What changed in this filing

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Item 1. Financial Statements

2026-08-14 compared with 2026-05-11 · 1288 added, 1101 removed, 525 unchanged (82% of the section changed)

Financial Statements.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

CURRENT ASSETS:

34 unchanged sentences

10,000,000 shares authorized;

Series C Convertible Preferred Stock, 3,077 and 3,800 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively;

Liquidation preference $ 3.077 million at March 31, 2026 Series D Convertible Preferred Stock, 5,000 shares issued and outstanding at March 31, 2026 and December 31, 2025;

Liquidation preference $ 5 million at March 31, 2026

Series E Convertible Preferred Stock, 19,500 shares issued and outstanding at March 31, 2026 and December 31, 2025;

Liquidation preference $ 19.5 million at March 31, 2026

Series C Convertible Preferred Stock, 2,550 and 3,800 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively;

Liquidation preference $ 2.55 million at June 30, 2026

Series D Convertible Preferred Stock, 0 and 5,000 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively;

Series E Convertible Preferred Stock, 19,396 and 19,500 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively;

Liquidation preference $ 19.396 million at June 30, 2026

Common stock, $ 0.0001 par value;

100,000,000 shares authorized;

8,327,076 shares issued and 8,323,609 shares outstanding at March 31, 2026;

13,680,790 shares issued and 13,677,323 shares outstanding at June 30, 2026;

4,857,476 shares issued and 4,854,009 shares outstanding at December 31, 2025

1 unchanged sentence

common stock held in treasury, at cost;

3,467 shares at March 31, 2026 and December 31, 2025

3,467 shares at June 30, 2026 and December 31, 2025

Accumulated deficit

3 unchanged sentences

Accumulated other comprehensive loss

Total Avalon GloboCare Corp.

stockholders’ equity

Total Change Agents Corporation stockholders’ equity

Noncontrolling interest

1 unchanged sentence

See accompanying notes to the condensed consolidated financial statements.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended

For the Six Months Ended

INCOME FROM EQUITY METHOD INVESTMENT - LAB SERVICES MSO

4 unchanged sentences

Amortization of intangible assets

Credit loss expense

Other general and administrative expenses

3 unchanged sentences

( 3,908,516 )

( 4,773,005 )

( 5,693,939 )

OTHER EXPENSE

Interest expense - amortization of debt discount and debt issuance costs

( 1,064,357 )

Interest expense - other

1 unchanged sentence

( 1,275,237 )

Other expense

Total Other Expense

Loss on extinguishment of debt

( 9,076,587 )

Total Other Expense, net

( 9,376,095 )

( 1,782,487 )

( 9,857,352 )

LOSS BEFORE INCOME TAXES

1 unchanged sentence

( 13,284,611 )

( 6,555,492 )

( 15,551,291 )

NET LOSS FROM CONTINUING OPERATIONS

1 unchanged sentence

( 13,284,611 )

( 6,555,492 )

( 15,551,291 )

NET LOSS FROM DISCONTINUED OPERATIONS

1 unchanged sentence

$ ( 13,458,598 )

$ ( 6,658,507 )

$ ( 15,940,709 )

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST

2 unchanged sentences

( 13,458,598 )

( 6,658,507 )

( 15,940,709 )

DEEMED CONTRIBUTION ON EXCHANGE OF EQUITY INSTRUMENTS

NET LOSS ATTRIBUTABLE TO AVALON GLOBOCARE CORP.

COMMON SHAREHOLDERS

NET LOSS ATTRIBUTABLE TO CHANGE AGENTS CORPORATION COMMON SHAREHOLDERS

$ ( 2,178,812 )

$ ( 13,458,598 )

NET LOSS PER COMMON SHARE ATTRIBUTABLE TO AVALON GLOBOCARE CORP.

