{"url_path":"/sec/avai/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 Market for Registrant’s Common Equity,","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-14","source_url":"https://www.sec.gov/Archives/edgar/data/1740797/0001740797-26-000017-index.html","accession_number":"0001740797-26-000017","cik":"0001740797","ticker":"AVAI","issuer_name":"AVAI BIO, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1740797/0001740797-26-000017-index.html","primary_entity_key":"0001740797","primary_entity_name":"AVAI BIO, INC."},"word_count":3781,"has_tables":true,"body_markdown":"**Item 5. Market for Registrant’s Common Equity,\nRelated Stockholder Matters and Issuer Purchases of Equity Securities.**\n\n \n\nOn March 6, 2023, the Company filed a Certificate\nof Amendment to its Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada to increase the number of\nauthorized shares of the Company’s common stock from 255,000,000 to 520,000,000 shares (the “Charter Amendment”) of\nwhich 500,000,000 shall be common stock, $0.001 par value per share, and 20,000,000 shall be blank check preferred stock, $0.001 par value\nper share. The term \"blank check\" refers to preferred stock, the creation and issuance of which is authorized in advance by\nthe stockholders and the terms, rights and features of which are determined by the Board upon issuance. The authorization of such blank\ncheck preferred stock would permit the Board to authorize and issue preferred stock from time to time in one or more series.\n\n** **\n\n**Preferred Stock**\n\n** **\n\nThe Company has 20,000,000, $0.001 par value shares\nof preferred stock authorized as of March 31, 2026. There were 11,300,000 shares of preferred stock issued and outstanding as of March\n31, 2026.\n\n \n\n**Preferred Stock Series A**\n\n** **\n\nThe Company has 5,000, $0.001 par value shares of\npreferred stock series A authorized as of March 31, 2026. There were 3,050 shares of preferred stock series A issued and outstanding as\nof March 31, 2026.\n\n \n\n**Common Stock**\n\n \n\nThe Company has 500,000,000 shares, $0.001 par value\nof common stock as of March 31, 2026. There were 153,211,252 shares of common stock issued and outstanding as of March 31, 2026.\n\n \n\n**Warrants**\n\n \n\nNo warrants were issued or outstanding as of March\n31, 2026.\n\n \n\n**Market Information**\n\n** **\n\nThe common shares of the Company are traded on OTC\nQB Markets under the ticker symbol of AVAI.\n\n \n\n**Record Holders**\n\n \n\nThe number of holders of record for our common stock\nas of March 31, 2026, was 110.\n\n \n\n**Dividends**\n\n \n\nNo cash dividends were paid on our shares of common\nstock during the fiscal years ended March 31, 2026 and 2025.\n\n \n\n**Securities Authorized for Issuance Under Equity\nCompensation Plans**\n\n \n\nWe presently do not have equity compensation plans\nauthorized.\n\n \n\n**Transfer agent change**\n\n \n\nThe Company transfer agent is ClearTrust LLC with\na business address at 16540 Pointe Village Drive Suite 205\n\nLutz, Florida 3355850; ClearTrust LLC ’s website is www.cleartrustonline.com, and their phone number is (813) 235-4490.\n\n \n\n14\n\n \n\n \n\n**Penny Stock**\n\n \n\nOur common stock is considered “penny stock”\nunder the rules of the SEC under the Securities Exchange Act of 1934. The SEC adopted rules that regulate broker-dealer practices in connection\nwith transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5, other than securities registered\non certain national securities exchanges or quoted on the NASDAQ Stock Market System, provided that current price and volume information\nwith respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer,\nprior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that:\n\n \n\n●\ncontains a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading;\n\n \n\n●\ncontains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities’ laws; contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;\n\n \n\n●\ncontains a toll-free telephone number for inquiries on disciplinary actions;\n\n \n \n\n●\ndefines significant terms in the disclosure document or in the conduct of trading in penny stocks; and\n\n \n\n●\ncontains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.\n\n \n\nThe broker-dealer also must provide, prior to effecting any transaction\nin a penny stock, the customer with:\n\n \n\n●\nbid and offer quotations for the penny stock;\n\n \n\n●\nthe compensation of the broker-dealer and its salesperson in the transaction;\n\n \n\n●\nthe number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and\n\n \n\n●\nmonthly account statements showing the market value of each penny stock held in the customer’s account.