Item 5. Other Information
ITEM 5. OTHER INFORMATION
(a) 2023 Convertible
Notes and March 2024 Convertible Notes – Events of Default.
As of the
date of this report, we have outstanding the 2023 Convertible Notes with the 2023 Notes Lenders and the March 2024 Convertible Note with
the March 2024 Lender, each as further discussed in Item 1 of this report under “Note 6. Convertible Note Payable.” The 2023
Convertible Notes and the March 2024 Convertible Note contain customary events of default, upon the occurrence of which (after giving
effect to the right to cure of the borrower), the notes shall become due and payable and the borrower shall pay to the lender/s an amount
equal to the principal amount then outstanding under the 2023 Convertible Notes and the March 2024 Convertible Note plus accrued interest
(including any Default Interest, as defined in the 2023 Convertible Notes and the March 2024 Convertible Note, respectively), provided,
however, that the 2023 Notes Lenders and the March 2024 Lender may in their sole discretion determine to accept payment part in shares
of the Company’s common stock (pursuant to the conversion formula set forth in the 2023 Convertible Notes and the March 2024 Convertible
Note) and part in cash.
During the
quarter ended March 31, 2024, the Company’s market capitalization fell below $5 million, which constitutes an event of default under
the 2023 Convertible Notes and the March 2024 Convertible Note.
Pursuant to Section 3.22
of the 2023 Convertible Notes (and the March 2024 Convertible Note), the Company (as borrower under such notes) has a right to cure such
default within ten (10) calendar days (the “Cure Period”) after the earlier of (i) the date the borrower receives notice from
the lenders demanding cure of such default, or (ii) the first date that the then Chief Executive Officer, Chief Financial Officer, or
Board of Directors of the borrower has actual knowledge of the existence of the default.
The Company did not receive any notice from the
2023 Notes Lenders or the March 2024 Lender with respect to the event of default. The Company first had actual knowledge of the existence
of the default on April 29, 2024 and received a waiver from the 2023 Notes Lenders and the March 2024 Lender, waiving this event of default
on May 29, 2024. Although this waiver was not within the Cure Period, the lenders provided a full waiver to the event of default prior
to the issuance of this report.
In addition, the Company failed to file this report
in a timely manner during the prescribed period following the Company’s filing of a 12b-25 extension with respect thereto, which
would have triggered an event of default under the 2023 Convertible Notes and the March 2024 Convertible
Note but for receipt by the Company of the waiver with respect to this event of default from the 2023 Notes Lenders and the March 2024
Lender on the original due date of this report (which waiver was reaffirmed on May 29, 2024) .
Furthermore, on May 23, 2024, the Company received
a waiver to the required amortization payment under the May 2023 Convertible Note. Pursuant to the waiver, the Company received an extension
until June 10, 2024 to allow time for the payment to be made or to allow the Company to refinance the Convertible Notes.
As a result,
the 2023 Convertible Notes and the March 2024 Convertible Note are no longer in default as of the date of this report. The events of default
described above did not have an accounting impact on the Company’s unaudited financial statements for the quarter ended March 31,
2024 since the events of default were either cured within the Cure Period or prior to the date of this report and no penalties associated
with such events of default under the 2023 Convertible Notes and March 2024 Convertible Notes were ever triggered.
(b) None of the Company’s directors and
officers adopted , modified , or terminated a Rule 10b5-1 trading arrangement or a non- Rule 10b5-1
trading arrangement during the Company's fiscal quarter ended March 31, 2024 (each as defined in Item 408 of Regulation S-K under the
Securities Exchange Act of 1934, as amended).
43
ITEM 6. EXHIBITS
The
exhibits filed as part of this Quarterly Report on Form 10-Q are listed in the exhibit index included herewith and are incorporated by
reference herein .
EXHIBIT INDEX
Exhibit No.
Description
10.1
Mortgage and Security Agreement, dated March 27, 2024, between Avalon GloboCare Corp. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 10.1 of the Registrant’s Report on Form 8-K filed with the Securities and Exchange Commission on March 27, 2024).
10.2
Mortgage and Security Agreement, dated March 27, 2024, between Avalon GloboCare Corp. and Firstfire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Report on Form 8-K filed with the Securities and Exchange Commission on March 27, 2024).
10.3
Security Purchase Agreement, dated March 7, 2024, between Avalon GloboCare Corp. and Mast Hill Fund, LP.*
10.4
Senior Secured Convertible Promissory Note, dated March 7, 2024, between Avalon GloboCare Corp. and Mast Hill Fund, LP.*
10.5
Security Agreement, dated March 7, 2024, between Avalon GloboCare Corp. and Mast Hill Fund, LP.*
10.6
Warrant, dated March 7, 2024, between Avalon GloboCare Corp. and Mast Hill Fund, LP.*
* 31.1
Certification of the Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
* 31.2
Certification of the Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities and Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
** 32.1
Certification of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
** 32.2
Certification of the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
*101.SCH
Inline XBRL Taxonomy Extension Schema Document.
*101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
*101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
*101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
*101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
* Filed herewith.
** Furnished herewith.
44
SIGNATURES
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.
By:
/s/ David K. Jin
Dated: May 30, 2024
Name:
David K. Jin
Title:
Chief Executive Officer
( Principal Executive Officer )
By:
/s/ Luisa Ingargiola
Dated: May 30, 2024
Name:
Luisa Ingargiola
Title:
Chief Financial Officer
( Principal Financial and Accounting Officer )
45