COMMON SHAREHOLDERS:

$ ( 6,658,507 )

$ ( 15,778,236 )

NET LOSS PER COMMON SHARE ATTRIBUTABLE TO CHANGE AGENTS CORPORATION COMMON SHAREHOLDERS:

Basic and diluted, continuing operations

6 unchanged sentences

$ ( 13,458,598 )

$ ( 6,658,507 )

$ ( 15,940,709 )

OTHER COMPREHENSIVE (LOSS) INCOME FROM CONTINUED OPERATIONS

3 unchanged sentences

( 13,458,494 )

( 6,659,134 )

( 15,940,326 )

COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST

COMPREHENSIVE LOSS ATTRIBUTABLE TO AVALON GLOBOCARE CORP.

COMMON SHAREHOLDERS

COMPREHENSIVE LOSS ATTRIBUTABLE TO CHANGE AGENTS CORPORATION COMMON SHAREHOLDERS

$ ( 2,179,128 )

$ ( 13,458,494 )

$ ( 6,659,134 )

$ ( 15,940,326 )

See accompanying notes to the condensed consolidated financial statements.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

For the Three Months Ended March 31, 2026

GloboCare Corp.

Stockholders’ Equity

Preferred Stock

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Three and Six Months Ended June 30, 2026

Agents Corporation Stockholders’ Equity

C Preferred Stock

D Preferred Stock

E Preferred Stock

Comprehensive

Noncontrolling

January 1, 2026

Balance, January 1, 2026

$ ( 522,500 )

1 unchanged sentence

$ ( 241,402 )

of common stock upon cashless exercise of pre-funded stock warrants

of common stock upon cashless exercise of stock warrants

of Series C Preferred Stock into common stock

of convertible note payable and accrued interest into common stock

Reclassification

of derivative liability to equity

of common stock for services

of securities from the February 2026 private placement, net

Issuance of common stock upon

cashless exercise of pre-funded stock warrants

Issuance of common stock upon

cashless exercise of stock warrants

Conversion of Series C Preferred

Stock into common stock

Conversion of convertible note

payable and accrued interest into common stock

Reclassification of derivative

liability to equity

Issuance of common stock for

Sales of securities from the

February 2026 private placement, net

Sale of subsidiary

currency translation adjustment

loss for the three months ended March 31, 2026

Foreign currency translation

Net loss for the three

months ended March 31, 2026

( 4,479,695 )

March 31, 2026

Balance, March 31, 2026

( 110,413,796 )

Issuance of common stock upon

cash exercise of pre-funded stock warrants

Conversion of Series C Preferred

Stock into common stock

Conversion of Series D Preferred

Stock into common stock

( 8,837,527 )

Conversion of Series E Preferred

Stock into common stock

Issuance of common stock as

bridge loan payable commitment fee

Issuance of common stock upon

waiver to enter into note agreement

Issuance of common stock for

Stock-based compensation

Foreign currency translation

Net loss for the three

months ended June 30, 2026

( 2,178,812 )

Balance, June 30, 2026

$ 106,067,244

$ ( 522,500 )

$ ( 112,592,608 )

$ ( 242,029 )

See accompanying notes to the condensed consolidated financial statements.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

EQUITY (DEFICIT)

For the Three Months Ended March 31, 2025

GloboCare Corp.

Stockholders’ (Deficit) Equity

Preferred Stock

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN (DEFICIT) EQUITY

For the Three and Six Months Ended June 30, 2025

Agents Corporation Stockholders’ (Deficit) Equity

A Preferred Stock

B Preferred Stock

C Preferred Stock

D Preferred Stock

Comprehensive

20 unchanged sentences

( 3,891,270 )

of common stock upon cashless exercise of stock warrants

of common stock for services

Reclassification

of derivative liability to equity

compensation adjustment

of convertible note payable and accrued interest into common stock

on extinguishment of debt recognized

currency translation adjustment

loss for the three months ended June 30, 2025

( 13,458,598 )

June 30, 2025

$ ( 522,500 )

$ ( 103,613,834 )

$ ( 231,617 )

$ ( 7,112,273 )

See accompanying notes to the condensed consolidated financial statements.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

$ ( 15,551,291 )

Adjustments to reconcile net loss to

net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization of intangible assets

