UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AVALON GLOBOCARE CORP. (Exact name of registrant as specified in its charter) | Delaware | 47--1685128 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 4400 Route 9 South, Suite 3100 | | | Freehold, New Jersey | 07728 | (Address of principal executive offices) (Zip Code) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ...

Core Viewpoint - Avalon GloboCare Corp. has entered into a definitive agreement with Qi Diagnostics to co-develop a VOC nanosensor-based point-of-care cannabis breathalyzer aimed at enhancing public safety and supporting real-time detection of cannabis-impaired driving [1][2][3] Company Overview - Avalon GloboCare Corp. (NASDAQ: ALBT) specializes in precision diagnostic consumer products and is advancing intellectual property in cellular therapy [4] - The company is currently marketing the KetoAir™ breathalyzer device, which is registered with the U.S. Food and Drug Administration as a Class I medical device [4] Strategic Collaboration - The collaboration involves Avalon, its subsidiary Q&A Distribution, LLC, and Qi Diagnostics to jointly design, validate, and develop a prototype for the cannabis breathalyzer device [2] - This partnership aims to combine Avalon's regulatory expertise with Qi Diagnostics' VOC nanosensor technology to create a non-invasive cannabis detection solution [3] Public Health Impact - The cannabis breathalyzer is intended to support law enforcement and workplace safety by providing a real-time detection solution for cannabis impairment [3]

Core Viewpoint - Avalon GloboCare Corp. has entered into a definitive agreement with Qi Diagnostics Limited to co-develop a VOC nanosensor-based point-of-care cannabis breathalyzer aimed at enhancing public safety and supporting real-time detection of cannabis-impaired driving [1][2][3] Company Overview - Avalon GloboCare Corp. (NASDAQ: ALBT) specializes in precision diagnostic consumer products and is advancing intellectual property in cellular therapy [4] - The company is currently marketing the KetoAir™ breathalyzer device, which is registered with the U.S. Food and Drug Administration as a Class I medical device [4] Strategic Collaboration - The collaboration involves Avalon, its subsidiary Q&A Distribution, LLC, and Qi Diagnostics to jointly design, validate, and develop a prototype for the cannabis breathalyzer device [2] - This partnership aims to combine Avalon's regulatory expertise with Qi Diagnostics' VOC nanosensor technology to provide a non-invasive cannabis detection solution [3]

