Avalon GloboCare Corp (NASDAQ:ALBT) announced that it has raised $4 million through a private placement of shares of its Series A preferred stock with the company’s chairman, Daniel Lu.
The gross proceeds are in addition to the previously announced private placement of $5 million of Series A preferred stock, all of which will be used to pay a portion of the purchase price for the announced acquisition of Laboratory Services MSO, LLC, Avalon said.
In November, Avalon inked a definitive acquisition agreement to acquire a 60% interest in Laboratory Services MSO, a premier reference laboratory headquartered in Costa Mesa, California.
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“We are grateful for our chairman’s continued support, as illustrated by his personal participation in this private placement,” said David Jin, CEO of Avalon GloboCare in a statement.
“We believe that the expected Laboratory Services acquisition will be a truly transformative acquisition for Avalon, as it brings significant revenue and positive cash flow, which we believe will be highly accretive to earnings, while adding strong clinical synergies to the existing Avalon portfolio," he added.
The Series A preferred stock is convertible into shares of Avalon’s common stock at a price per share equal to the greater of $1 or 90% of the closing price of the company’s common stock on the Nasdaq on the day prior to conversion.
All holders of the Series A preferred stock will be restricted from selling the shares of common stock issuable upon conversion of the Series A preferred stock for a period of nine months and will be limited to selling no more than 10% of their shares of common stock in any calendar month, the company said.
Avalon plans to raise an additional $6 million through the sale of additional shares of Series A preferred stock based on the same terms and conditions as the prior private placements in order to fund the remaining portion of the purchase price to consummate the closing of the transaction.
Avalon is a New Jersey-based clinical-stage biotechnology company that develops innovative, transformative cellular therapeutics, precision diagnostics, and clinical laboratory services. Avalon also provides strategic advisory and outsourcing services to facilitate and enhance its clients’ growth and development, as well as competitiveness in healthcare and CellTech industry markets.
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