Avalon GloboCare Corp. announced that it has entered into a securities purchase agreement with new investor, Mast Hill Fund, L.P. a funds managed by Mast Hill Management, LLC for gross proceeds of $1,425,000 on May 23, 2023. The company has issued of 13% senior secured promissory notes in the aggregate principal amount of $1,500,000 and which was issued at $75,000 original issue discount.

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 75,000 shares of common stock as a commitment fee and warrants for the purchase of up to 230,000 shares of common stock of the company. Principal amount and interest under the notes are convertible into shares of common stock of the company at a conversion price of $4.5 per share unless the company fails to make an amortization payment when due, in which case the conversion price shall be the lower of $4.5 or the trading price of the shares, subject to a floor of $1.5. The company issued a warrant to purchase 125,000 shares of common stock with an exercise price of $4.5 exercisable until the five-year anniversary of the closing date, a warrant to purchase 105,500 shares of common stock with an exercise price of $3.2 exercisable until the five-year anniversary of the closing date, which warrant shall be cancelled and extinguished against payment of the notes, and 75,000 shares of common stock to investor as additional consideration for the purchase of the note, which were earned in full as of the closing date. The company and the buyer are executing and delivering this agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”) and Rule 506(b) promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.