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q1 2025 net loss was $2.48 million, total assets decreased to $10.6 million, and a $11.7 million working capital deficit raises substantial doubt about going concern [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased by 49.4% to $10.6 million as of March 31, 2025, primarily due to the disposition of equity method investments, resulting in a $3.9 million equity deficit Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2025 ($) | December 31, 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **10,609,789** | **20,985,178** | **-49.4%** | | Cash | 1,369,586 | 2,856,309 | -52.0% | | Equity method investments, net | - | 10,636,544 | -100.0% | | **Total Liabilities** | **14,501,059** | **13,882,555** | **+4.5%** | | Total Current Liabilities | 14,449,353 | 13,882,555 | +4.1% | | **Total (Deficit) Equity** | **(3,891,270)** | **7,102,623** | **-154.8%** | | Accumulated deficit | (90,155,236) | (87,673,125) | +2.8% | - The company disposed of its 40% equity interest in Lab Services MSO during the first quarter of 2025, resulting in the elimination of the 'Equity method investments' asset from the balance sheet[9](index=9&type=chunk)[27](index=27&type=chunk)[54](index=54&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss for Q1 2025 increased to $2.48 million from $1.37 million in Q1 2024, primarily due to a significant rise in professional fees Consolidated Statement of Operations Highlights (Unaudited, For the Three Months Ended March 31) | P&L Item | 2025 ($) | 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Real Property Rental Revenue | 349,800 | 314,588 | +11.2% | | Income from Equity Method Investment | 392,677 | 107,469 | +265.4% | | Total Other Operating Expenses | 2,268,862 | 1,001,993 | +126.4% | | - Professional fees | 1,691,579 | 442,335 | +282.4% | | Loss from Operations | (1,806,775) | (843,062) | +114.3% | | **Net Loss** | **(2,482,111)** | **(1,367,513)** | **+81.5%** | | **Net Loss per Share (Basic & Diluted)** | **(1.43)** | **(1.86)** | **-23.1%** | [Condensed Consolidated Statements of Changes in (Deficit) Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20(Deficit)%20Equity) Total equity shifted from $7.1 million positive to a $3.9 million deficit due to net loss and preferred stock changes - Series B Convertible Preferred Stock with a carrying value of **$11,000,000** was extinguished as part of the consideration for the redemption of the company's investment in Lab Services MSO[14](index=14&type=chunk)[170](index=170&type=chunk) - **9,000 shares** of Series A Convertible Preferred Stock (**$9,000,000** carrying value) were exchanged for **5,000 shares** of newly created Series D Convertible Preferred Stock[14](index=14&type=chunk)[167](index=167&type=chunk) - The net loss for the quarter was **$2,482,111**, which directly reduced the accumulated deficit[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to $1.8 million in Q1 2025, leading to a $1.49 million cash decrease to $1.37 million Consolidated Cash Flow Highlights (Unaudited, For the Three Months Ended March 31) | Cash Flow Item | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (1,801,926) | (915,709) | | Net Cash Provided by Investing Activities | 95,000 | - | | Net Cash Provided by Financing Activities | 219,972 | 936,772 | | **Net (Decrease) Increase in Cash** | **(1,486,723)** | **20,068** | | **Cash - End of Period** | **1,369,586** | **305,468** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail KetoAir focus, lab services cessation, a $11.7 million working capital deficit, and ongoing litigation settlement obligations - The company is a commercial-stage company focused on developing and delivering precision diagnostic consumer products, primarily the **KetoAir™** breathalyzer device, and owns income-producing real estate[23](index=23&type=chunk)[25](index=25&type=chunk) - On February 26, 2025, the company's **40% equity interest** in Lab Services MSO was redeemed, effectively ending its laboratory testing services segment, with the company receiving **$1.745 million** in cash consideration (payable over time) and all of its Series B Preferred Stock surrendered[27](index=27&type=chunk)[54](index=54&type=chunk)[170](index=170&type=chunk) - The company had a working capital deficit of approximately **$11.7 million** and recurring net losses, which raises substantial doubt about its ability to continue as a going concern, with its continuation dependent on raising additional capital[37](index=37&type=chunk)[38](index=38&type=chunk) - On January 9, 2025, the company's chairman exchanged **9,000 shares** of Series A Preferred Stock for **5,000 shares** of new Series D Preferred Stock[124](index=124&type=chunk)[137](index=137&type=chunk)[167](index=167&type=chunk) - The company has an outstanding litigation settlement obligation with accrued payments of **$373,450** as of March 31, 2025[202](index=202&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses KetoAir, Q1 2025 net loss of $2.5 million from professional fees, and going concern doubts due to a $11.7 million working capital deficit - The company's primary focus is on commercializing the **KetoAir™** breathalyzer device and developing its intellectual property through a partnership with MIT[214](index=214&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) - To preserve cash, the company sold its **40% interest** in Lab Services MSO on February 26, 2025, and has suspended R&D efforts related to cellular therapy[220](index=220&type=chunk)[221](index=221&type=chunk) - A significant increase in professional fees of **$1.25 million** was mainly due to consulting and legal services for a potential merger with YOOV Group Holding Limited[241](index=241&type=chunk) - Management explicitly states that there is substantial doubt about the company's ability to continue as a going concern due to a working capital deficit of **$11.7 million**, recurring losses, and a cash balance insufficient for the next 12 months[224](index=224&type=chunk)[225](index=225&type=chunk)[251](index=251&type=chunk) Key Operational Results (For the Three Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Real Property Rental Revenue | 349,800 | 314,588 | +11.2% | Increase in number of tenants | | Loss from Operations | (1,806,775) | (843,062) | +114.3% | Primarily due to higher professional fees | | Net Loss | (2,482,111) | (1,367,513) | +81.5% | Increased operating loss and other expenses | [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Avalon GloboCare Corp. is not required to provide the information for this item - The company is exempt from this disclosure requirement because it qualifies as a smaller reporting company[263](index=263&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the company's disclosure controls and procedures as of March 31, 2025, and concluded they were not effective due to un-remediated material weaknesses previously identified in the 2024 Annual Report on Form 10-K - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[266](index=266&type=chunk) - The ineffectiveness is due to material weaknesses previously reported in the Form 10-K for the year ended December 31, 2024, which have not yet been remediated[266](index=266&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[267](index=267&type=chunk) [Part II – Other Information](index=43&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to a 2019 lawsuit settlement requiring fixed and contingent payments, with $373,450 accrued as of March 31, 2025 - The company is party to a settlement agreement stemming from a 2019 lawsuit involving allegations of trade secret misappropriation against its subsidiary Genexosome and former Co-CEO Dr. Zhou[270](index=270&type=chunk) - The settlement terms include fixed payments and future profit-sharing arrangements with the Research Institute[270](index=270&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company, as a smaller reporting company, is not required to disclose material changes to its risk factors in the 10-Q, referring investors to its Annual Report on Form 10-K - The company directs investors to its most recent Form 10-K for a comprehensive discussion of risk factors[271](index=271&type=chunk) - As a smaller reporting company, disclosure of material changes to risk factors in the quarterly report is not required[272](index=272&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Q1 2025 saw the issuance of 22,278 common shares for services and 186,877 shares from cashless warrant exercises, all exempt from registration - Issued **22,278 common shares** for services rendered and to be rendered, valued at **$111,232**[274](index=274&type=chunk) - Issued **186,877 common shares** upon the cashless exercise of outstanding warrants[275](index=275&type=chunk) [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company reported no material information under this item for the quarter, and confirmed no material changes to board nominee procedures or Rule 10b5-1 trading plans - No material information was reported under Item 5(a)[279](index=279&type=chunk) - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter ended March 31, 2025[280](index=280&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all Form 10-Q exhibits, including the YOOV Group Holding merger agreement, redemption agreement, and officer certifications - Key exhibits filed include the merger agreement with YOOV Group Holding, the redemption agreement for the Lab Services MSO investment, and certifications by the CEO and CFO[284](index=284&type=chunk)

