loss | (724,801) | (2,222,563) |
Net loss attributable to Avalon GloboCare Corp. common shareholders | $ (719,172) | $ (2,209,288) |
Net loss per share | $ (0.01) | $ (0.03) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 25,566 | $ 2,667 |
Work-in-process | 1,162 | |
Finished goods | 699 | |
Inventory, Gross | 27,427 | 2,667 |
Less: reserve for obsolete inventory | ||
Inventory net | $ 27,427 | $ 2,667 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid professional fees | $ 199,177 | $ 65,000 |
Prepaid insurance expense | 89,884 | |
Prepaid dues and subscriptions | 1,670 | 49,167 |
Other | 73,924 | 35,546 |
Total prepaid expenses and other | $ 364,655 | $ 149,713 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment, Gross | $ 323,115 | $ 59,676 |
Less: accumulated depreciation | (51,589) | (11,647) |
Property, Plant and Equipment, Net | 271,526 | 48,029 |
Laboratory equipment [Member] | ||
Property, Plant and Equipment, Gross | $ 266,232 | 3,685 |
Useful life | 5 years | |
Office Equipment and Furniture [Member] | ||
Property, Plant and Equipment, Gross | $ 32,403 | 31,440 |
Office Equipment and Furniture [Member] | Minimum [Member] | ||
Useful life | 3 years | |
Office Equipment and Furniture [Member] | Maximum [Member] | ||
Useful life | 10 years | |
Leasehold improvement [Member] | ||
Property, Plant and Equipment, Gross | $ 24,480 | $ 24,551 |
Useful lives | Shorter of useful life or lease term |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Depreciation expense | $ 21,931 | $ 4,256 | $ 42,509 | $ 5,469 |
Real Property Operating Expense [Member] | ||||
Depreciation expense | 819 | 502 | 2,457 | 502 |
Cost of Development services and sales of developed products[Member] | ||||
Depreciation expense | 16,220 | 0 | 25,852 | 0 |
Other Operating Expense [Member] | ||||
Depreciation expense | $ 4,892 | $ 3,754 | $ 14,200 | $ 4,967 |
INVESTMENT IN REAL ESTATE (Deta
INVESTMENT IN REAL ESTATE (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Investment in real estate, Gross | $ 8,101,142 | $ 7,708,571 |
Less: accumulated depreciation | (180,230) | (84,814) |
Investment in real estate, net | $ 7,920,912 | 7,623,757 |
Commercial Real Estate [Member] | ||
Useful life | 39 years | |
Investment in real estate, Gross | $ 7,708,571 | 7,708,571 |
Improvements [Member] | ||
Useful life | 12 years | |
Investment in real estate, Gross | $ 392,571 |
INVESTMENT IN REAL ESTATE (De_2
INVESTMENT IN REAL ESTATE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Real property operating [Member] | ||||
Depreciation expense | $ 31,805 | $ 20,066 | $ 95,416 | $ 53,009 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Useful Life of patents and other technologies | 5 years | |
Patents and other technologies | $ 1,583,260 | $ 2,593,478 |
Goodwill | 397,569 | |
Less: accumulated amortization | (245,678) | (86,449) |
Less: impairment loss | (1,321,338) | |
Intangible assets net | $ 1,337,582 | $ 1,583,260 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 327,571 |
2,020 | 327,571 |
2,021 | 327,571 |
2,022 | 327,571 |
2,023 | 27,298 |
Intangible Assets Net | $ 1,337,582 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 81,892 | $ 0 | $ 245,678 | $ 0 |
ACCRUED LIABILITIES AND OTHER_3
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued professional fees | $ 454,534 | $ 82,913 |
Insurance payable | 89,884 | |
Commercial real property building improvement payable | 40,139 | |
Accrued dues and subscriptions | 25,000 | |
Accrued payroll liability | 9,118 | 6,767 |
