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Avalon GloboCare signs definitive agreement for

By on November 8, 2022 0

The company will acquire a majority stake in Laboratory Services MSO, LLC, a leading reference laboratory with unaudited revenues of over $25 million in 2021, net income over $10 million, and over 600,000 tests performed since inception

The cash portion will be funded by a $15 million private placement of Avalon preferred stock, convertible at a floor of $1.00 per share, with flight clauses, no warrants and a 9 month

The company will start trading under the new symbol “ALBT” on November 10, 2022

FREEHOLD, N.J., Nov. 08, 2022 (GLOBE NEWSWIRE) — Avalon GloboCare Corp. (“Avalon” or the “Company”) (NASDAQ: AVCO)one of the world’s leading developers of innovative cell therapies and technologies, today announced that it has entered into a definitive acquisition agreement (the “Acquisition Agreement”) to acquire a 60% stake in MSO Laboratory Services, LLC, a leading reference laboratory. As part of the transaction, and to reflect the increased focus on laboratory testing and services, Avalon will change its ticker symbol from “AVCO” to “ALBT”. Avalon common stock will begin trading under the new symbol “ALBT” on the Nasdaq Capital Market on Thursday, November 10, 2022. Until then, Avalon common stock will continue to trade under the symbol ” AVCO”.

Based in Costa Mesa, California, Laboratory Services offers a wide range of diagnostic tests including drug testing, toxicology and a wide range of testing services ranging from general blood work to anatomical pathology and urinary toxicology. Specific capabilities include STAT blood testing, qualitative drug screening, genetic testing, urine testing, sexually transmitted disease testing and more. Laboratory Services has developed an industry leading reputation for customer service and quick turnaround times. Laboratory Services has performed more than 450,000 tests since its inception, operates with unaudited annual revenue of more than $25 million in 2021, and has two locations in California.

The total consideration for the acquisition will be $31 million, consisting of (i) $15 million in cash, (ii) $15 million in Series B preferred shares of the Company and (iii) 1,000,000 dollars payable on the first anniversary of the closing date. The preferred shares will be restricted from conversion for 12 months and thereafter will have escape provisions limiting conversion to only 10% of total holdings.

The Company paid a repayable cash advance of $5 million as part of the signing of the definitive agreement. In addition, the seller will benefit from a 2022 and 2023 positive cash flow target earn-out of up to $10 million, payable in a combination of cash and common stock of the company. Upon closing of the transaction, Sarah Cox, co-founder and CEO of Laboratory Services, will become the company’s chief operating officer and join the company’s board of directors.

The closing of the transactions contemplated by the agreement is subject to customary closing conditions, including the completion of financing for the remainder of the cash purchase price. The transaction is expected to close within 30 days, subject to a 90-day extension right granted by the Company.

As part of the transaction, the Company completed a private placement of $5 million in Series A preferred shares of the Company, which shares are convertible into common shares of the Company at the higher of $1.00 or 90%. the closing price of the Company’s common stock on the Nasdaq stock market on the day before the conversion. The Company intends to raise an additional $10 million to fund the balance of the cash purchase price under the same terms. Holders of Series A Preferred Shares will be prohibited from selling the common shares issuable upon conversion of the Series A Preferred Shares for a period of 9 months and will be limited to selling no more than 10% of their common shares in any calendar month. As part of the acquisition, the Company will issue to the seller $15 million in Series B preferred shares of the Company, which shares will be convertible into common shares of the Company at a conversion price of $0.575 per share. Holders of Series B Preferred Shares will be prohibited from selling the common shares issuable upon conversion of the Series B Preferred Shares for a period of 12 months from closing and will be restricted to selling no more than 10% of their shares of common stock in any calendar month.

David Jin, MD, Ph.D., President and Chief Executive Officer of Avalon, said, “This is a transformative acquisition for Avalon, as it brings significant revenue and positive cash flow and should be highly earnings accretive while adding strong clinical outcomes. synergies with Avalon’s existing portfolio. Laboratory Services has an impressive growth history and is an established leader in the highly fragmented laboratory testing and services market. Laboratory Services’ diagnostics business is highly synergistic with our existing precision companion diagnostics business and cellular technology platforms.

“We are delighted to welcome Sarah Cox, co-founder and CEO of Laboratory Services, and the entire Laboratory Services team to Avalon. Sarah and her team have a proven track record and an excellent reputation within the industry,” Dr. Jin concluded.

Sarah Cox, co-founder and CEO of Laboratory Services, added, “We couldn’t be more excited to join forces with Avalon, as we share a common culture and a commitment to putting the needs of the patient. We have become a one-stop-shop for most clinical trials and every customer receives white glove treatment. We believe that the combination of our established infrastructure with Avalon’s resources, as well as a state-of-the-art diagnostics and immunotherapy platform, should make Avalon a formidable force in this rapidly growing industry.

A more complete description of the terms and conditions of the proposed transaction, conditions to closing and related matters will be included in a current report on Form 8-K to be filed by the Company with the United States Securities and Exchange Commission ( ” DRY “). ), which report will be available on the SEC’s website at www.sec.gov.

The securities described above have been and will be offered pursuant to a private placement pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”), and have not not been and will not be registered under the Act. , and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, and there will be no sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Advisors

Revere Securities LLC is acting as advisor to Avalon in the transaction. Lowenstein Sandler LLP is acting as legal counsel to Avalon in connection with the transaction. Blythe Global LLC is acting as accounting advisor.

About Avalon GloboCare Corp.

Avalon GloboCare Corp. (NASDAQ: AVCO) is a leading, vertically integrated, clinical-stage CellTech bio-developer dedicated to advancing and empowering innovative and transformative immune effector cell therapy, exosome technology, as well as companion diagnostics related to cell therapy. Avalon also provides strategic consulting and outsourcing services to facilitate and enhance its customers’ growth and development, as well as competitiveness in the healthcare industry and cellular technology markets. Through its subsidiary structure with a unique integration of verticals ranging from innovative R&D to automated bioproduction and accelerated clinical development, Avalon is establishing a leading role in the areas of cellular immunotherapy (including CAR-T/NK ), exosome technology (ACTEX™) and therapeutic regeneration. For more information about Avalon GloboCare, please visit www.avalon-globocare.com.

For the latest updates on Avalon GloboCare developments, please follow our twitter at @avalongc_avco

Forward-looking statements

Certain statements contained in this press release may constitute “forward-looking statements”. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that is not directly related to historical or current fact, including statements regarding the potential transaction and financing and terms of closure and laboratory services activities. Actual results may differ materially from those indicated by these forward-looking statements due to various important factors as disclosed in our filings with the Securities and Exchange Commission located at their website (http://www.sec.gov). In addition to these factors, actual future performance, results and results may differ materially due to broader factors, including (without limitation) general industry and market conditions and growth rates. , economic conditions and changes in government and public policy. The forward-looking statements included in this press release represent the Company’s views as of the date of this press release and those views are subject to change. However, while the Company may elect to update these forward-looking statements at some time in the future, the Company expressly disclaims any obligation to do so. These forward-looking statements should not be taken to represent the views of the Company as of any date subsequent to the date of the press release.

Contact information:
Avalon GloboCare Corp.
4400 Route 9, Suite 3100
Freehold, NJ 07728
[email protected]

Investor Relations:
Crescendo Communications, LLC
Such. : (212) 671-1020 ext. 304
[email protected]

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