NASDAQ: ALBT

Consumer Health Technology Segment - Keto-Air
Breathalyzer

Overview

Our consumer health technology segment is centered
on the Keto Air breathalyzer device, a non-invasive consumer health product that allows users to determine whether they are in a state
of nutritional ketosis, and at what level, by exhaling into a compact, pen-like breathalyzer. Ketosis is a metabolic state in which the
body burns fat for fuel rather than carbohydrates, and is widely associated with low-carbohydrate and ketogenic dietary regimens. The
Keto Air device represents a meaningful improvement over prior methods of measuring ketosis, such as urine test strips or earlier-generation
breathalyzers that required cartridge replacements, offering users a convenient, reusable, and non-invasive testing experience.

We entered into an exclusive North American distribution
agreement for the Keto-Air technology and device in 2024. Pursuant to this agreement, we have exclusive distribution rights in the United
States, Canada and Mexico through July of 2025 and since that time, we continue to be the only distributor in North America. We believe
this provides us with a meaningful competitive advantage in the North American ketosis monitoring market for the duration of the agreement.

We previously had a THC breathalyzer device under development. In March
2026, we discontinued development of that product due to a lack of available funding. The discontinuation of the THC breathalyzer does
not affect our Keto Air operations or sales of the Keto Air device..

Market Opportunity

Our commercial sales strategy for Keto Air utilizes
two primary channels: social media influencer relationships and a commercial relationship with the Law Enforcement Association of America,
which was developed through one of our consultants. We believe the Law Enforcement Association of America relationship is particularly
well-suited to the Keto Air product given the relevance of metabolic health monitoring to the wellness programs of law enforcement personnel
and their families.

We are currently in an early-stage commercial
testing phase, during which we are assessing broader market demand, refining our distribution and marketing approach, and evaluating the
most effective channels for scaling sales. We are continuing to assess the future strategic direction of our Keto Air product line in
light of its commercial performance and our overall business portfolio.

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Regulatory Status

The Keto Air device bears an FDA registration
number, which is required for the commercial sale of such devices in the United States. The device is classified as a consumer product
and is not a regulated medical device requiring FDA pre-market approval, and accordingly may be sold directly to any consumer without
a prescription or other regulatory authorization. We believe this regulatory profile provides us with a straightforward commercial pathway
to market in the United States and across North America.

Artificial Intelligence Content Technology
Segment — Avalon Quantum AI, LLC / RPM Interactive

Overview

Our artificial intelligence content technology segment is operated
through Avalon Quantum AI, LLC, a wholly owned subsidiary of our company organized in the State of Nevada and formed in connection with
our acquisition of RPM Interactive, Inc. ("RPM") in December 2025. RPM merged with and into Avalon Quantum AI, LLC pursuant
to the merger, and Avalon Quantum AI, LLC continues to operate as our wholly owned subsidiary.

The RPM Platform — Phase 1

The RPM platform is an AI-driven, short-form video
generation software. In its current Phase 1 form, the platform enables content creators — with an initial focus on the podcasting
market — to input a topic of their choosing, after which the platform automatically scrapes the internet for relevant videos, identifies
the most-viewed or most-discussed content on that topic, and generates a structured, three-minute video featuring an AI-generated avatar
of the creator that replicates their voice and likeness. Each generated video consists of three segments: an introduction delivered by
the creator's AI avatar, the featured video clip sourced by the platform, and a concluding statement also delivered by the AI avatar.

The core appeal of the RPM platform to content
creators is efficiency: the software automates the time-consuming process of identifying and sourcing video content, writing scripts,
and producing recordings, enabling creators to generate daily content at scale and drive increased views, clicks, and subscriber engagement
across their platforms. We believe the demand for automated, high-quality content generation tools among the creator economy is substantial
and growing, and that the RPM platform is well-positioned to address this demand.

The platform is currently in beta testing with
a limited number of content creators. We are using this beta period to refine the platform's AI avatar generation capabilities, test the
content sourcing and curation algorithms, and gather user feedback in advance of a broader commercial launch.

Phase 2 Development

Phase 2 of the RPM platform is currently in development and is expected
to launch in Q3 of 2026. Phase 2 is expected to expand the platform's user base beyond podcasters to a substantially broader range of content creators
and marketers, including social media influencers and individuals or businesses engaged in product marketing and e-commerce. Phase 2 will
also feature a more refined AI avatar generation system, with enhanced voice and likeness replication capabilities designed to produce
higher-quality, more personalized content at scale.