Other | 39,140 | 34,384 |
Total accounts payable and accrued liabilities | $ 657,815 | $ 124,064 |
LOAN PAYABLE (Details Narrative
LOAN PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | |||
Apr. 30, 2018 | Nov. 30, 2017 | Apr. 19, 2017 | Sep. 30, 2018 | |
Debt Disclosure [Abstract] | ||||
Loan principal amount | $ 2,100,000 | |||
Maturity date | Mar. 31, 2020 | |||
Term | 1 year | |||
Annual interest rate | 10.00% | |||
Repayment of loan | $ 500,000 | $ 600,000 | ||
Outstanding principal balance | $ 1,000,000 | |||
Accrued and unpaid interest | $ 50,137 |
VAT AND OTHER TAXES PAYABLE (De
VAT AND OTHER TAXES PAYABLE (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
VAT payable | $ 3,391 | $ 819 |
Other taxes payable | 9,827 | 2,178 |
VAT and other tax payable | $ 13,218 | $ 2,997 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Medical related consulting services | $ 71,398 | $ 2,166 | $ 213,394 | $ 220,949 | |
Beijing Daopei [Member] | |||||
Medical related consulting services | [1] | 71,398 | 213,394 | ||
Shanghai Daopei [Member] | |||||
Medical related consulting services | [2] | 66,286 | |||
Beijing Nanshan [Member] | |||||
Medical related consulting services | [3] | $ 2,166 | $ 154,663 | ||
[1] | Beijing Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. | ||||
[2] | Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. | ||||
[3] | Beijing Nanshan is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company. |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accounts receivable - related parties, net of allowance for doubtful accounts | $ 214,665 | $ 214,665 | $ 0 | ||
Allowance for doubtful accounts | 0 | 0 | 0 | ||
Accrued liabilities and other payables - related parties | 3,873 | 3,873 | 39,927 | ||
Due to related party | 250,000 | 250,000 | 450,000 | ||
Property management fee | 16,251 | $ 16,251 | $ 48,753 | $ 27,085 | |
Real property management agreement expire | May 4, 2019 | ||||
Security deposit - related party | 291,163 | $ 291,163 | |||
David Jin [Member] | |||||
Accrued liabilities and other payables - related parties | 0 | 0 | 15,387 | ||
Yu Zhou [Member] | |||||
Accrued liabilities and other payables - related parties | 2,684 | 2,684 | 24,540 | ||
Due to related party | 250,000 | 250,000 | 450,000 | ||
Meng Li [Member] | |||||
Accrued liabilities and other payables - related parties | $ 1,189 | $ 1,189 | $ 0 |
EQUITY (Details)
EQUITY (Details) - Option [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
0.50 | |
Number of options outstanding | shares | 2,000,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 8 years 4 months 9 days |
Weighted Average Exercise Price ($) | $ / shares | $ 0.50 |
Number options Exercisable | shares | 1,111,111 |
Weighted Average options Exercise Price | $ / shares | $ 0.50 |
1.49 | |
Number of options outstanding | shares | 60,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 3 years 6 months 29 days |
Weighted Average Exercise Price ($) | $ / shares | $ 1.49 |
Number options Exercisable | shares | 60,000 |
Weighted Average options Exercise Price | $ / shares | $ 1.49 |
1 | |
Number of options outstanding | shares | 50,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 1 month 2 days |
Weighted Average Exercise Price ($) | $ / shares | $ 1 |
Number options Exercisable | shares | 40,000 |
Weighted Average options Exercise Price | $ / shares | $ 1 |
1 | |
Number of options outstanding | shares | 180,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 2 years 1 month 2 days |
