Avalon GloboCare Corp. Segments Disclosure
NOTE 20 – SEGMENT INFORMATION
The segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the businesses internally. The management reporting structure is composed of two strategic business units, mainly organized by services, led by the Company’s President and Chief Executive Officer, who is its Chief Operating Decision Maker. Using the accounting guidance on segment reporting, the Company determined that its two operating segments are aligned with its two reportable segments corresponding to its strategic business units.
On February 9, 2023, the Company purchased 40% of Lab Services MSO. Commencing from the purchase date, February 9, 2023, the Company was active in the management of Lab Services MSO. During the years ended December 31, 2024 and 2023, the Company operated in two reportable business segments: (1) the real property operating segment, and (2) laboratory testing services segment (which commenced with the purchase date, February 9, 2023) since Lab Services MSO’s operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. The Company regularly reviews the operating results and performance of Lab Services MSO, which is the Company’s equity method investee. See Note 22—Subsequent Events—Redemption Agreement.
The accounting policies for the segments are the same as those described in Note 3. Our reportable segments are aligned principally around the differences in services. Real property operating income is calculated by subtracting real property operating expenses from real property rental revenue; loss from equity method investment – Lab Services MSO is calculated by subtracting amortization of intangible assets acquired from acquisition and impairment of goodwill acquired from acquisition and distribution of earnings from equity investment from the Company’s share of Lab Services MSO’s net income. The assets and certain expenses related to corporate activities are not allocated to the segments.
Information with respect to these reportable business segments for the years ended December 31, 2024 and 2023 was as follows:
| Year Ended December 31, 2024 | ||||||||||||||||
| Real Property Operations | Lab Services MSO | Corporate / Other | Total | |||||||||||||
| Real property rental revenue | $ | 1,333,403 | $ | $ | $ | 1,333,403 | ||||||||||
| Real property operating expenses | (1,065,574 | ) | (1,065,574 | ) | ||||||||||||
| Real property operating income | 267,829 | 267,829 | ||||||||||||||
| Loss from equity method investment - Lab Services MSO | (846,588 | ) | (846,588 | ) | ||||||||||||
| Other operating expenses | (354,311 | ) | (3,994,662 | ) | (4,348,973 | ) | ||||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense | (777,228 | ) | (1,659,745 | ) | (2,436,973 | ) | ||||||||||
| Other expense | (80 | ) | (538,609 | ) | (538,689 | ) | ||||||||||
| Net loss | $ | (863,790 | ) | $ | (846,588 | ) | $ | (6,193,016 | ) | $ | (7,903,394 | ) | ||||
| Year Ended December 31, 2023 | ||||||||||||||||
| Real Property Operations | Lab Services MSO | Corporate / Other | Total | |||||||||||||
| Real property rental revenue | $ | 1,255,681 | $ | $ | $ | 1,255,681 | ||||||||||
| Real property operating expenses | (1,017,493 | ) | (1,017,493 | ) | ||||||||||||
| Real property operating income | 238,188 | 238,188 | ||||||||||||||
| Loss from equity method investment - Lab Services MSO | (8,571,647 | ) | (8,571,647 | ) | ||||||||||||
| Other operating expenses | (347,356 | ) | (7,072,868 | ) | (7,420,224 | ) | ||||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense | (918,885 | ) | (432,617 | ) | (1,351,502 | ) | ||||||||||
| Other income | 15 | 398,160 | 398,175 | |||||||||||||
| Net loss | $ | (1,028,038 | ) | $ | (8,571,647 | ) | $ | (7,107,325 | ) | $ | (16,707,010 | ) | ||||
| Identifiable long-lived tangible assets at December 31, 2024 and 2023 | December 31, 2024 | December 31, 2023 | ||||||
| Real property operations | $ | 7,034,335 | $ | 7,211,641 | ||||
| Corporate/Other | 1,298 | 17,846 | ||||||
| Total | $ | 7,035,633 | $ | 7,229,487 | ||||
| Identifiable long-lived tangible assets at December 31, 2024 and 2023 | December 31, 2024 | December 31, 2023 | ||||||
| United States | $ | 7,034,335 | $ | 7,227,533 | ||||
| China | 1,298 | 1,954 | ||||||
| Total | $ | 7,035,633 | $ | 7,229,487 | ||||
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.