Credit loss provision

Amortization of operating lease right-of-use asset

3 unchanged sentences

Change in fair market value of derivative liability

Loss on extinguishment of debt

Changes in operating assets and liabilities:

8 unchanged sentences

Proceeds from sale of equity method investment

Purchase of property and equipment

Acquisition of internal-use software

NET CASH PROVIDED BY INVESTING ACTIVITIES FROM CONTINUING OPERATIONS

4 unchanged sentences

Payments of debt issuance costs

Repayments of debt

Proceeds from stock subscription liability

Advance from pending sale of subsidiary

Payments of offering costs

Proceeds from warrant exercises

Proceeds received from the February 2026 private offering

5 unchanged sentences

EFFECT OF EXCHANGE RATE ON CASH - CONTINUING OPERATIONS

NET INCREASE (DECREASE) IN CASH

NET DECREASE IN CASH

( 2,589,314 )

6 unchanged sentences

Common stock issued for accrued liabilities

Options issued for accrued liabilities

Receivable related to sale of equity method investment

9 unchanged sentences

Series C Convertible Preferred Stock converted into common stock

Series D Convertible Preferred Stock converted into common stock

Series E Convertible Preferred Stock converted into common stock

Related party gain on deconsolidation of Avalon RT 9

Deferred financing costs in accrued liabilities

Issuance of common stock upon waiver to enter into note agreement

Common stock issued as note payable commitment fee

See accompanying notes to the condensed consolidated financial statements.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION

AND NATURE OF OPERATIONS

Avalon GloboCare Corp.

(the “Company”

or “ALBT”) was incorporated under the laws of the State of Delaware on July 28, 2014 .

Through the Company’s AI-driven subsidiary, the Company is advancing next-generation agentic AI systems targeted to consumers and

small businesses, starting with an SaaS automated video production platform.

The Company is also expanding its intellectual property portfolio

in cellular therapy and generative AI publishing and software.

In addition, the Company is marketing the KetoAir™ breathalyzer device,

which is registered with the U.S.

Food and Drug Administration as a Class I medical device, and plans to pursue additional diagnostic

applications for the technology.

In addition, the Company owned and operated commercial real estate at its headquarters in Freehold, NJ

through February 2026.

On May 18, 2015, Avalon Healthcare System, Inc.

1 – ORGANIZATION AND NATURE OF OPERATIONS

Agents Corporation (f/k/a Avalon GloboCare Corp.) (the “Company” or “CHGA”) was incorporated under the laws of

the State of Delaware on July 28, 2014 .

On July 20, 2026, the Company changed its name to Change Agents Corporation.

The Company operates through two business segments:

(i) an artificial intelligence software segment, through which the Company develops and commercializes an AI-driven, short-form agentic

video generation platform and an agentic Generative Engine Optimization (GEO) search product operated by Avalon Quantum AI, LLC, a wholly

owned subsidiary formed in connection with the acquisition of RPM Interactive, Inc.

in December 2025;

and (ii) a consumer health technology

segment, through which the Company distributes the Keto Air breathalyzer device - a non-invasive consumer breathalyzer that measures ketosis

levels and is sold in North America, bearing an FDA registration number.

The Company is a technology-focused company with

a strategic focus on developing innovative Agentic AI software and consumer health products that target consumers and small businesses.

The Company recently announced the intent to expand into drone interception and surveillance AI enhanced technology solutions through

the establishment of Autonomous Air Defense Systems LLC.

The Company is actively seeking complementary bolt-on AI acquisitions that could

generate near-term revenue to supplement current operations as both segments continue to develop.

May 18, 2015, Avalon Healthcare System, Inc.

(“AHS”) was incorporated under the laws of the State of Delaware.

AHS owns 100 % of the capital stock of Avalon (Shanghai)

Healthcare Technology Co., Ltd.

(“Avalon Shanghai”), which is a wholly foreign-owned enterprise organized under the laws of

the People’s Republic of China (“PRC”).

Avalon Shanghai was incorporated on April 29, 2016, and was engaged in medical

related consulting services for customers.