Weighted Average Exercise Price ($) | $ / shares | $ 1 |
Number options Exercisable | shares | 180,000 |
Weighted Average options Exercise Price | $ / shares | $ 1 |
2.50 | |
Number of options outstanding | shares | 120,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 2 months 30 days |
Weighted Average Exercise Price ($) | $ / shares | $ 2.5 |
Number options Exercisable | shares | 90,000 |
Weighted Average options Exercise Price | $ / shares | $ 2.5 |
1 | |
Number of options outstanding | shares | 180,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 2 years 6 months 29 days |
Weighted Average Exercise Price ($) | $ / shares | $ 1 |
Number options Exercisable | shares | 90,000 |
Weighted Average options Exercise Price | $ / shares | $ 1 |
2.30 | |
Number of options outstanding | shares | 20,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 8 months 5 days |
Weighted Average Exercise Price ($) | $ / shares | $ 2.3 |
Number options Exercisable | shares | 10,000 |
Weighted Average options Exercise Price | $ / shares | $ 2.3 |
2.30 | |
Number of options outstanding | shares | 20,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 3 days |
Weighted Average Exercise Price ($) | $ / shares | $ 2.3 |
Number options Exercisable | shares | 10,000 |
Weighted Average options Exercise Price | $ / shares | $ 2.3 |
2.80 | |
Number of options outstanding | shares | 20,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 29 days |
Weighted Average Exercise Price ($) | $ / shares | $ 2.8 |
Number options Exercisable | shares | 10,000 |
Weighted Average options Exercise Price | $ / shares | $ 2.8 |
2.80 | |
Number of options outstanding | shares | 20,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 4 years 10 months 14 days |
Weighted Average Exercise Price ($) | $ / shares | $ 2.8 |
Number options Exercisable | shares | 6,667 |
Weighted Average options Exercise Price | $ / shares | $ 2.8 |
0.50-2.80 | |
Number of options outstanding | shares | 2,670,000 |
Range of Weighted Average Remaining Contractual Life (Years) | 7 years 26 days |
Weighted Average Exercise Price ($) | $ / shares | $ 0.75 |
Number options Exercisable | shares | 1,607,778 |
Weighted Average options Exercise Price | $ / shares | $ 0.79 |
EQUITY (Details 1)
EQUITY (Details 1) - Employee Stock Option [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Balance at beginning | shares | 2,110,000 |
Granted | shares | 180,000 |
Exercised | shares | |
Balance at end | shares | 2,290,000 |
Option Exercisable at end | shares | 1,331,111 |
Options expected to vest | shares | 958,889 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Balance at beginning | $ / shares | $ 0.54 |
Granted | $ / shares | 2.49 |
Exercised | $ / shares | |
Balance at end | $ / shares | 0.69 |
Option Exercisable at end | $ / shares | 0.74 |
Options expected to vest | $ / shares | $ 0.63 |
EQUITY (Details 2)
EQUITY (Details 2) - Employee Stock Option [Member] | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model |
Dividend rate | 0.00% |
Terms (in years) | 5 years |
Minimum [Member] | |
Volatility | 167.86% |
Risk-free interest rate | 2.25% |
Maximum [Member] | |
Volatility | 185.28% |
Risk-free interest rate | 2.85% |
EQUITY (Details 3)
EQUITY (Details 3) - Employee Stock Option [Member] | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Nonvested at beginning | shares | 1,428,889 |
Granted | shares | 180,000 |
Vested | shares | (650,000) |
Forfeited | shares | |
Nonvested at end | shares | 958,889 |
Weighted Average Exercise Price | |