We believe the expansion of the platform's addressable
market from podcasters to the broader creator and marketer economy in Phase 2 represents a significant step toward the commercial scaling
of the RPM platform, and we intend to pursue a phased commercial launch strategy following the completion of Phase 2 development.

While we continue to develop and complete Phase 2, we continue to evaluate
possible AI acquisitions that we believe could generate near-term revenue to supplement our current operations while the RPM platform
continues through its development and commercial launch phases. We have not entered into any definitive agreement with respect to any
such acquisition as of the date of this Annual Report, and there can be no assurance that we will identify, complete, or successfully
integrate any such acquisition.

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History of Operations

Wind-Down of China Operations (2022–2023)

Our initial commercial strategy was focused on
the cellular therapy sector, where we sought to advance innovative cellular therapy technologies in both the United States and China.
Beginning in 2022 and continuing through 2023, our Board of Directors determined to wind down our operations in the People's Republic
of China and to divest all assets, subsidiaries, and relationships associated with our China-based activities. This decision reflected
both the changed commercial and regulatory landscape applicable to our cellular therapy program and our inability to secure the capital
necessary to advance the program at the scale required to achieve commercial viability. By November 2022, we had ceased all active operations
in the PRC, and the wind-down was completed during 2023.

Laboratory Services Strategy (2023–2025)

In February 2023, through our subsidiary Avalon Lab, LLC, we acquired
a 40% equity interest in Laboratory Services MSO, LLC, a California-based clinical laboratory company, for total consideration of approximately
$20.7 million, comprised of approximately $9.0 million in cash, 11,000 shares of our Series B Convertible Preferred Stock, and an additional
$666,667 cash payment made in February 2024. On February 26, 2025, we exited the investment entirely pursuant to a Redemption and Abandonment
Agreement, receiving cash proceeds of $1,745,000 and surrendering our Series B Preferred Stock.

Search for Strategic Acquisitions and YOOV
Merger Agreement (2024–2025)

In early 2024, our Board made a strategic determination to focus our
acquisition efforts on YOOV Group Holding Limited ("YOOV"), a Hong Kong-based company. We conducted extensive due diligence,
engaging on-site due diligence meetings with the YOOV management team. On March 7, 2025, we entered into an Agreement and Plan of Merger
with YOOV and Nexus MergerSub Limited, pursuant to which YOOV would have become a direct, wholly owned subsidiary of our company. During
our continued review of YOOV's financial statements for the fiscal year ended December 31, 2024, our Board of Directors determined that
it was not in the best interests of our stockholders to proceed with the transaction. We terminated the merger agreement with YOOV effective
January 21, 2026.

Acquisition of RPM Interactive, Inc. and
Formation of Avalon Quantum AI, LLC (December 2025)

On December 15, 2025, we completed the acquisition of RPM Interactive,
Inc. ("RPM"), a generative artificial intelligence software company, through a subsidiary merger whereby RPM merged with and
into Avalon Quantum AI, LLC, a newly formed, wholly owned subsidiary of our company organized in the State of Nevada. Avalon Quantum AI,
LLC is the surviving entity and continues as our wholly owned subsidiary. We, as the surviving listed parent entity, continue to operate
under our existing Nasdaq listing, and neither our corporate identity, our Nasdaq listing, nor our principal executive offices were altered
as a result of the acquisition. The acquisition was effected as an all-stock transaction pursuant to which we issued 19,500 shares of
our Series E Non-Voting Convertible Preferred Stock to RPM's former stockholders at a stated value of $1,000 per share, for a total stated
purchase price of $19.5 million. Each share of Series E Preferred Stock is convertible into shares of our common stock at a conversion
price of $1.50 per share, subject to: (i) a beneficial ownership cap of 4.99% per holder; (ii) an exchange cap preventing issuance in
excess of applicable Nasdaq thresholds (the "Exchange Cap"); and (iii) stockholder approval required under Nasdaq Listing Rule
5635, which we intend to seek at our 2026 annual meeting of stockholders. The Series E Preferred Stock is non-voting prior to conversion.
In connection with the acquisition, we appointed Michael Mathews to our Board of Directors. A full description of our RPM platform and
Phase 2 development plans is set forth in Item 1.B above.

