Avalon GloboCare Corp

(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 Notesand 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, orterminated 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).