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Property and Equipment, and Prepament for Asset Acquisition
 12 Months Ended
Dec. 31, 2024
Property and Equipment, and Prepament for Asset Acquisition [Abstract]  
PROPERTY AND EQUIPMENT, AND PREPAMENT FOR ASSET ACQUISITION

5. PROPERTY AND EQUIPMENT, AND PREPAMENT FOR ASSET ACQUISITION

 

Property and Equipment

 

The Company has offices and labs located in Taiwan, and a GMP manufacturing facility in Fremont, CA. Property and equipment as of December 31, 2024 and 2023 are summarized as follows:

 

   December 31,
2024		   December 31,
2023		 
Land  $338,966   $363,416 
Buildings and leasehold improvements   2,219,244    2,227,431 
Machinery and equipment   1,131,169    1,138,675 
Office equipment   163,448    174,797 
    3,852,827    3,904,319 
Less: accumulated depreciation   (3,341,739)   (3,335,041)
Property and equipment, net  $511,088   $569,278 

Depreciation expenses were $28,627 and $28,531 for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, Land with book value amounted to approximately $338,966 and $363,416, respectively, were pledged for obtaining bank loan (see Notes 9 Bank loans).

 

Prepayment for asset acquisition

 

Prepayment for asset acquisition consists of the properties in Chengdu, China. The Company entered into a cooperation agreement on August 14, 2023, with Zhong Hui Lian He Ji Tuan, Ltd. (the “Zhonghui”). Pursuant thereto, the Company will acquire 20% of the ownership of certain property and a parcel of the land, with a view to jointly develop the property into a healthcare center for senior living, long-term care, and medical care in the areas of ABVC’s special interests, such as Ophthalmology, Oncology, and Central Nervous Systems. The plan is to establish a base for the China market and global development of these interests.

 

The valuation of such property is $37 million; based on the Company’s 20% ownership, the Company would acquire the value of $7,400,000. In exchange, the Company issued to Zhonghui an aggregate of 370,000 shares (the “Shares”) of common stock, at a per share price of $20.0. The Shares are subject to a lock-up period of one year following the closing date of the transaction. In addition, the parties agreed that, after one year following the closing of the transaction, if the market value of the Shares or the value of the property increases or decreases, the parties will negotiate in good faith to make reasonable adjustments. The Company’s ownership rights to the property and the associated land parcel, or a suitable replacement property, are safeguarded under the terms of the cooperation agreement, which is legally binding and enforceable.

 

As discussed in Note 2, the Company incorrectly applied ASC 845 instead of ASC 718, resulting in an adjustment of the reported value to from $7,400,000 to $691,900, and reclassification from Construction-in-Progress to Prepayment for Asset Acquisition.

 

The construction-in-progress property is planned to finish before the end of 2025.