Avalon GloboCare Corp., a biotech company with a market capitalization of $3.75 million and currently trading at $3.45, has entered into a significant agreement and made changes to its capital structure, according to a recent 8-K filing with the Securities and Exchange Commission.
According to InvestingPro data, the company's stock has experienced significant volatility, declining nearly 48% over the past six months. On Monday, the company executed an exchange agreement with its Chairman, Wenzhao Lu, wherein Lu exchanged 9,000 shares of Series A Preferred Stock for 5,000 shares of newly designated Series D Preferred Stock.
This transaction effectively retired the Series A Preferred Stock, as there are now no outstanding shares of that series. The exchange was conducted under an exemption from registration, indicating that it did not require the usual SEC registration for public offerings.
In addition, on January 6, 2025, Avalon filed a certificate of designations for the Series D Convertible Preferred Stock. This new series of preferred stock comes with a stated value of $1,000 per share and ranks pari passu with the company's Series B and Series C Convertible Preferred Stock.
The Series D Preferred Stock does not carry voting rights except as required by law and is convertible into common stock at a rate of $2.41 per share, subject to shareholder approval for the issuance of the conversion shares. The conversion is also subject to a 4.99% beneficial ownership limitation to prevent any single holder from gaining an excessive share of the common stock through conversion.
The company's financial and corporate maneuvers, including the exchange agreement and the creation of the Series D Preferred Stock, are part of its ongoing strategic financial management. InvestingPro analysis reveals concerning liquidity metrics, with a current ratio of 0.11 and an overall Financial Health Score rated as "Weak." The details of these corporate actions are outlined in the exhibits attached to the 8-K filing.
This report is based on a press release statement and provides a snapshot of Avalon GloboCare's latest corporate activities as they continue to shape their financial and governance structures. InvestingPro subscribers have access to additional insights, including 7 more ProTips and comprehensive financial metrics that can help evaluate the company's strategic decisions and market position.
In other recent news, Avalon GloboCare Corp. has made several strategic moves to strengthen its financial position and conform to Nasdaq requirements. The biotechnology company has entered into a financial agreement with investor York Sun Investment Holding Limited, involving the sale of Series C Convertible Preferred Stock valued at $7 million. The initial transaction saw York Sun Investment Holding Limited acquire 3,500 shares for $3.5 million, with the remaining shares expected to be purchased within 120 days.
Furthermore, Avalon GloboCare has implemented a 1-for-15 reverse stock split and decreased the number of authorized shares from 490 million to 100 million in an effort to regain compliance with Nasdaq's minimum bid price requirement. The company is currently awaiting further announcements regarding its appeal to maintain its listing on the Nasdaq Capital Market.
On a governance note, Avalon GloboCare's 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. Also, the company has launched its KetoAir™ breathalyzer in the U.S., a device for ketogenic health management.
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