Due to the winding down of the medical related consulting services in 2022, the Company decided

to cease all operations of Avalon Shanghai and no longer has any material revenues or expenses in Avalon Shanghai.

As a result, Avalon

Shanghai is no longer an operating entity.

On February 7, 2017, the Company formed Avalon

RT 9 Properties, LLC (“Avalon RT 9”), a New Jersey limited liability company.

On May 5, 2017, Avalon RT 9 purchased a real

property located in Township of Freehold, County of Monmouth, State of New Jersey, having a street address of 4400 Route 9 South, Freehold,

This property was purchased to serve as the Company’s world-wide headquarters for all corporate administration and operations.

AHS owns 100 %

of the capital stock of Avalon (Shanghai) Healthcare Technology Co., Ltd.

(“Avalon Shanghai”), which is a wholly foreign-owned

enterprise organized under the laws of the People’s Republic of China (“PRC”).

Avalon Shanghai was incorporated on

April 29, 2016, and was engaged in medical related consulting services for customers.

Due to the winding down of the medical related

consulting services in 2022, the Company decided to cease all operations of Avalon Shanghai and no longer has any material revenues or

expenses in Avalon Shanghai.

As a result, Avalon Shanghai is no longer an operating entity.

February 7, 2017, the Company formed Avalon RT 9 Properties, LLC (“Avalon RT 9”), a New Jersey limited liability company.

On May 5, 2017, Avalon RT 9 purchased a real property located in Township of Freehold, County of Monmouth, State of New Jersey, having

a street address of 4400 Route 9 South, Freehold, NJ 07728.

This property was purchased to serve as the Company’s world-wide headquarters

for all corporate administration and operations.

In addition, the property generates rental income.

Avalon RT 9 owns this office building.

Avalon RT 9’s business consists of the

ownership and operation of the income-producing real estate property in New Jersey.

On February 18, 2026, the Company sold 100 % of Avalon

RT 9 to Wenzhao Lu, the Company’s chairman of the Board of Directors.

On October 14, 2022, the Company formed a wholly

owned subsidiary, Avalon Laboratory Services, Inc.

(“Avalon Lab”), a Delaware company.

On February 9, 2023, Avalon Lab purchased

40 % of the issued and outstanding equity interests of Laboratory Services MSO, LLC, a private limited company formed under the laws of

the State of Delaware on September 6, 2019 (“Lab Services MSO”), and its subsidiaries.

Lab Services MSO, through its subsidiaries,

is engaged in providing laboratory testing services.

During the first quarter of 2025, to preserve cash, the Company entered into discussions

with Lab Services MSO for the potential redemption of our investment and on February 26, 2025, Lab Services MSO redeemed the 40 % equity

interest in Lab Services MSO held by Avalon Lab.

Accordingly, beginning in February 2025, we no longer offer laboratory services.

On May 1, 2024, the Company

formed a wholly owned subsidiary, Q&A Distribution LLC (“Q&A Distribution”), a Texas company.

Q&A Distribution

is engaged in distribution of KetoAir device.

Avalon RT 9’s business consists of the ownership and operation of the income-producing real estate property in New Jersey.

18, 2026, the Company sold 100 % of Avalon RT 9 to Wenzhao Lu, the Company’s chairman of the Board of Directors.

October 14, 2022, the Company formed a wholly owned subsidiary, Avalon Laboratory Services, Inc.

(“Avalon Lab”), a Delaware

On February 9, 2023, Avalon Lab purchased 40 % of the issued and outstanding equity interests of Laboratory Services MSO, LLC,

a private limited company formed under the laws of the State of Delaware on September 6, 2019 (“Lab Services MSO”), and its

subsidiaries.

Lab Services MSO, through its subsidiaries, is engaged in providing laboratory testing services.

During the first quarter

of 2025, to preserve cash, the Company entered into discussions with Lab Services MSO for the potential redemption of our investment

and on February 26, 2025, Lab Services MSO redeemed the 40 % equity interest in Lab Services MSO held by Avalon Lab.