Nonvested at beginning | $ / shares | $ 0.51 |
Granted | $ / shares | 2.49 |
Vested | $ / shares | (0.89) |
Forfeited | $ / shares | |
Nonvested at end | $ / shares | $ 0.63 |
Grant Date Fair Value | |
Nonvested at beginning | $ | $ 1,876,079 |
Granted | $ | 446,911 |
Vested | $ | (1,029,172) |
Forfeited | $ | |
Nonvested at end | $ | $ 1,293,818 |
EQUITY (Details 4)
EQUITY (Details 4) - Non Employee Stock Option [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Balance at beginning | shares | 180,000 |
Granted | shares | 200,000 |
Exercised | shares | |
Balance at end | shares | 380,000 |
Option Exercisable at end | shares | 276,667 |
Options expected to vest | shares | 103,333 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Balance at beginning | $ / shares | $ 1 |
Granted | $ / shares | 1.18 |
Exercised | $ / shares | |
Balance at end | $ / shares | 1.09 |
Option Exercisable at end | $ / shares | 1.04 |
Options expected to vest | $ / shares | $ 1.23 |
EQUITY (Details 5)
EQUITY (Details 5) - Non Employee Stock Option [Member] | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model |
Dividend rate | 0.00% |
Minimum [Member] | |
Terms (in years) | 2 years 6 months 3 days |
Volatility | 160.53% |
Risk-free interest rate | 2.29% |
Maximum [Member] | |
Terms (in years) | 5 years |
Volatility | 188.29% |
Risk-free interest rate | 2.94% |
EQUITY (Details 6)
EQUITY (Details 6) - Non Employee Stock Option [Member] | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Nonvested at beginning | shares | 180,000 |
Granted | shares | 200,000 |
Vested | shares | (276,667) |
Forfeited | shares | |
Nonvested at end | shares | 103,333 |
Weighted Average Exercise Price | |
Nonvested at beginning | $ / shares | $ 1 |
Granted | $ / shares | 1.18 |
Vested | $ / shares | (1.04) |
Forfeited | $ / shares | |
Nonvested at end | $ / shares | $ 1.23 |
Grant Date Fair Value | |
Nonvested at end | $ | $ 251,063 |
EQUITY (Details 7)
EQUITY (Details 7) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Warrants | |
Balance at beginning | shares | |
Issued | shares | 578,891 |
Exercised | shares | |
Balance at end | shares | 578,891 |
Exercisable | shares | 578,891 |
Weighted Average Exercise Price | |
Balance at beginning | $ / shares | |
Issued | $ / shares | 1.28 |
Exercised | $ / shares | |
Balance at end | $ / shares | 1.28 |
Exercisable | $ / shares | $ 1.28 |
EQUITY (Details 8)
EQUITY (Details 8) - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Number of Warrants Outstanding | 578,891 | |
Number of Warrants Exerciseable | 578,891 | |
Weighted Average Exercise Price Warrants Outstanding | $ 1.28 | |
Weighted Average Exercise Price Warrants Exerciseable | $ 1.28 | |
Warrant [Member] | 1.00 | ||
Number of Warrants Outstanding | 360,500 | |
Number of Warrants Exerciseable | 360,500 | |
Weighted Average Remaining Contractual Life (Years) | 4 years 9 months | |
Weighted Average Exercise Price Warrants Outstanding | $ 1 | |
Weighted Average Exercise Price Warrants Exerciseable | $ 1 | |
Warrant [Member] | 1.62 | ||
Number of Warrants Outstanding | 151,235 | |
Number of Warrants Exerciseable | 151,235 | |
Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 22 days | |
Weighted Average Exercise Price Warrants Outstanding | $ 1.62 | |
Weighted Average Exercise Price Warrants Exerciseable | $ 1.62 | |
Warrant [Member] | 1.85 | ||
Number of Warrants Outstanding | 5,960 | |
Number of Warrants Exerciseable | 5,960 | |
Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 25 days | |
