Avalon GloboCare Corp. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Unregistered Sales of Equity Securities, Financial Statements and Exhibits
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Item 1.01 Entry into a Material Definitive Agreement.
Convertible Note Financing
On October 9, 2023, AVALON GLOBOCARE CORP. (the “Company”) entered into securities purchase agreements (the “Securities Purchase Agreements”) with Mast Hill Fund, L.P. (“Mast Hill”) and Firstfire Global Opportunities Fund, LLC. (“Firstfire”) for the issuance of 13% senior secured promissory notes in the aggregate principal amount of $700,000.00 (collectively the “Notes”) convertible into shares of common stock, par value $0.0001 per share, of the Company, as well as the issuance of up to 70,000 shares of common stock as a commitment fee and warrants for the purchase of up to 105,000 shares of Common Stock at an initial price per share of $2.50 and common share purchase warrants for the purchase of up to 87,500 shares of Common Stock at an initial price per share of $1.80 (collectively, the “October 2023 Warrants”). The Company and its subsidiaries have entered into that certain security agreements (the “Security Agreements”), creating a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the Notes. The transaction closed on October 11, 2023(the “Closing Dates”).
Mast Hill acquired the Notes with principal amount of $350,000.00 and paid the purchase price of $332,500.00 after an original issue discount of $17,500.00 On the same Closing Date, the Company issued (i) a warrant to purchase 52,500 shares of common stock with an exercise price of $2.50 exercisable until the five-year anniversary of the Closing Date, (ii) a warrant to purchase 43,750 shares of common stock with an exercise price of $1.80 exercisable until the five-year anniversary of the Closing Date, which warrant shall be cancelled and extinguished against payment of the Notes, and (iii) 35,000 shares of common stock to Mast Hill as additional consideration for the purchase of the Note, which were earned in full as of the Closing Date. On the Closing Date, the Company delivered such duly executed Notes, warrants and common stock to Mast Hill against delivery of such purchase price.
Firstfire acquired the Notes with principal amount of $350,000.00 and paid the purchase price of $332,500.00 after an original issue discount of $17,500.00 On the same Closing Date, the Company issued (i) a warrant to purchase 52,500 shares of common stock with an exercise price of $2.50 exercisable until the five-year anniversary of the Closing Date, (ii) a warrant to purchase 43,750 shares of common stock with an exercise price of $1.80 exercisable until the five-year anniversary of the Closing Date, which warrant shall be cancelled and extinguished against payment of the Notes, and (iii) 35,00] shares of common stock to Firstfire as additional consideration for the purchase of the Note, which were earned in full as of the Closing Date. On the Closing Date, the Company delivered such duly executed Notes, warrants and common stock to Firstfire against delivery of such purchase price.
The Securities Purchase Agreements contains customary representations and warranties and agreements and obligations of the parties. The proceeds of this Note financing will be used for general corporate purposes. The foregoing description of the Securities Purchase Agreement, the Security Agreement, the Note and the Warrants is qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9 and 10.10, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Mortgage and Security Agreement
On October 9, 2023, the Company entered into mortgage and security agreement (the “Mortgage and Security Agreement”) with Mast Hill and Firstfire (the “Secured Parties”) to secure the payment performance and obligation under the Notes. The Company is indebted to the Secured Part in the combined principal sum of Seven Hundred Thousand and 00/100 ($700,000.00) Dollars, which sum, together with interest, is to be paid according to the Notes.
The foregoing description of the Mortgage and Security Agreement is qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 10.11, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
The securities described above have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and were offered and sold in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2) thereof.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVALON GLOBOCARE CORP. | ||
| Date: October 13, 2023 | By: | /s/ Luisa Ingargiola |
| Name: | Luisa Ingargiola | |
| Title: | Chief Financial Officer | |