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Avalon GloboCare Provides Third Quarter 2018 Business Update; Reports 30% Increase in Revenues

FREEHOLD, N.J., Nov. 13, 2018 (GLOBE NEWSWIRE) -- Avalon GloboCare Corp. (NASDAQ: AVCO), a leading global developer of cell-based technologies, today announced financial results and provided a business update for the third quarter ended September 30, 2018.

Third Quarter 2018 Highlights:

  • Revenues increased 30% to $413,503 for the third quarter ended September 30, 2018;
  • Cash at September 30, 2018 was $3.8 million;
  • Total assets increased to approximately $15.0 million while total liabilities decreased to approximately $2.2 million;
  • Formed a new wholly owned U.S. subsidiary, Avactis Biosciences, Inc., 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;
  • Appointed prominent Life Science M&A attorney Steven Sanders to the Board of Directors;
  • Formed a strategic partnership with Weill Cornell’s cGMP cellular therapy facility and laboratory for advanced cellular engineering to co-develop technologies and bio-production of CAR-T therapy;
  • Appointed former Medical Director at M.D. Anderson Cancer Center, Dr. James L. Gajewski, to head scientific and clinical advisory board;
  • Commenced operation of Epicon Biotech Co. Ltd., a joint venture with Jiangsu Unicorn Biological Technology Co. Ltd., to establish a provincial network of translational cellular therapies and bio-banking programs.

David Jin, M.D., Ph.D., CEO and President of Avalon GloboCare Corp., commented, “This has been a very busy quarter, as we continue to advance our cell-based therapies and regenerative medicine platform. In July, we formed a new wholly owned U.S. subsidiary, Avactis Biosciences, Inc., which will be taking on specific roles in CAR-T bio-manufacturing, standardization, and bio-banking for the LuDaopei Hospital network and other affiliated hospitals. Our proprietary, breakthrough technologies have the potential to revolutionize the manufacturing and therapeutic options for cancer patients, particularly in hematologic malignancies (such as B-ALL and non-Hodgkin Lymphoma). Our plan is to establish a unique, full-suite, integrated system for CAR-T bio-manufacturing, standardization, international multi-centered clinical studies, and intelligent bio-banking. In addition, we have formed a strategic partnership with Weill Cornell’s cGMP cellular therapy facility and laboratory for advanced cellular engineering. This strategic partnership will synergize Weill Cornell’s world-class cGMP cellular therapy facility and our immense clinical resources at the LuDaopei hospital network to accelerate innovative CAR-T technology development, standardization in bio-manufacturing process, as well as knowledge exchange in CAR-T and other cellular therapies.”

“During the quarter, we commenced operation of Epicon Biotech Co. Ltd., a joint venture with Jiangsu Unicorn Biological Technology Co. Ltd., to establish the world’s largest aqueous humor derived exosome bio-bank to advance the next-generation of diagnosis and therapeutics for ophthalmologic diseases. Epicon occupies a 16,000 square foot, state-of-the-art Good Manufacturing Practice (GMP) laboratory space for processing, biobanking and preparation of clinical-grade products for cellular therapy.  Epicon plays an essential role in facilitating standardized GMP laboratory platform for our subsidiaries- GenExosome Technologies and Avactis Biosciences.   This state-of-the-art platform serves well to accelerate our international programs in exosome technology, cellular therapeutics and bio-banking.”

“Finally, we are very pleased to have successfully uplisted to the NASDAQ Capital Markets last week. Listing on NASDAQ provides us greater exposure within the investment community as we execute on key upcoming milestones. Towards this end we appointed two high-profile independent board members, which reinforces our commitment to the highest levels of corporate governance.  We also appointed Dr. James Gajewski to head our Scientific and Clinical Advisory Board. Mr. Gajewski will aid our mission of accelerating translational research, clinical development, and commercialization of cellular technologies and therapeutics,” concluded Dr. Jin.

Revenues for the third quarter ended September 30, 2018 were $413,503 versus $317,450 for the third quarter ended September 30, 2017. The increase in revenues was due to development services and sales of developed products, and medical related consulting services. Operating loss for the third quarter ended September 30, 2018 was $2.4 million versus operating loss of $0.7 million for third quarter ended September 30, 2017, which reflects increased SG&A expenses to support the anticipated growth, as well as an increase in public company expenses in advance of the planned listing on a national exchange. Net loss attributable to Avalon GloboCare Corp. common shareholders for the third quarter ended September 30, 2018 was $2.3 million or ($0.03) earnings per share, versus net loss attributable to Avalon GloboCare Corp. common shareholders of $0.7 million or ($0.01) earnings per share for the third quarter ended September 30, 2017.

About Avalon GloboCare Corp.

Avalon GloboCare Corp. (NASDAQ: AVCO) is a global intelligent biotech developer and healthcare service provider dedicated to promoting and empowering high impact, transformative cell-based /technologies and their clinical applications, as well as healthcare facility management through its core platforms, namely "Avalon Cell" and "Avalon Rehab." In addition, Avalon provides strategic advisory and outsourcing services to facilitate and enhance their clients' growth, development, as well as competitiveness in both domestic and global healthcare markets. Avalon also engages in the management of stem cell banks and specialty clinical laboratories. Through its U.S. subsidiaries, namely GenExosome Technologies Inc. and Avactis Biosciences Inc., Avalon will further establish our leading roles in the fields of CAR-T therapy, liquid biopsy, precision medicine and regenerative medicine.

Forward-Looking Statements
Certain statements contained in this press release may constitute "forward-looking statements." Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors as disclosed in our filings with the Securities and Exchange Commission located at their website (http://www.sec.gov). In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic conditions, and governmental and public policy changes. The forward-looking statements included in this press release represent the Company's views as of the date of this press release and these views could change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of the press release.

Contact Information:
Avalon GloboCare Corp.
4400 Route 9, Suite 3100
Freehold, NJ 07728
PR@Avalon-GloboCare.comhttp://at.marketwire.com/accesstracking/AccessTrackingLogServlet?PrId=1308001&sourceType=1

Investor Relations:
Crescendo Communications, LLC
Tel: (212) 671-1020
avco@crescendo-ir.com
                                                                           


AVALON GLOBOCARE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

  As of 
  September 30, 2018  December 31, 2017 
  (Unaudited)    
ASSETS      
       
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    
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 
         
LIABILITIES AND EQUITY        
         
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 party  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 
         
Commitments and Contingencies - (Note 19)        
         
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 
         


AVALON GLOBOCARE CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

  For the
Three
Months
Ended
September
30, 2018
  For the
Three
Months
Ended
September
30, 2017
  For the
Nine
Months
Ended
September
30, 2018
  For the
Nine
Months
Ended
September
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 expenses     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)
OTHER COMPREHENSIVE (LOSS) INCOME                
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 
                 


AVALON GLOBOCARE CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

  For the Nine
Months
Ended
September
30, 2018
  For the Nine
Months
Ended 
September
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 expense  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 for loan  (500,000)   
Proceeds received from related parties’ advance     210,000 
Repayment for 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 equty 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 
         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:        
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  $ 
         

 

Tuesday, November 13, 2018 - 09:05