Business
Avalon GloboCare Announces Closing of Strategic Investment in Laboratory Services MSO, a Leading Clinical Diagnostics and Reference Laboratory Company
Transaction Expected to Be Accretive to Earnings Through Profit Sharing Agreement Adds Strong Clinical Synergies to Existing Avalon Portfolio Marks Launch of
About this update from Avalon Globocare Corp.
[{"type":"text","content":"Transaction Expected to Be Accretive to Earnings Through Profit Sharing Agreement Adds Strong Clinical Synergies to Existing Avalon Portfolio Marks Launch of New Roll-Up Strategy Targeting Toxicology and Pharmacogenetic Laboratories FREEHOLD, N.J., Feb. 13, 2023 (GLOBE NEWSWIRE) -- Avalon GloboCare Corp. (“Avalon” or the “Company”) (NASDAQ: ALBT), a leading global developer of innovative cell-based technology, cellular therapy and precision diagnostics, today announced that it has acquired a 40% interest in Laboratory Services MSO, LLC (“LSM”), a premier clinical diagnostics and reference laboratory. Headquartered in Costa Mesa, California, LSM provides a broad portfolio of diagnostic tests including drug testing, toxicology, pharmacogenetics, and a broad array of test services, from general bloodwork to anatomic pathology. Specific capabilities include STAT blood testing, qualitative drug screening, genetic testing, urinary testing, sexually transmitted disease testing and more. LSM has a sophisticated and state-of-the-art facility for clinical diagnostics and reference laboratory. It has also developed a premier reputation for customer service satisfaction and fast turnaround time in the industry. LSM has completed over 600,000 tests since inception and currently has two operational locations in California. Total consideration for the transaction was $21 million, consisting of (i) $9 million in cash, (ii) $11 million in shares of the Company’s Series B preferred stock, which are convertible into shares of the Company’s common stock at a fixed conversion price of $3.78 per share, and (iii) $1 million in cash payable on February 9, 2024. The preferred shares will be restricted from conversion for 12 months and thereafter will have leak-out provisions restricting conversion to only 10% of total holdings. In addition, the seller is also eligible, under the terms set forth in the purchase agreement, to receive certain earnout payments upon achievement of certain operating results, which may be comprised of up to $10,000,000 of which (iv) up to $5,000,000 will be paid in cash and (v) 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. In connection with the transaction, the p...