Core Viewpoint - Avalon GloboCare Corp. and YOOV Group Holding Limited have announced a proposed merger, aiming to create a publicly-traded company focused on AI-driven business automation solutions [1][2]. Company Overview - Avalon GloboCare Corp. is a commercial-stage company specializing in precision diagnostic consumer products and cellular therapy, currently marketing the KetoAir™ breathalyzer device, which is registered as a Class I medical device with the U.S. FDA [6]. - YOOV Group Holding Limited is an AI-as-a-Service platform that specializes in intelligent business automation, allowing businesses to optimize operations without extensive resources or technical expertise [4]. Merger Details - The merger involves Nexus MergerSub Limited, a wholly owned subsidiary of Avalon, merging with YOOV, with YOOV becoming a wholly owned subsidiary of Avalon [2]. - The merger is subject to stockholder approval from Avalon and the Nasdaq Stock Market's approval for YOOV's listing post-merger [3]. Additional Offerings - YOOV extends its services into financial and insurance sectors through subsidiaries YOOV Capital Limited and YOOV Insurance Services Limited, enhancing its ecosystem with credit evaluation and insurance brokerage services [5].

Core Insights - Avalon GloboCare Corp. has partnered with SpecialtyHealth, Inc. to enhance its BrAce 4 Impact Challenge, integrating SpecialtyHealth into its Zero to Keto Affiliate Marketing Program [1][6] - The KetoAir™ breathalyzer is being utilized by law enforcement as a motivational tool to support health and wellness initiatives [2][3] - The collaboration aims to promote healthier habits among first responders by managing ketone levels through the use of the KetoAir™ device [4][6] Company Overview - Avalon GloboCare Corp. is focused on developing precision diagnostic consumer products and advancing intellectual property in cellular therapy [8] - The company is currently marketing the KetoAir™ breathalyzer, which is registered as a Class I medical device with the U.S. Food and Drug Administration [6][8] - Avalon also operates in the commercial real estate sector, indicating a diversified business model [8] Product Details - The KetoAir™ breathalyzer measures breath acetone concentration, providing real-time insights into an individual's ketosis status [6] - The device is designed for ease of use, fitting into a uniform pocket for convenient monitoring by law enforcement officers [3] - The technology behind KetoAir™ leverages nano-sensor capabilities to assess ketone levels, supporting users in their weight management efforts [6]