\n\n \n\nIn addition, the penny stock rules that require that\nprior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination\nthat the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgement of the receipt\nof a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably\nstatement.\n\n \n\nThese disclosure requirements may have the effect\nof reducing the trading activity in the secondary market for our stock.\n\n** **\n\n**Recent Sales of Unregistered Securities**\n\n \n\n**Preferred Stock**\n\nThe Company has 20,000,000 shares, $0.001 par value\nof preferred stock authorized as of March 31, 2026.\n\n \n\nOn November 21, 2023, the Company issued 3,000,000\nshares of preferred stock in exchange for 3,000,000 shares of common stock.\n\n \n\nOn December 1, 2023, the Company issued 2,000,000\nshares of preferred stock as bonuses to officers of the Company.\n\n \n\nOn August 1, 2024, the Company issued 1,300,000\nshares of preferred stock in exchange for 1,300,000 shares of common stock.\n\n \n\nThere were 11,300,000 shares of preferred stock issued\nand outstanding as of March 31, 2026.\n\n** **\n\n15\n\n \n\n \n\n**Preferred Stock Series A**\n\nThe Company has 5,000 shares, $0.001 par value of\npreferred stock series A authorized as of March 31, 2026.\n\n \n\nIn April 2023, the Company issued 5,000 shares of\npreferred stock series A for InstantFAME acquisition.\n\n \n\nOn November 27, 2023, the Company converted 1,950\nseries A preferred stock shares into 26,973,528 shares of Common Stock.\n\n \n\nThere were 3,050 shares of preferred stock series\nA issued and outstanding as of March 31, 2026.\n\n** **\n\n**Common Stock**\n\nThe Company has 500,000,000 shares, $0.001 par value\nof common stock as of March 31, 2026.\n\n \n\nOn April 25, 2023, the Company issued 26,000,000 common\nshares for Avant! AI™ acquisition.\n\n \n\nOn June 1, 2023, the Company issued 5,250,000 common\nshares in exchange for convertible notes in the amount of $94,500.\n\n \n\nOn July 27, 2023, the Company issued 213,243 common\nshares for cancelation of $287,500 payroll debt.\n\n \n\nOn August 17, 2023, the Company issued 9,550,000 common\nshares for cancelation of $114,600 payroll debt.\n\n \n\nOn October 20, 2023, the Company issued 3,000,000\ncommon shares for cancelation of $54,000 related party loan.\n\n \n\nOn November 21, 2023, the Company issued 3,000,000\nshares of preferred stock, featuring a 1:5 voting right, in exchange for 3,000,000 shares of common stock.\n\n \n\nOn November 27, 2023, the Company converted 1,950\nseries A preferred stock shares into 26,973,528 shares of Common Stock.\n\n \n\nDuring the year ended March 31, 2024, the Company\nissued 8,477,324 common shares for cancelation of $604,318 payroll debt and 2,050,000 common shares as bonuses to officers of the Company.\n\n \n\nOn March 22, 2024, the Company issued 150,000 common\nshares for consulting services that were cancelled on May 29, 2024.\n\n \n\nOn July 25, 2024, the Company issued 5,517,000 common\nshares for cancelation of $306,500 payroll debt.\n\n \n\nOn July 26, 2024, the Company issued 140,534 common\nshares for cancelation of $101,739 debt for the consulting services provided.\n\n \n\nOn August 1, 2024, the Company issued 1,300,000\nshares of preferred stock, featuring a 1:5 voting right, in exchange for 1,300,000 shares\nof common stock.\n\n \n\nOn August 9, 2024, the Company issued 527,002\ncommon shares for cancelation of $375,000 debt for the consulting services provided.\n\n \n\nOn September 4, 2024, the Company issued 9,900,000\ncommon shares for cancelation of $99,000 debt obligation.\n\n \n\nOn September 6, 2024, the Company issued 70,000 common\nshares for cancelation of $12,000 payroll debt.\n\n \n\nOn November 12, 2024, the Company issued 5,000,000\ncommon shares for cancelation of $50,000 debt obligation.\n\n \n\nOn November 13, 2024, the Company issued 192,138 common\nshares for cancelation of $60,000 debt for the consulting services provided.\n\n \n\nOn November 20, 2024, the Company issued 67,000 common\nshares for cancelation of $22,164 payroll debt.\n\n \n\nOn February 13, 2025, the Company issued 131,933 common\nshares for cancelation of $60,000 debt for the consulting services provided.\n\n \n\n16\n\n \n\n \n\nOn March 3, 2025, the Company issued 100,000 common\nshares for cancelation of $47,656 payroll debt.\n\n \n\nOn April 30, 2025, the Company issued 147,720 common\nshares for cancelation of $60,000 debt for the consulting services provided.\n\n \n\nOn July 24, 2025, the Company issued 118,232 common\nshares for cancelation of $60,000 debt for the consulting services provided.