Accordingly, beginning

in February 2025, we no longer offer laboratory services.

May 1, 2024, the Company formed a wholly owned subsidiary, Q&A Distribution LLC (“Q&A Distribution”), a Texas company.

Q&A Distribution is engaged in distribution of KetoAir device.

February 21, 2025, the Company formed a wholly owned subsidiary, Nexus MergerSub Limited (“Nexus”), a British Virgin Islands

(“BIV”) company.

There was no activity for the subsidiary since its incorporation through March 31, 2026.

There was no activity for the subsidiary since its incorporation through June 30, 2026.

December 5, 2025, the Company formed a wholly owned subsidiary, Avalon Quantum AI, LLC (“Avalon Quantum AI”), a Nevada company.

1 unchanged sentence

of the Agreement and Plan of Merger, dated December 12, 2025, as amended by Amendment No.

1 dated December 14, 2025 (as amended, the “Merger

Agreement”), by and among the Company, Avalon Quantum AI, LLC, a Nevada limited liability company and a wholly owned subsidiary

of the Company (the “Merger Sub”), and RPM.

Pursuant to the Merger Agreement, RPM merged with and into the Merger Sub, pursuant

to which the Merger Sub was the surviving entity and became a wholly owned subsidiary of the Company (the “Merger”).

1 dated December 14, 2025 (as amended, the

“Merger Agreement”), by and among the Company, Avalon Quantum AI, LLC, a Nevada limited liability company and a wholly owned

subsidiary of the Company (the “Merger Sub”), and RPM.

Pursuant to the Merger Agreement, RPM merged with and into the Merger

Sub, pursuant to which the Merger Sub was the surviving entity and became a wholly owned subsidiary of the Company (the “Merger”).

a result of the above Merger transaction, effective December 12, 2025, Avalon Quantum AI is advancing next-generation AI systems, including

automated video generation, and small business marketing automation solutions.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION

AND NATURE OF OPERATIONS (continued)

Details of the Company’s subsidiaries which

are included in these condensed consolidated financial statements as of March 31, 2026 are as follows:

Name of Subsidiary

Place and Date of Incorporation

Percentage of Ownership

Principal Activities

1 – ORGANIZATION AND NATURE OF OPERATIONS (continued)

of the Company’s subsidiaries which are included in these condensed consolidated financial statements as of June 30, 2026 are as

Name of Subsidiary Place and Date of

Incorporation Percentage of

Ownership Principal Activities

Avalon Healthcare System, Inc.

100 % held by

Holding company for payroll and other expenses

(“AHS”) Delaware

May 18, 2015 100 % held by

ALBT Holding company for payroll and other expenses

Avalon (Shanghai) Healthcare Technology Co., Ltd.

(“Avalon Shanghai”)

April 29, 2016

100 % held by

Not considered an operating entity

(“Avalon Shanghai”) PRC

April 29, 2016 100 % held by

AHS Not considered an operating entity

Genexosome Technologies Inc.

(“Genexosome”)

July 31, 2017

activities to report;

(“Genexosome”) Nevada

July 31, 2017 60 % held by

current activities to report;

Avalon Laboratory Services, Inc.

(“Avalon Lab”)

October 14, 2022

100 % held by

No current activities to report;

Q&A Distribution LLC (“Q&A Distribution”)

100 % held by

Distributes KetoAir device

Nexus MergerSub Limited (“Nexus”)

February 21, 2025

100 % held by

No current activities to report

Avalon Quantum AI, LLC (“Avalon Quantum AI”)

December 5, 2025

100 % held by

Is advancing next-generation agentic AI systems targeted to consumers and small businesses, starting with an SaaS automated video production

(“Avalon Lab”) Delaware

October 14, 2022 100 % held by

ALBT No current activities to report;

Distribution LLC (“Q&A Distribution”) Texas

May 1, 2024 100 % held by

ALBT Distributes KetoAir device

MergerSub Limited (“Nexus”) BVI

February 21, 2025 100 % held by

ALBT No current activities to report

Avalon Quantum AI, LLC (“Avalon Quantum AI”) Nevada

December 5, 2025 100 % held by

ALBT Advanced Agentic AI systems, including automated video generation

2 – BASIS OF PRESENTATION AND GOING CONCERN CONDITION

Basis of Presentation

These interim condensed consolidated financial

statements of the Company and its subsidiaries are unaudited.

