Avalon GloboCare Corp. 8-K

What Happened

• Avalon GloboCare Corp. (ALBT) reported entering a Securities Purchase Agreement with accredited investor Allen O. Cage Jr. (agreement dated June 30, 2026; transaction closed July 2, 2026) under which the company sold 400 shares of newly designated Series F Convertible Preferred Stock and issued 200,000 common “Commitment Shares” as additional consideration for an aggregate purchase price of $400,000. The company also filed a Certificate of Designation for the Series F on July 2, 2026 and granted stock options to officers and directors on June 29, 2026.

Key Details

• Purchase and securities:
  • 400 shares of Series F Convertible Preferred Stock issued; stated value $1,000.00 per share.
  • 200,000 common shares issued as Commitment Shares to the investor.
  • Aggregate purchase price received: $400,000.
• Conversion and redemption terms:
  • Series F conversion price: $0.50 per common share (conversion ratio = 2,000 common shares per preferred share; 400 preferred shares would convert into 800,000 common shares if fully converted).
  • Beneficial ownership conversion limit: 4.99% of outstanding common stock per holder.
  • Mandatory redemption: 25% of outstanding Series F shares required to be redeemed on each of Oct 1, 2026; Nov 1, 2026; Dec 1, 2026; and Jan 1, 2027, at 125% of stated value ($1,250 per preferred share). Holders may elect to convert shares subject to mandatory redemption before the redemption date.
• Governance and preferences:
  • Series F ranks senior to common stock (liquidation preference of 100% of stated value) and junior to any other existing preferred series.
  • No cash dividends; limited voting rights except as required by law and certain class protections.
  • Conversion issuance of common stock is conditioned on shareholder approval; company need not issue common shares on conversion until approval is obtained.
• Option grants:
  • On June 29, 2026, the company issued three-year options (exercise price $0.2820/share) totaling 1,150,000 shares to officers (400,000 to Luisa Ingargiola; 400,000 to Meng Li; 350,000 to Brio Financial and Sam Knipper) and 600,000 options to non-employee directors (exercise price $0.2820).

Why It Matters

• Dilution and potential share count impact: the financing included both an immediate issuance of 200,000 common shares and a preferred instrument convertible at $0.50 that could generate up to 800,000 common shares if fully converted (conversion subject to ownership limits and shareholder approval). Investors should monitor outstanding share count and any shareholder vote on conversion issuance.
• Cash and redemption obligations: the Series F carries mandatory redemptions that, if not converted, would require payments equal to 125% of stated value (total possible redemptions for all 400 shares = $500,000 paid in four installments). The company received $400,000 in proceeds from the sale; investors may want to watch for how Avalon plans to satisfy future redemption obligations or whether holders convert instead.
• Compensation and governance: sizeable option grants were made to executives and directors, which may further dilute equity if exercised; Series F holders have class protections that limit certain corporate actions without their approval. These items affect shareholder rights and potential dilution, important considerations for retail investors.