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Avalon GloboCare Corp., a biotechnology company specializing in biological products with a market capitalization of $4.49 million, has entered into a significant financial agreement with an investor named York Sun Investment Holding Limited.
According to InvestingPro data, the company faces financial challenges with a weak overall health score and negative EBITDA of $13.25 million in the last twelve months. The agreement, detailed in an 8-K filing with the Securities and Exchange Commission, involves the sale of Series C Convertible Preferred Stock valued at $7 million.
On Monday, December 19, 2024, Avalon GloboCare Corp. and York Sun Investment Holding Limited signed a securities purchase agreement. Under this agreement, Avalon GloboCare will issue and sell up to 7,000 shares of Series C Convertible Preferred Stock at $1,000 per share, totaling a purchase price of $7 million.
The first transaction of this agreement was completed on Friday, December 24, 2024, with York Sun Investment Holding Limited acquiring 3,500 shares for $3.5 million. The remaining shares are expected to be purchased within 120 days of the initial agreement, subject to customary closing conditions.
The timing of this capital raise is crucial, as InvestingPro analysis shows the company's current ratio stands at 0.11, indicating significant liquidity challenges. Subscribers to InvestingPro can access 8 additional key financial insights about Avalon GloboCare's financial position.
The Series C Convertible Preferred Stock can be converted into common stock at a rate of $2.41 per share. However, this conversion is contingent upon two conditions: shareholder approval as required by Nasdaq Stock Market rules and the passage of one year from the first issuance date of the Series C Convertible Preferred Stock.
Additionally, the investor has secured a right of first refusal on future issuances of convertible preferred stock by Avalon GloboCare, with certain exclusions. They also have the right to appoint or replace one member of Avalon's board of directors, in accordance with Nasdaq regulations.
The securities sold in this agreement have not been registered under the Securities Act of 1933 and were offered in reliance on the exemption provided by Section 4(a)(2) of the Act, which allows for sales to accredited investors without registration.
The funds from this transaction are anticipated to provide Avalon GloboCare with additional capital for its operations, particularly important given the company's negative revenue of $8.32 million in the last twelve months.
The company, based in Freehold, New Jersey, is known for its work in the field of biological products, excluding diagnostic substances. Despite recent challenges, the stock has shown strong momentum, with positive returns over both one-month and three-month periods, according to InvestingPro data.
This news is based on information contained in a press release statement and the related SEC filing by Avalon GloboCare Corp.
In other recent news, Avalon GloboCare Corp. has regained compliance with Nasdaq's minimum bid price requirement. This development follows the company's execution of a 1-for-15 reverse stock split and a reduction in the number of authorized shares from 490 million to 100 million.
Avalon GloboCare also faced a threat of delisting from Nasdaq due to non-compliance with the minimum bid price requirement. The company has appealed this decision and is awaiting further announcements regarding its appeal and future steps to maintain its listing on the Nasdaq Capital Market.
During Avalon's virtual annual meeting, stockholders elected seven directors to the company's board and approved a change in the company's independent registered public accounting firm from Marcum LLP to M&K CPAS, PLLC. They also consented to the issuance of common stock exceeding 19.99% of the outstanding shares. Additionally, Avalon GloboCare announced the U.S. launch of its KetoAir™ breathalyzer, a device for ketogenic health management.
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