In the opinion of management, all adjustments (consisting of normal recurring

accruals) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included.

The results reported in the condensed consolidated financial statements for any interim periods are not necessarily indicative of the

results that may be reported for the entire year.

The accompanying condensed consolidated financial statements have been prepared in accordance

with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and do not include all information and

footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in

the United States (“U.S.

The Company’s condensed consolidated financial statements include the accounts of the

Company and its subsidiaries.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally

included in the annual consolidated financial statements prepared in accordance with U.S.

of Presentation

interim condensed consolidated financial statements of the Company and its subsidiaries are unaudited.

In the opinion of management,

all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim condensed

consolidated financial statements have been included.

The results reported in the condensed consolidated financial statements for any

interim periods are not necessarily indicative of the results that may be reported for the entire year.

The accompanying condensed consolidated

financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”)

and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting

principles generally accepted in the United States (“U.S.

The Company’s condensed consolidated financial statements

include the accounts of the Company and its subsidiaries.

All significant intercompany accounts and transactions have been eliminated

in consolidation.

information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted.

These condensed

consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and

notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March

of March 31, 2026, the Company determined that certain assets that had been disposed of met the criteria for discontinued operations

presentation.

For all periods presented, the operating results associated with the assets disposed of have been reclassified into net

loss from discontinued operations in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The associated assets

and liabilities have been reflected as current and long-term assets and liabilities of discontinued operations in the Condensed Consolidated

Balance Sheets, and the cash flows from the Company’s discontinued operations are presented in the Condensed Consolidated Statements

of Cash Flows for all periods presented.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

These condensed consolidated financial statements should be read in conjunction with the Company’s

audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended

December 31, 2025 filed with the SEC on March 30, 2026.

of June 30, 2026, the Company determined that certain assets that had been disposed of met the criteria for discontinued operations presentation.

For all periods presented, the operating results associated with the assets disposed of have been reclassified into net loss from discontinued

operations in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The associated assets and liabilities have

been reflected as current and long-term assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets,

and the cash flows from the Company’s discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows

for all periods presented.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 – BASIS OF PRESENTATION AND GOING CONCERN CONDITION (continued)

Basis of Presentation (continued)

prior period balances related t o the Company’s reportable segments and discontinued operations have been reclassified to conform

of Presentation (continued)

prior period balances related to the Company’s reportable segments and discontinued operations have been reclassified to conform

to the current presentation in the financial statements and accompanying notes.

3 unchanged sentences

information on the Company’s discontinued operations.

Going Concern

condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates,

among other thin gs, the realization of assets and the satisfaction of liabilities in the normal course of business.

As reflected in the accompanying

condensed consolidated financial statements, the Company had a working capital deficit of approximately $ 2,774,000 at March 31, 2026 and

had incurred recurring net losses from continuing operations and generated negative cash flow from operating activities of continuing

operations of approximately $ 4,377,000 and $ 2,860,000 for the three months ended March 31, 2026, respectively.

The Company has a limited

operating history and its continued growth is dependent upon the continuation of generating revenue for selling of Keto Air, generating

revenue from advanced Agentic AI systems, including automated video generation and small business marketingautomation, and obtaining additional

financing to fund future obligations and pay liabilities arising from normal business operations.

In addition, the current cash balance

cannot be projected to cover the operating expenses for the next twelve months from the release date of this report.

These matters raise

substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going

concern is dependent on the Company’s ability to raise additional capital, implement its business plan, and generate significant

There are no assurances that the Company will be successful in its efforts to generate significant revenue, maintain sufficient

cash balance or report profitable operations or to continue as a going concern.

The Company plans on raising capital through the sale

of equity to implement its business plan.