Weighted Average Exercise Price Warrants Outstanding | $ 1.85 | |
Weighted Average Exercise Price Warrants Exerciseable | $ 1.85 | |
Warrant [Member] | 1.90 | ||
Number of Warrants Outstanding | 36,750 | |
Number of Warrants Exerciseable | 36,750 | |
Weighted Average Remaining Contractual Life (Years) | 4 years 10 months 6 days | |
Weighted Average Exercise Price Warrants Outstanding | $ 1.9 | |
Weighted Average Exercise Price Warrants Exerciseable | $ 1.9 | |
Warrant [Member] | 2.24 | ||
Number of Warrants Outstanding | 24,446 | |
Number of Warrants Exerciseable | 24,446 | |
Weighted Average Remaining Contractual Life (Years) | 4 years 10 months 25 days | |
Weighted Average Exercise Price Warrants Outstanding | $ 2.24 | |
Weighted Average Exercise Price Warrants Exerciseable | $ 2.24 | |
Warrant [Member] | 1.00-2.24 | ||
Number of Warrants Outstanding | 578,891 | |
Number of Warrants Exerciseable | 578,891 | |
Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 11 days | |
Weighted Average Exercise Price Warrants Outstanding | $ 1.28 | |
Weighted Average Exercise Price Warrants Exerciseable | $ 1.28 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | Aug. 08, 2018 | Mar. 03, 2017 | May 31, 2018 | Mar. 27, 2018 | Jun. 30, 2017 | Apr. 19, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Preferred stock, authorised | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, authorised | 490,000,000 | 490,000,000 | 490,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, issued | 0 | 0 | 0 | ||||||||
Preferred stock, outstanding | 0 | 0 | 0 | ||||||||
Common stock, issued | 73,560,751 | 73,560,751 | 70,278,622 | ||||||||
Common stock, outstanding | 73,040,751 | 73,040,751 | 70,278,622 | ||||||||
Stock warrants issued | 578,891 | ||||||||||
Warrants exercise price | $ 1.28 | $ 1.28 | |||||||||
Common shares issued for services | $ 634,950 | ||||||||||
Stock-based compensation expense | 2,224,969 | $ 602,224 | |||||||||
Term | 1 year | ||||||||||
Aggregate intrinsic value of the warrants outstanding | $ 879,784 | 879,784 | |||||||||
Aggregate intrinsic value of the warrants exercisable | 879,784 | 879,784 | |||||||||
Employee Stock Option [Member] | |||||||||||
Aggregate fair value of options granted | 446,911 | ||||||||||
Compensation and related benefits | 147,715 | 299,195 | |||||||||
Aggregate value of nonvested options | 1,293,818 | $ 1,293,818 | |||||||||
Amortization of stock-based compensation expense | 1 year 3 months 29 days | ||||||||||
Intrinsic value of stock options outstanding | 4,824,600 | $ 4,824,600 | |||||||||
Intrinsic value of stock options exercisable | 2,743,155 | 2,743,155 | |||||||||
Non Employee Stock Option [Member] | |||||||||||
Compensation and related benefits | 221,040 | 604,082 | |||||||||
Aggregate value of nonvested options | 120,225 | $ 120,225 | |||||||||
Amortization of stock-based compensation expense | 10 months 17 days | ||||||||||
Intrinsic value of stock options outstanding | 648,000 | $ 648,000 | |||||||||
Intrinsic value of stock options exercisable | $ 486,000 | $ 486,000 | |||||||||
DOING Biomedical Technology Co., Ltd | |||||||||||
Related party repayment obligation | $ 1,000,000 | ||||||||||
Third party | |||||||||||
Common stock repurchased, Shares | 520,000 | ||||||||||
Common stock repurchased, Value | $ 522,500 | ||||||||||
Escrow agent | |||||||||||
Share repurchase cost | $ 2,500 | ||||||||||
Accredited investor | |||||||||||
Common stock issued, Shares | 2,000,000 | ||||||||||
Common stock issued, Value | $ 2,000,000 | ||||||||||