Core Insights - Avalon GloboCare Corp. has been granted a patent for its CAR-T and CAR-NK cell technology by the China National Intellectual Property Administration, marking a significant milestone in its global intellectual property strategy [1][2][3] Intellectual Property Expansion - The newly issued Chinese patent, co-developed with Arbele Limited, enhances Avalon's intellectual property portfolio and is already protected in the U.S. and other territories under the Patent Cooperation Treaty [2] - The patent covers technology aimed at improving the expansion, manufacturing, survival, and efficacy of CAR-T and CAR-NK cells, providing 20 years of protection from the issuance date [3] Commitment to Innovation - Avalon emphasizes its commitment to advancing immunotherapy technologies, as stated by CEO David Jin, highlighting the importance of this patent in strengthening the company's position in cell-based immunotherapy [3]

Core Insights - Avalon GloboCare Corp. has partnered with Pounds Transformation Clinics to launch the "BrAce 4 Impact Challenge Series," utilizing the KetoAir™ breathalyzer as a motivational tool for weight management [1][5] - The inaugural challenge began on April 1, 2025, following a successful pilot program that concluded on March 18, 2025, demonstrating positive results for participants [2][5] - The KetoAir™ device measures breath acetone concentration, providing real-time feedback on ketosis status, which aids users in their weight loss journey [4][5] Company Overview - Avalon GloboCare Corp. is a commercial-stage company focused on developing precision diagnostic consumer products, including the KetoAir™ breathalyzer [6] - The company aims to expand its diagnostic applications of breathalyzer technology and also operates in the commercial real estate sector [6] Partnership Details - The partnership with Pounds Transformation Clinics is designed to enhance patient engagement and support through dedicated coaching and real-time tracking of ketone levels [2][5] - Dr. Charles Cavo, a key figure in the partnership, reported significant weight loss results among participants using the KetoAir™ device, indicating its effectiveness in promoting accountability and motivation [2][5] Product Information - The KetoAir™ breathalyzer is FDA registered and utilizes nano-sensor technology to assess ketosis, available for download on both Apple and Google platforms [4] - The device has been integrated into Pounds Transformation's programs, allowing patients to monitor their health and progress effectively [5]

Company Overview - Avalon GloboCare Corp. has entered into a definitive merger agreement with YOOV Group Holding Limited, a provider of AI automation solutions, with the combined company expected to operate under the name YOOV, Inc. and trade on Nasdaq under the symbol "YOOV" [1][5] - The merger is anticipated to close in the third quarter of 2025, subject to stockholder approval and other customary closing conditions [5][6] Financial Performance - YOOV reported unaudited revenue of $45.7 million and net income of $3.4 million for the calendar year 2024, marking a 59.1% increase in revenue compared to $28.7 million and a net loss of $2.4 million in 2023 [1][3] - For the fiscal year ending March 31, 2024, YOOV had unaudited revenue of $29.6 million and net income of $1.3 million, compared to $21.5 million in revenue and a net loss of $527,403 for the fiscal year ending March 31, 2023 [3] Strategic Rationale - The merger is viewed as a strategic opportunity to unlock value and drive innovation in AI-driven automation, with both companies expressing confidence in the potential for long-term shareholder value [4][6] - YOOV's AIaaS platform is designed to enhance operational efficiency and productivity for businesses of all sizes, emphasizing scalability and flexibility [2][9] Management Structure - Post-merger, Phil Wong will serve as Chairman, CEO, and President of the combined company, with a board of directors consisting of seven members, five from YOOV and two from Avalon [6]

Core Insights - Avalon GloboCare Corp. has received a Notice of Allowance from the China National Intellectual Property Administration for its patent application AVAR1901CN, marking a significant step in expanding its intellectual property into China and enhancing its global market position [1][2]. Group 1: Patent and Technology - The AVAR1901CN patent, co-developed with Arbele Limited, focuses on innovative technology aimed at improving the expansion, manufacturing, survival, and efficacy of CAR-T and CAR-Natural Killer (NK) cells [2][3]. - The bispecific anti-CD19xCD22 CAR targets both CD19 and CD22 antigens, which reduces the risk of tumor escape due to antigen loss [3][7]. - The technology induces a localized cytokine response, activating cytokines only upon tumor cell engagement, thereby enhancing CAR cell cytotoxicity, survival, and proliferation while stimulating a host anti-tumor immune response [3][7]. Group 2: Company Overview - Avalon GloboCare Corp. is dedicated to developing and delivering innovative precision diagnostics and clinical laboratory services, aiming to establish a leading role in diagnostic testing innovation [4]. - The company utilizes proprietary technology to provide precise, genetics-driven results and offers a broad portfolio of diagnostic tests, including drug testing and toxicology [4].