However, there is no assurance these plans will be realized and that any additional financings

will be available to the Company on satisfactory terms and conditions, if any.

The accompanying condensed

consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts

or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

NOTE 3 – SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation

of condensed consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.

reflected in the accompanying condensed consolidated financial statements, the Company had a working capital deficit of approximately

$ 4,093,000 at June 30, 2026 and had incurred recurring net losses from continuing operations and generated negative cash flow from operating

activities of continuing operations of approximately $ 6,555,000 and $ 3,556,000 for the six months ended June 30, 2026, respectively.

Company has a limited operating history and its continued growth is dependent upon the continuation of generating revenue for selling

of Keto Air, generating revenue from advanced Agentic AI systems, including automated video generation and small business marketing automation,

and obtaining additional financing to fund future obligations and pay liabilities arising from normal business operations.

the current cash balance cannot be projected to cover the operating expenses for the next twelve months from the release date of this

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company

to continue as a going concern is dependent on the Company’s ability to raise additional capital, implement its business plan,

and generate significant revenue.

There are no assurances that the Company will be successful in its efforts to generate significant

revenue, maintain sufficient cash balance or report profitable operations or to continue as a going concern.

The Company plans on raising

capital through the sale of equity to implement its business plan.

However, there is no assurance these plans will be realized and that

any additional financings will be available to the Company on satisfactory terms and conditions, if any.

accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability or classification

of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as

a going concern.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

preparation of condensed consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting period.

Changes in these estimates and assumptions may

have a material impact on the condensed consolidated financial statements and accompanying notes.

Changes in these estimates and assumptions

may have a material impact on the condensed consolidated financial statements and accompanying notes.

Making estimates requires management

3 unchanged sentences

change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those

Significant estimates during the three months

ended March 31, 2026 and 2025 include the useful life of intangible assets, the assumptions used in assessing impairment of long-term

assets, the allowance for credit loss, the valuation of deferred tax assets and the associated valuation allowances, the valuation

of stock-based compensation, the valuation of Series D convertible preferred stock (“Series D Preferred Stock”), and the determination

of the fair value of the warrants.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

Accordingly, the actual results could differ significantly from

those estimates.

estimates during the three and six months ended June 30, 2026 and 2025 include the useful life of intangible assets, the assumptions

used in assessing impairment of long-term assets, the allowance for credit loss, the valuation of deferred tax assets and the associated

valuation allowances, the valuation of stock-based compensation, the valuation of Series D convertible preferred stock (“Series

D Preferred Stock”), and the determination of the fair value of the warrants.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents

March 31, 2026 and December 31, 2025, the C ompany’s cash balances by geographic area were as follows:

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and Cash Equivalents

June 30, 2026 and December 31, 2025, the Company’s cash balances by geographic area were as follows:

June 30, 2026

December 31, 2025

United States

For purposes of the condensed consolidated statements

of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less when purchased and money market

accounts to be cash equivalents.

The Company had no cash equivalents at March 31, 2026 and December 31, 2025.

Fair Value of Financial Instruments and Fair Value Measurements

The Company adopted the

guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair

value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair

value as follows:

● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available

at the measurement date.

● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted

prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable,

and inputs derived from or corroborated by observable market data.

● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what

assumptions the market participants would use in pricing the asset or liability based on the best available information.

value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,”

approximates the carrying amounts represented in the accompanying condensed consolidated financial statements, primarily due to their

short-term nature.

purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity

of three months or less when purchased and money market accounts to be cash equivalents.

The Company had no cash equivalents at June

30, 2026 and December 31, 2025.

Value of Financial Instruments and Fair Value Measurements

Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies

the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs

used in measuring fair value as follows:

1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities

available at the measurement date.

2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets,

quoted prices for identical or similar assets and liabilities in markets that are not active,

inputs other than quoted prices that are observable, and inputs derived from or corroborated

by observable market data.

