Avalon GloboCare Corp. completed a private placement that issued 6,372,550 shares of common stock at $0.51 per share, along with Series A‑1 and Series A‑2 warrants that allow holders to purchase an aggregate of 6,372,550 shares each at the same price. The placement, priced at‑the‑market under Nasdaq rules, is expected to close on February 27, 2026 and is expected to generate gross proceeds of approximately $3.25 million from the share sale, with potential additional proceeds of about $6.5 million if the warrants are fully exercised on a cash basis, bringing total potential proceeds to $9.75 million.
The company plans to use the net proceeds to repay certain outstanding debt and to support working capital and general corporate purposes. This financing is part of a broader effort to shore up the company’s balance sheet, reduce leverage, and maintain liquidity for ongoing operations. The placement is priced at a discount to the prevailing market price of $1.09 per share, a factor that has contributed to investor concern about dilution.
Prior financial data highlight the urgency of the capital raise. In Q3 2025, Avalon reported revenue of $350 k and a net loss of $254 k, while the fiscal year 2024 net loss was $7.9 million. The company’s current ratio was reported as 0.15 or 0.23, indicating liquidity challenges. In February 2026, the company converted $2.6 million of debentures into common stock to regain compliance with Nasdaq’s minimum stockholders’ equity requirement, a move that underscores the need for additional capital to sustain operations.
Investors reacted negatively to the announcement, citing the dilutive nature of the private placement and the significant discount to the market price. The issuance of new shares and warrants, coupled with the requirement for stockholder approval to exercise the warrants, has heightened concerns about dilution and execution uncertainty.
"By substantially reducing debt, we have strengthened our capital structure, enhanced capital efficiency, and improved our overall financial flexibility. Importantly, this progress aligns with our recent return to compliance with Nasdaq's minimum stockholders' equity requirement and positions us to execute our strategic growth initiatives with greater confidence," said Meng Li, Avalon’s interim CEO and COO.
Avalon focuses on precision diagnostic consumer products and generative AI publishing and software, and markets the KetoAir breathalyzer device. The company reports two reportable segments: real property operating and laboratory testing services. The private placement is facilitated by H.C. Wainwright & Co., the exclusive placement agent.
The financing provides a modest capital infusion that can help shore up Avalon’s balance sheet, reduce leverage, and maintain liquidity for ongoing operations. While the immediate market reaction has been negative due to dilution concerns, the capital raise is a key component of the company’s strategy to address liquidity challenges, regain Nasdaq compliance, and position itself for future growth initiatives.
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