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Intellectual Property

Cellular Therapy Patent Portfolio

We hold a portfolio of patents developed during
our cellular therapy operating period. This portfolio includes patents that are co-owned with the Massachusetts Institute of Technology
("MIT"), arising from a prior joint research agreement between our company and MIT, as well as patents co-owned with Arbelli,
a Hong Kong-based company that collaborated with us during our cellular therapy research activities. We regard the MIT co-ownership as
a material component of our patent portfolio, and we disclose it accordingly.

Although we have ceased all active research and
development activities related to cellular therapy, we have made a deliberate decision to continue actively maintaining, or "prosecuting,"
these patents rather than allowing them to lapse or be abandoned. We believe the patents may have potential future value — whether
through licensing, sale, or the resumption of activity in the cellular therapy space — and we intend to continue maintaining them
for so long as we consider it commercially reasonable to do so. Any decisions regarding the licensing or enforcement of co-owned patents
are subject to the terms of our co-ownership arrangements with MIT and Arbelli, which may limit our ability to license or enforce such
patents unilaterally without the consent of our co-owners.

Artificial Intelligence Platform —
Provisional Patent Applications

In connection with our acquisition of RPM Interactive,
Inc. and the development of our generative AI content platform operated through Avalon Quantum AI, LLC, we have filed three provisional
patent applications relating to aspects of the RPM platform's technology. Provisional applications establish an early filing date and
provide a twelve-month period during which we may file corresponding non-provisional patent applications. We intend to evaluate the commercial
and strategic value of converting these provisional applications into non-provisional applications during the applicable filing window.
There can be no assurance that any patents will issue from these applications, or that any issued patents will provide meaningful competitive
protection.

General Intellectual Property Policy

Our general policy is to seek, where appropriate,
broad intellectual property protection for our current and future products, technologies, and proprietary information through a combination
of patents, trade secrets, contractual arrangements, and other available means, both in the United States and internationally. We require
all employees, consultants, advisors, and contractors to enter into confidentiality agreements that prohibit the disclosure and unauthorized
use of our confidential information and, where applicable, require the disclosure and assignment to us of ideas, developments, discoveries,
and inventions relevant to our technologies and important to our business. We also rely on trade secret protection for certain aspects
of our proprietary technology and business processes, including aspects of the RPM platform's content sourcing and curation algorithms
that we have determined are better protected as trade secrets than through patent disclosure.

Competition

We operate in two distinct and competitive markets,
each with its own competitive dynamics. We face competition in both our consumer health technology segment and our artificial intelligence
content technology segment, as described below.

Consumer Health Technology — Keto
Air Breathalyzer

The market for consumer ketosis monitoring products
is competitive and includes a range of products at varying price points and technology levels. Our primary competitors in this space include
manufacturers and distributors of urine-based ketone test strips, which represent the most widely used and lowest-cost method of ketosis
measurement and are available through a broad range of retail and online channels. We also compete with other breath-based ketone monitoring
devices, including earlier-generation breathalyzers that required consumable cartridge replacements and more recent reusable breath ketone
monitors that have been introduced to the market by consumer health technology companies.

We believe the Keto Air device competes favorably
on the basis of its reusable design, ease of use, and the convenience of non-invasive breath-based testing relative to urine strip alternatives.
As we are currently the only one selling the device in North America, we believe this provides us with a meaningful structural advantage
relative to other distributors of similar products in our territory.. However, many of our actual and potential competitors in this space
have significantly greater financial resources, brand recognition, established retail distribution networks, and marketing infrastructure
than we do, and we may not be able to compete effectively with them over the long term.

Artificial Intelligence Content Technology
— Avalon Quantum AI, LLC / RPM Platform

The market for AI-driven content creation tools
is rapidly evolving, highly competitive, and characterized by continuous technological development and the frequent entry of new participants.
We compete with a broad range of companies offering AI-powered video generation, content automation, and creator economy tools, including
both established technology companies with significant resources and early-stage companies developing competing generative AI platforms.

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Key competitive factors in this market include
the quality and realism of AI-generated content, the breadth of the platform's addressable user base, the speed and automation of content
generation workflows, the sophistication of voice and likeness replication technology, integration with major social media and content
distribution platforms, and the ability to scale rapidly to meet growing creator demand. We believe our RPM platform competes on the basis
of its end-to-end automation of the video content creation process — from topic input through content sourcing, curation, avatar
generation, and final video production — which we believe meaningfully reduces the time and technical burden on content creators
relative to less automated alternatives.

