Company: AWX
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001437749-25-015162
Chunk: 20

Company: AVALON HOLDINGS CORP
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 1
Chunk 20
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 to accredited investors by selling membership units through private placement offerings. The monies received from these offerings, along with internally contributed capital, are used to purchase medical spa equipment and construct the facilities necessary for operation. Avalon operates and manages all decisions regarding the medical spa operations for a percentage of the gross revenues.

In 2021, Avalon made a capital contribution totaling $359,000, which included cash and certain equipment, in exchange for membership units of Avalon Med Spa, LLC. Through a private placement offering for the purchase of membership units, Avalon Med Spa, LLC raised $358,000from accredited investors in August 2021. In March 2022, Avalon and accredited investors made additional capital contributions of $143,000and $142,000, respectively. An outside director of Avalon, who qualified as an accredited investor, invested less than10% of the total investment in Avalon Med Spa, LLC. Avalon is the majority owner of Avalon Med Spa, LLC owning50.1% of the company at both March 31, 2025 and December 31, 2024.

In accordance with ASC 810-10 and related amendment, Avalon Med Spa, LLC is a VIE, and the financial statements of Avalon Med Spa, LLC are included in Avalon’s consolidated financial statements. ASC 810-10 requires noncontrolling interests to be reported as a separate component of equity. The amount of net loss attributable to the noncontrolling interest is recorded in “net loss attributable to noncontrolling interest” in our Condensed Consolidated Statements of Operations. Avalon’s net loss attributable to the noncontrolling interest in Avalon Med Spa, LLC was $0.1million during each of the three months ending March 31, 2025 and 2024, respectively.

Avalon Dermatology, LLC

In March 2024, Avalon created a new Ohio limited liability company, Avalon Dermatology, LLC. Avalon Dermatology, LLC provides dermatology services provided by a board licensed dermatologist. Avalon will manage all decisions regarding the dermatology operation for a percentage of gross revenues. An outside director of Avalon, who qualified as an accredited investor maintains49.9% of the total ownership in Avalon Dermatology, LLC. Avalon is the majority owner of Avalon Dermatology, LLC owning50.1% of the company. Avalon made capital contributions of approximately $0.2million, which included building improvements and the purchases