Avalon GloboCare Corp. (NasdaqCM:AVCO) entered into an agreement to acquire 40% stake in Laboratory Services MSO, LLC from Zoe Family Trust, Bryan Cox and Sarah Cox for $31 million on November 7, 2022. The consideration consisted of $5 million was paid as a refundable prepayment at signing, (ii) $10 million will be paid in cash at the closing, (iii) $15 million will be paid pursuant to the issuance of 15,000 shares of the Company?s newly designated Series B Convertible Preferred Stock, stated value $1,000, which Series B Preferred Stock will be convertible into shares of the Company?s common stock at a conversion price per share equal to $0.575 or an aggregate of 26,086,957 shares of the Company?s common stock, which are subject to the Lock Up Period, $1 million will be paid on the first anniversary of the closing date. The Seller is also eligible to receive certain earnout payments upon achievement of certain operating results, which may be comprised of up to $10 million of which (x) $5 million will be paid in cash and (y) $5 million will be paid pursuant to the issuance of the number of shares of Company common stock valued at $5 million. The Cash Earnout Payment, upon the Company achieving total combined EBITDA equal to or greater than $20 Million for the two (2) fiscal years ending December 31, 2022 and 2023 as recorded on the Company?s audited consolidated financial statements. The Equity Earnout Payment, upon the Company achieving total combined EBITDA equal to or greater than $28 Million for the two (2) fiscal years ending December 31, 2022 and 2023 as recorded on the Company?s audited consolidated financial statements. In connection with the closing of the Transaction, Sarah Cox will become the Chief Operating Officer of the Company, replacing Meng Li, who will continue to serve as a Chief Operating Officer of Avalon (Shanghai) Healthcare Technology Co., Ltd, a subsidiary of the Company. In addition, Ms. Cox will be appointed as a director of the Company and Ms. Li will resign as a director of Avalon GloboCare. At the closing of the Transaction, Ms. Cox and the Company will enter into an employment agreement providing for an annual salary of three hundred and fifty thousand dollars $0.35 million and other customary compensation. In conjunction with the Transaction, on November 7, 2022, the Company conducted a private placement offering of 5,000 shares of its newly designated Series A Convertible Preferred Stock. Completed a private placement of $5 million in shares of the Company?s Series A preferred stock. On December 14, 2022 completed a private placement of shares of its Series A preferred stock with the Company?s Chairman, Daniel Lu. The gross proceeds of the offering were $4.0 million. The closing of the Transaction is subject to customary conditions to closing, including completion of financing for the remainder of the cash purchase price. The closing of the transactions contemplated by the Agreement is subject to customary conditions to closing, including completion of financing for the remainder of the cash purchase price. The transaction is expected to close in 30 days, subject to a 90 day right of extension by the Company. As of January 24, 2023, the transaction is expect to close the transaction this quarter.

Steven Skolnick and Annie Nazarian Davydov of Lowenstein Sandler LLP acted as legal advisor to Avalon GloboCare. Michael S. Winsten of Winsten Law Group acted as legal advisor to Laboratory Services. Revere Securities LLC is acting as an advisor to Avalon in the transaction. Blythe Global LLC is acting as the accountant.

Avalon GloboCare Corp. (NasdaqCM:AVCO) completed the acquisition of a 40% stake in Laboratory Services MSO, LLC from Zoe Family Trust, Bryan Cox and Sarah Cox on February 9, 2023. Pursuant to the terms and conditions set forth in the Amended MIPA, Buyer acquired from the Seller, forty percent (40%) of all the issued and outstanding equity interests of Laboratory Services MSO (the ? Purchased Interests?), free and clear of all liens (the ? Transaction?). The consideration paid by Buyer to Seller for the Purchased Interests consisted of $21,000,000, which comprised of (i) $9,000,000 in cash, (ii) $11,000,000 pursuant to the issuance of 11,000 shares of the Company?s newly designated Series B Convertible Preferred Stock (the ? Series B Preferred Stock?), stated value $1,000 (the ? Series B Stated Value?), and (iii) a $1,000,000 cash payment on February 9, 2024 (the ? Anniversary Payment?). The Series B Preferred Stock will be convertible into shares of the Company?s common stock at a conversion price per share equal to $3.78 or an aggregate of 2,910,053 shares of the Company?s common stock and are subject to the Lock Up Period, as defined below, and the restrictions on sale set forth under Item 5.03 Amendments to Articles of Incorporation or Bylaws: Change in Fiscal Year - Series B Preferred Stock ? Conversion. The Seller is also eligible, under the terms set forth in the Amended MIPA, to receive certain earnout payments upon achievement of certain operating results, which may be comprised of up to $10,000,000 of which (x) up to $5,000,000 will be paid in cash and (y) up to $5,000,000 will be paid pursuant to the issuance of the number of shares of Company common stock valued at $5,000,000, calculated using the closing price of the Company?s common stock on December 31, 2023, rounded down to the nearest whole share (collectively, the ? Earnout Payments?).