However, many of our actual and potential competitors
in the generative AI space have substantially greater financial resources, research and development capabilities, engineering talent,
data assets, and market presence than we do. Several large technology companies are actively investing in AI-generated content tools and
avatar technology, and we expect competition in this market to intensify significantly as the technology matures and the creator economy
continues to grow. Smaller and early-stage companies may also prove to be significant competitors, particularly those that secure strategic
partnerships with established platform operators or content networks.

Employees

As of March 25, 2026, we employed two full time
employees and several independent contractors. None of our employees is represented by a collective bargaining arrangement.

Regulatory Environment

Our business is subject to a variety of laws and
regulations in the United States and, to the extent we expand internationally, abroad. The principal regulatory frameworks applicable
to our two current operating segments are described below. We anticipate that the regulatory environment applicable to our business —
particularly with respect to artificial intelligence and consumer data privacy — will continue to evolve rapidly, and we intend
to monitor legislative and regulatory developments and adapt our compliance programs accordingly.

Consumer Health Technology — FDA Regulatory
Framework Applicable to Keto Air

The Keto Air breathalyzer device is subject to
the regulatory authority of the U.S. Food and Drug Administration ("FDA") under the Federal Food, Drug, and Cosmetic Act ("FD&C
Act"). The device is currently classified as a consumer product bearing an FDA registration number, which is required for the lawful
commercial sale of such devices in the United States. The Keto Air device is not classified as a regulated medical device requiring FDA
pre-market approval or clearance under Section 510(k) of the FD&C Act, and accordingly may be sold directly to consumers without a
prescription or other regulatory authorization.

We are required to maintain the device's FDA registration
on an annual basis and to comply with applicable FDA general controls, including labeling requirements and prohibitions on the promotion
of the device for uses beyond its registered classification. We do not make any medical claims with respect to the Keto Air device, and
our marketing materials are reviewed to ensure compliance with FDA labeling and advertising standards. We are also subject to applicable
Consumer Product Safety Commission regulations governing the safety of consumer products sold in the United States.

We note that the regulatory classification of
consumer health and wellness devices is subject to ongoing FDA review and interpretation, and there can be no assurance that the FDA will
not, in the future, subject the Keto Air device or similar products to more stringent regulatory requirements, including pre-market approval
or clearance obligations. Any such reclassification could materially affect our ability to sell the Keto Air device in the United States.
See Item 1A — Risk Factors for a further discussion of regulatory risks applicable to our consumer health technology segment.

Artificial Intelligence Content Technology
— AI-Specific Regulatory Landscape

The regulatory environment applicable to our artificial
intelligence content technology segment is rapidly evolving and subject to significant uncertainty. The RPM platform generates AI-driven
short-form video content featuring AI-generated avatars that replicate the voice and likeness of content creators. This functionality
implicates a range of existing and emerging regulatory frameworks, each of which is described below.

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Right of Publicity and Name and Likeness Laws

The RPM platform's AI avatar feature — which
replicates the voice and likeness of a content creator based on input data provided by or about that creator — implicates state
right of publicity laws in the United States, which protect individuals against the unauthorized commercial use of their name, image,
voice, and likeness. Right of publicity laws vary significantly across states, with particularly robust statutory frameworks in California,
New York, and Texas, among others. Several states have recently enacted or are actively considering legislation specifically addressing
the use of artificial intelligence to generate synthetic media replicating an individual's voice or likeness. We are actively monitoring
developments in this area and have structured our platform's onboarding process to require content creators to affirmatively authorize
the creation of their AI avatar as a condition of use. There can be no assurance, however, that our current practices will be sufficient
to satisfy the requirements of all applicable state laws as they continue to evolve.

Federal Trade Commission Regulation

The Federal Trade Commission ("FTC")
has broad authority to regulate unfair or deceptive acts and practices under Section 5 of the FTC Act, and has increasingly focused its
enforcement activity on the use of artificial intelligence in commercial contexts. The FTC has issued guidance requiring clear and conspicuous
disclosure of AI-generated content in advertising and commercial communications, and has signaled that the use of AI-generated endorsements,
testimonials, or representations of real individuals without adequate disclosure may constitute an unfair or deceptive trade practice.
We intend to comply with applicable FTC disclosure guidance in connection with the commercial deployment of the RPM platform and will
include appropriate disclosures in our platform's terms of service and content labeling practices.