\n\n \n\nOn September 18, 2025, the Company issued 200,000\ncommon shares for cancelation of $83,718 payroll debt.\n\n \n\nOn October 1, 2025, the Company issued 202,068 common\nshares for cancelation of $60,000 debt for the consulting services provided.\n\n \n\nOn January 6, 2026, the Company issued 220,719 common\nshares for cancelation of $60,000 debt for the consulting services provided.\n\n \n\nOn March 16, 2026, the Company issued 2,500,000 common\nshares in exchange for convertible notes in the amount of $25,000.\n\n \n\nOn March 30, 2026, the Company issued 12,459,000 common\nshares for cancelation of $149,508 related party loan.\n\n \n\nThere were 153,211,252 shares of common stock issued\nand outstanding as of March 31, 2026.\n\n \n\n**Warrants**\n\nNo warrants were issued or outstanding as of March\n31, 2026.\n\n \n\n**Convertible Debentures**\n\n** **\n\n**Paid off Debentures:**\n\n*1800 Diagonal Lending LLC*\n\nOn October 2, 2023, the Company entered into a Securities\nPurchase Agreement with 1800 Diagonal Lending LLC (“DL”) pursuant to which the Company issued to DL a Convertible Promissory\nNote (the “October 2023 DL Convertible Note”) in the aggregate principal amount of $126,000 for a purchase price of $105,000.\nThe October 2023 DL Convertible Note has a maturity date of March 2, 2025 and the Company has agreed to pay interest on the unpaid principal\nbalance of the DL Convertible Note at the rate of eight percent (8.0%) per annum from the date on which the October 2023 DL Convertible\nNote is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company\nshall have the right to prepay the October 2023 DL Convertible Note, provided it makes a payment including a prepayment to DL as set forth\nin the October 2023 DL Convertible Note. The outstanding principal amount of the DL Convertible Note may not be converted prior to the\nperiod beginning on the date that is 180 days following the date the DL Convertible Note is issued. Following the 180th day, DL may convert\nthe DL Convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest\ntrading price during the 20-day period preceding the date of conversion. In addition, upon the occurrence and during the continuation\nof an event of default (as defined in the DL Convertible Note), the DL Convertible Note shall become immediately due and payable and the\nCompany shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Convertible Note.\nIn no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially\nowned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company. On April 2, 2024, the\nCompany paid off the October 2023 DL Convertible Note, including principal and interest, in cash for $137,549.\n\n \n\n*Red Road Holdings Corporation*\n\nOn December 18, 2024, the Company entered into a Securities\nPurchase Agreement and issued a Promissory Note (the “Note”), under which the Company has agreed to pay Red Road Holdings\nCorporation, a Virginia corporation, or its registered assigns (the “Holder”), the sum of $179,400.00, along with any interest\nas specified in the Note, on or before October 30, 2025 (the “Maturity Date”). Interest will accrue on the unpaid principal\nbalance from the Issue Date, in accordance with the terms set forth in the Note. The Note may not be prepaid in whole or in part, except\nas explicitly allowed therein. Any outstanding principal or interest not paid when due will bear Default Interest at a rate of 22% per\nannum from the due date until payment is made in full. All payments due under the Note, to the extent not converted into the Company’s\ncommon stock (par value $0.001 per share),\n\n17\n\n \n\n \n\nshall be made in lawful money of the United States\nof America. Payments will be made to such address as the Holder may designate in writing. Capitalized terms not otherwise defined herein\nshall have the meanings ascribed to them in the Securities Purchase Agreement dated December 18, 2024, under which this Note was originally\nissued. As of October 30, 2025, the Company paid off this Note, including principal and interest, in cash for $200,928.