Subscription Agreement | Private Placement [Member] | |||||||||||
Stock warrants issued | 218,391 | ||||||||||
Subscription Agreement | Private Placement One [Member] | |||||||||||
Stock warrants issued | 151,235 | ||||||||||
Warrants exercise price | $ 1.62 | $ 1.62 | |||||||||
Subscription Agreement | Private Placement Two [Member] | |||||||||||
Stock warrants issued | 5,960 | ||||||||||
Warrants exercise price | $ 1.85 | 1.85 | |||||||||
Subscription Agreement | Private Placement Three [Member] | |||||||||||
Stock warrants issued | 36,750 | ||||||||||
Warrants exercise price | $ 1.90 | 1.90 | |||||||||
Subscription Agreement | Private Placement Four [Member] | |||||||||||
Stock warrants issued | 24,446 | ||||||||||
Warrants exercise price | $ 2.24 | $ 2.24 | |||||||||
Subscription Agreement | Investor | |||||||||||
Common shares sold for cash | $ 7,064,717 | ||||||||||
Common shares sold for cash (in shares) | 3,107,000 | ||||||||||
Warrants term | 5 years | 5 years | |||||||||
Share price | $ 1.75 | $ 1.75 | |||||||||
Subscription Agreement | Accredited investor | |||||||||||
Common stock issued, Shares | 3,000,000 | 2,000,000 | |||||||||
Common stock issued, Value | $ 3,000,000 | ||||||||||
Subscription Agreement | Accredited investor | Avalon (Shanghai) Healthcare Technology Co., Ltd. | |||||||||||
Annual interest | 20.00% | ||||||||||
Share price | $ 1.20 | ||||||||||
Term | 3 years | ||||||||||
Consulting agreements | Consulting companies [Member] | |||||||||||
Common shares issued for services | $ 634,950 | ||||||||||
Common shares issued for services (in shares) | 235,679 | ||||||||||
Stock-based compensation expense | $ 529,965 | $ 591,715 | |||||||||
Decrease in accrued liabilities | 10,000 | ||||||||||
Prepaid expense | $ 33,235 | $ 33,235 |
CONCENTRATION (Details)
CONCENTRATION (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |||
Customer | 100.00% | 100.00% | |||||
More Than 10% Revenues [Member] | A (Beijing Daopei, a related party) [Member] | |||||||
Customer | 17.00% | 0.00% | 18.00% | ||||
More Than 10% Revenues [Member] | B (Beijing Nanshan, a related party) [Member] | |||||||
Customer | 0.00% | [1] | 0.00% | 20.00% | |||
More Than 10% Revenues [Member] | C [Member] | |||||||
Customer | 19.00% | 27.00% | 20.00% | 18.00% | |||
More Than 10% Revenues [Member] | D [Member] | |||||||
Customer | 13.00% | 16.00% | 13.00% | 11.00% | |||
More Than 10% Revenues [Member] | E [Member] | |||||||
Customer | 10.00% | 13.00% | 11.00% | [1] | |||
[1] | Less than 10% |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - PRC [Member] - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Uninsured cash balances | $ 1,654,815 | $ 1,327,009 |
Cash balances in excess of FDI | $ 1,374,000 | $ 1,162,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Revenues | $ 413,503 | $ 317,450 | $ 1,217,509 | $ 758,487 | ||
Depreciation | 135,628 | 24,322 | 383,603 | 58,478 | ||
Interest expenses | 25,205 | 52,932 | 287,123 | 94,932 | ||
Net income (loss) | (2,403,251) | (710,729) | (5,298,035) | (1,690,570) | ||
Identifiable long-lived tangible assets | 8,192,438 | 8,192,438 | $ 7,671,786 | |||
Real property operating [Member] | ||||||
Revenues | 272,444 | 315,284 | 847,939 | 537,538 | ||
Depreciation | 32,624 | 20,568 | 97,873 | 53,511 | ||
Interest expenses | 25,205 | 52,932 | 287,123 | 94,932 | ||
Net income (loss) | 542 | (119,782) | (231,541) | (121,016) | ||
Identifiable long-lived tangible assets | 7,940,069 | 7,940,069 | 7,645,371 | |||
Medical related consulting services [Member] | ||||||