Platform Content Policies

The RPM platform is designed to generate content
for distribution across major social media and content platforms, including YouTube, TikTok, Instagram, and others. Each of these platforms
maintains its own content policies governing the disclosure and permissibility of AI-generated content, synthetic media, and avatar-based
representations of real individuals. These policies are subject to frequent revision and vary across platforms. Failure to comply with
applicable platform content policies could result in the removal of content generated through the RPM platform, the suspension or termination
of creator accounts on those platforms, or other restrictions that could adversely affect the utility and commercial appeal of our platform
to content creators.

Evolving Federal AI Regulation

The U.S. Congress and various federal agencies
are actively considering comprehensive federal legislation and regulatory frameworks governing the development, deployment, and commercial
use of artificial intelligence technologies. While no comprehensive federal AI law has been enacted as of the date of this Annual Report,
we anticipate that federal AI regulation will develop in the near to medium term and may impose disclosure, transparency, accountability,
or other obligations on companies operating AI-powered content generation platforms such as ours. We are monitoring these legislative
and regulatory developments and intend to engage with applicable regulatory processes as they evolve.

International Regulatory Considerations

To the extent the RPM platform is accessed by
users located outside the United States, we may become subject to international AI regulatory frameworks, including the European Union
Artificial Intelligence Act (the "EU AI Act"), which entered into force in 2024 and establishes a tiered risk-based regulatory
framework for AI systems deployed in the European Union. AI systems that generate synthetic audio or video content depicting real individuals
may be subject to specific transparency and disclosure obligations under the EU AI Act. We are evaluating the extent to which our current
and planned platform activities may implicate obligations under the EU AI Act and other international AI regulatory frameworks.

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Data Privacy and Security

Our business activities involve the collection,
storage, and processing of certain personal information, including consumer data collected through Keto Air device sales and email communications,
and content creator data — including voice and likeness data — collected through the RPM platform's beta program. We are subject
to a range of federal, state, and international data privacy and security laws and regulations governing the collection, use, sharing,
protection, and retention of personal data.

At the federal level, the FTC continues to apply
its general consumer protection authority under Section 5 of the FTC Act to commercial data practices, including data security failures
and unfair or deceptive privacy practices. At the state level, we are subject to the California Consumer Privacy Act, as amended by the
California Privacy Rights Act ("CPRA"), which establishes transparency obligations, restricts certain uses of personal information
of California residents, and provides California residents with rights to access, correct, and delete their personal information and to
opt out of the sale or sharing of their personal information. Similar state privacy laws have been enacted in a growing number of states,
and we are monitoring and evaluating our compliance obligations under each applicable framework. All U.S. states have enacted data breach
notification laws requiring notification to affected individuals and state regulators in the event of certain unauthorized access to or
disclosure of personal information.

The collection and processing of voice and likeness
data through the RPM platform's avatar generation feature may implicate additional obligations under state biometric data privacy laws,
including the Illinois Biometric Information Privacy Act ("BIPA") and similar statutes in other states, which impose specific
consent, retention, and data security requirements on the collection and use of biometric identifiers, including voiceprints. We are actively
evaluating our obligations under applicable biometric data privacy laws in connection with the commercial deployment of the RPM platform.

The scope and interpretation of applicable data
privacy laws continue to evolve rapidly, and we anticipate that our compliance obligations will increase as our platform scales and as
new laws are enacted. See Item 1A — Risk Factors and Item 1C — Cybersecurity for a further discussion of data privacy and
cybersecurity risks.

Corporate and Available Information

We were incorporated in Delaware. Our website
is located at http://www.avalon-globocare.com. On our website, investors can obtain, free of charge, a copy of our Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our Code of Conduct and Business Ethics, including disclosure
related to any amendments or waivers thereto, and other reports and any amendments thereto filed or furnished pursuant to Section 13(a)
or 15(d) of the Exchange Act as soon as reasonably practicable after we file such material electronically with, or furnish it to, the
SEC. None of the information posted on our website is incorporated by reference into this Annual Report on Form 10-K. The SEC also maintains
a website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding us and
other companies that file materials with the SEC electronically.

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