\n\n \n\nOn January 27, 2025, the Company entered into a Securities\nPurchase Agreement and executed a Promissory Note (the “Note”), under which the Company has agreed to pay to Red Road Holdings\nCorporation, a Virginia corporation, or its registered assigns (the “Holder”), the sum of $93,150, together with any interest\nas specified in the Note, on or before November 30, 2025 (the “Maturity Date”). Interest will accrue on the unpaid principal\nbalance from the Issue Date in accordance with the terms outlined in the Note. The Note may not be prepaid in whole or in part, except\nas explicitly permitted therein. In the event of any overdue principal or interest payments, a Default Interest rate of 22% per annum\nwill apply from the due date until full payment is made. All payments due under the Note, to the extent not converted into the Company’s\ncommon stock (par value $0.001 per share), shall be made in U.S. dollars. Payments will be made to such address as the Holder may designate\nin writing. Capitalized terms used herein, and not otherwise defined, shall have the meanings ascribed to them in the Securities Purchase\nAgreement dated the same date as this Note, under which the Note was originally issued. As of December 31, 2025, the Company paid off\nthis Note, including principal and interest, in cash for $104,328.\n\n \n\nOn March 14,\n2025, the Company entered into a Securities Purchase Agreement and executed a Promissory Note (the “Note”), under which the\nCompany has agreed to pay to Red Road Holdings Corporation, a Virginia corporation, or its registered assigns (the “Holder”),\nthe sum of $93,725, together with any interest as specified in the Note, on or before January\n15, 2026 (the “Maturity Date”). Interest will accrue on the unpaid principal balance from the Issue Date in accordance with\nthe terms outlined in the Note. The Note may not be prepaid in whole or in part, except as explicitly permitted therein. In the event\nof any overdue principal or interest payments, a Default Interest rate of 22% per annum will apply from the due date until full payment\nis made. All payments due under the Note, to the extent not converted into the Company’s common stock (par value $0.001 per share),\nshall be made in U.S. dollars. Payments will be made to such address as the Holder may designate in writing. Capitalized terms used herein,\nand not otherwise defined, shall have the meanings ascribed to them in the Securities Purchase Agreement dated the same date as this Note,\nunder which the Note was originally issued. As of January 14, 2026, the Company paid off this Note, including principal and interest,\nin cash for $104,972.\n\n \n\n*Oleg Sapojnicov*\n\nOn May 3, 2021, Natalija Tunevic, assigned her $25,000\nloan to Mr. Oleg Sapojnicov. A conversion clause was added to the Note, pursuant to which, the $25,000 loan is convertible, at any time\nafter six months, at the discretion of Mr. Oleg Sapojnicov, into shares of the Company’s Common Stock at a fixed conversion price\nof $0.01 per share. On March 16, 2026, the Company issued 2,500,000 common shares in exchange for this note in the amount of $25,000.\n\n** **\n\n**Current Debentures:**\n\n*Boot Capital\nLLC*\n\nOn June 30,\n2025 (the “Effective Date”), the Company entered into a Securities Purchase Agreement (the “SPA”) and executed\na Promissory Note (the “Note”), under which the Company has agreed to pay to Boot Capital LLC, a Delaware limited liability\ncompany, or its registered assigns (the “Holder”), the sum of $128,800 together with any interest as specified in the Note,\non or before April 30, 2026 (the “Maturity Date”). Interest will accrue on the unpaid principal balance from the Issue Date\nin accordance with the terms outlined in the Note. The Note may not be prepaid in whole or in part, except as explicitly permitted therein.\nIn the event of any overdue principal or interest payments, a Default Interest rate of 22% per annum will apply from the due date until\nfull payment is made. All payments due under the Note, to the extent not converted into the Company’s common stock (par value $0.001\nper share), shall be made in U.S. dollars. Payments will be made to such address as the Holder may designate in writing. Capitalized terms\nused herein, and not otherwise defined, shall have the meanings ascribed to them in the SPA dated the same date as this Note, under which\nthe Note was originally issued. As of March 31, 2026, the Company partially repaid this Note, in cash for $112,700.\n\n \n\nOn January 7,\n2026 (the “Effective Date”), the Company entered into a Securities Purchase Agreement (the “SPA”) and executed\na Promissory Note (the “Note”), under which the Company has agreed to pay to Boot Capital LLC, a Delaware limited liability\ncompany, or its registered assigns (the “Holder”), the sum of $128,800 together with any interest as specified in the Note,\non or before October 15, 2026 (the “Maturity Date”). Interest will accrue on the unpaid principal balance from the Issue Date\nin accordance with the terms outlined in the Note. The Note may not be prepaid in whole or in part, except as explicitly permitted therein.