Revenues | 71,398 | 2,166 | 213,394 | 220,949 | ||
Depreciation | 4,706 | 3,754 | 12,703 | 4,967 | ||
Interest expenses | ||||||
Net income (loss) | (75,484) | (116,230) | (232,502) | (278,019) | ||
Identifiable long-lived tangible assets | 8,640 | 8,640 | 20,558 | |||
Development services and sales of developed products[Member] | ||||||
Revenues | 69,661 | 156,176 | ||||
Depreciation | 98,298 | 273,027 | ||||
Interest expenses | ||||||
Net income (loss) | (146,451) | (443,479) | ||||
Identifiable long-lived tangible assets | 243,729 | 243,729 | $ 5,857 | |||
Others [Member] | ||||||
Net income (loss) | [1] | $ (2,181,858) | $ (474,717) | $ (4,390,513) | $ (1,291,535) | |
[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 ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Identifiable long-lived tangible assets | $ 8,192,438 | $ 7,671,786 |
United States [Member] | ||
Identifiable long-lived tangible assets | 7,940,730 | 7,646,270 |
China [Member] | ||
Identifiable long-lived tangible assets | $ 251,708 | $ 25,516 |
NONCONTROLLING INTEREST (Detail
NONCONTROLLING INTEREST (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Noncontrolling Interest [Abstract] | |
Noncontrolling interest at Beginning | $ (585,394) |
Net loss attributable to noncontrolling interest | (177,392) |
Foreign currency translation adjustment attributable to noncontrolling interest | (172) |
Noncontrolling interest at end | $ (762,958) |
COMMITMENTS AND CONTINCENGIES_2
COMMITMENTS AND CONTINCENGIES (Details) | Sep. 30, 2018USD ($) |
Beijing GenExosome Office Lease [Member] | |
Twelve-month Period Ending September 30, 2019 | $ 2,736 |
GenExosome Office Lease [Member] | |
Twelve-month Period Ending September 30, 2019 | 900 |
Avalon Shanghai Office Lease [Member] | |
Twelve-month Period Ending September 30, 2019 | $ 32,613 |
COMMITMENTS AND CONTINCENGIES_3
COMMITMENTS AND CONTINCENGIES (Details Narrative) - USD ($) | Aug. 01, 2018 | Jul. 18, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Severance payments | $ 528,900 | $ 528,900 | |||||
Beijing GenExosome Office Lease [Member] | |||||||
Expiration period | Mar. 14, 2019 | ||||||
Lease, annual rent | $ 6,000 | ||||||
Rent expense | $ 1,500 | $ 4,700 | |||||
GenExosome Office Lease [Member] | |||||||
Expiration period | Dec. 31, 2018 | ||||||
Rent expense | 900 | $ 2,700 | |||||
Beijing Office Lease [Member] | |||||||
Expiration period | Feb. 28, 2019 | ||||||
Rent expense | 20,000 | $ 21,900 | $ 69,000 | $ 64,400 | |||
Insurance Premium Financing Agreement [Member] | |||||||
Principal amount | $ 108,528 | ||||||
Accrued Fees | $ 89,884 | $ 89,884 | |||||
Expiration period | May 17, 2019 | ||||||
Consulting Service Contract [Member] | |||||||
Expiration period | Jul. 31, 2019 | ||||||
Number of shares to be issued | 180,000 |
RESTRICTED NET ASSETS (Details
RESTRICTED NET ASSETS (Details Narrative) | Sep. 30, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
Net assets | 25.00% | 25.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 23, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Research and development | $ 1,384 | $ 0 | $ 1,647 | $ 0 | |
Subsequent Event [Member] | Arbele [Member] | |||||
Ownership Percentage | 40.00% | ||||
Contribution | $ 6,660,000 | ||||
Working capital | $ 700,000 | ||||
Subsequent Event [Member] | Avactis [Member] | |||||
Ownership Percentage | 60.00% | ||||
Contribution | $ 10,000,000 | ||||
Research and development | 300,000 | ||||
Other payments | 600,000 | ||||
Total payment | $ 900,000 |