\nIn the event of any overdue principal or interest payments, a Default Interest rate of 22% per annum will apply from the\n\n18\n\n \n\n \n\ndue date until\nfull payment is made. All payments due under the Note, to the extent not converted into the Company’s common stock (par value $0.001\nper share), shall be made in U.S. dollars. Payments will be made to such address as the Holder may designate in writing. Capitalized terms\nused herein, and not otherwise defined, shall have the meanings ascribed to them in the SPA dated the same date as this Note, under which\nthe Note was originally issued. As of March 31, 2026, this Note remained outstanding.\n\n \n\n*Vanquish\nFunding Group Inc.*\n\nOn June 30,\n2025, the Company entered into another Securities Purchase Agreement (the “SPA”) and issued another Promissory Note (the “Note”),\nunder which the Company has agreed to pay to Vanquish Funding Group Inc., a Virginia corporation, or its registered assigns (the “Holder”),\nthe sum of $202,215 together with any interest as specified in the Note, on or before April 30, 2026 (the “Maturity Date 2”).\nInterest will accrue on the unpaid principal balance from the Issue Date in accordance with the terms outlined in the Note. The Note may\nnot be prepaid in whole or in part, except as explicitly permitted therein. In the event of any overdue principal or interest payments,\na Default Interest rate of 22% per annum will apply from the due date until full payment is made. All payments due under the Note, to\nthe extent not converted into the Company’s common stock (par value $0.001 per share), shall be made in U.S. dollars. Payments will\nbe made to such address as the Holder may designate in writing. Capitalized terms used herein, and not otherwise defined, shall have the\nmeanings ascribed to them in the SPA dated the same date as this Note, under which the Note was originally issued. As of March\n31, 2026, the Company partially repaid this Note, in cash for $176,936.\n\n \n\nOn September\n19, 2025, the Company entered into another Securities Purchase Agreement (the “SPA”) and issued another Promissory Note (the\n“Note”), under which the Company has agreed to pay to Vanquish Funding Group Inc., a Virginia corporation, or its registered\nassigns (the “Holder”), the sum of $170,016 together with any interest as specified in the Note, on or before June 30, 2026\n(the “Maturity Date 2”). Interest will accrue on the unpaid principal balance from the Issue Date in accordance with the terms\noutlined in the Note. The Note may not be prepaid in whole or in part, except as explicitly permitted therein. In the event of any overdue\nprincipal or interest payments, a Default Interest rate of 22% per annum will apply from the due date until full payment is made. All\npayments due under the Note, to the extent not converted into the Company’s common stock (par value $0.001 per share), shall be\nmade in U.S. dollars. Payments will be made to such address as the Holder may designate in writing. Capitalized terms used herein, and\nnot otherwise defined, shall have the meanings ascribed to them in the SPA dated the same date as this Note, under which the Note was\noriginally issued. As of March 31, 2026, the Company partially repaid this Note, in cash for $106,262.\n\n \n\nOn January 7,\n2026, the Company entered into another Securities Purchase Agreement (the “SPA”) and issued another Promissory Note (the “Note”),\nunder which the Company has agreed to pay to Vanquish Funding Group Inc., a Virginia corporation, or its registered assigns (the “Holder”),\nthe sum of $266,616 together with any interest as specified in the Note, on or before October 15, 2026 (the “Maturity Date 2”).\nInterest will accrue on the unpaid principal balance from the Issue Date in accordance with the terms outlined in the Note. The Note may\nnot be prepaid in whole or in part, except as explicitly permitted therein. In the event of any overdue principal or interest payments,\na Default Interest rate of 22% per annum will apply from the due date until full payment is made. All payments due under the Note, to\nthe extent not converted into the Company’s common stock (par value $0.001 per share), shall be made in U.S. dollars. Payments will\nbe made to such address as the Holder may designate in writing. Capitalized terms used herein, and not otherwise defined, shall have the\nmeanings ascribed to them in the SPA dated the same date as this Note, under which the Note was originally issued. As of March\n31, 2026, this Note remained outstanding.\n\n** **\n\n**Other Stockholder Matters**\n\n \n\nNone."}