3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions

on what assumptions the market participants would use in pricing the asset or liability based

on the best available information.

fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value

Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated financial statements, primarily

due to their short-term nature.

and liabilities measured at fair value on a recurring basis.

assets and liabilities are measured at fair value on a recurring basis.

These assets and liabilities are measured at fair value on an

ongoing basis.

These assets and liabilities include derivative liability.

Derivative liability is carried at fair value and measured on an ongoing

The table below reflects the activity of derivative liability measured at fair value for the three months ended March 31, 2026:

Certain assets and liabilities are measured at fair value on

a recurring basis.

These assets and liabilities are measured at fair value on an ongoing basis.

These assets and liabilities include

derivative liability.

Derivative liability is carried at fair value and measured on an ongoing basis.

The table below reflects the activity

of derivative liability measured at fair value for the six months ended June 30, 2026:

Balance of derivative liability as of January 1, 2026

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( 1,281,603 )

Balance of derivative liability as of March 31, 2026

“Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair

value (fair value option).

The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new

election date occurs.

If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be

reported in earnings at each subsequent reporting date.

The Company did not elect to apply the fair value option to any outstanding instruments.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

Balance of derivative liability as of June 30, 2026

825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities

at fair value (fair value option).

The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless

a new election date occurs.

If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should

be reported in earnings at each subsequent reporting date.

The Company did not elect to apply the fair value option to any outstanding

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (continued)

Credit Risk and Uncertainties

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Risk and Uncertainties

Company maintains a portion of its cash on deposits with bank and financial institution within the U.S.

4 unchanged sentences

The Company has not experienced

any losses in such bank accounts a nd believes it is not exposed to any risks on its cash

in bank accounts.

At March 31, 2026, the Company’s cash balances in United States bank accounts had approximately $ 506,000 in excess

of the federally-insured limits.

Sale of Subsidiary

In February 2026, the Company sold its wholly-owned

subsidiary of Avalon RT 9 to Wenzhao Lu, the Company’s chairman of the Board of Directors.

Avalon RT 9 owned and managed the corporate

office building located at 4400 Route 9 South, Freehold, NJ, which served as the Company’s headquarters and leased other space to

tenants until the sale.

Wenzhao Lu paid fair value of $ 9.0 million.

The Company recorded $ 1,861,266 to additional paid-in capital

as a result of the capital transaction with related party under applicable SEC regulations, representing the proceeds of $ 9,000,000 (which

is consisted of advance of $ 3,158,078 , satisfaction of note payable of $ 5,800,000 , and paying off due to related party of $ 41,922 on behalf

of the Company) in excess of its carrying value of $ 7,138,734 .

Capitalized Internal-use Software Costs

The Company capitalizes costs to develop or purchase

internal-use software in accordance with ASC section 350-40, Intangibles — Goodwill and Other — Internal-Use

Costs incurred to develop internal-use software are expensed as incurred during the preliminary project stage.

software development costs are capitalized upon purchase and during the application development stage, which is after:

any losses in such bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

At June 30, 2026, there were

no balances in excess of the federally-insured limits.

of Subsidiary

February 2026, the Company sold its wholly-owned subsidiary of Avalon RT 9 to Wenzhao Lu, the Company’s chairman of the Board of

Avalon RT 9 owned and managed the corporate office building located at 4400 Route 9 South, Freehold, NJ, which served as the

Company’s headquarters and leased other space to tenants until the sale.

Lu paid fair value of $ 9.0 million.

The Company recorded

$ 1,861,266 to additional paid-in capital as a result of the capital transaction with related party under applicable SEC regulations,

representing the proceeds of $ 9,000,000 (which is consisted of advance of $ 3,158,078 , satisfaction of note payable of $ 5,800,000 , and

paying off due to related party of $ 41,922 on behalf of the Company) in excess of its carrying value of $ 7,138,734 .

Company capitalizes costs to develop or purchase software and platform in accordance with ASC section 350-40, Intangibles — Goodwill

Costs incurred to develop software and platform are expensed as incurred during the preliminary project stage.

platform development costs are capitalized upon purchase and during the application development stage, which is after:

(i) the preliminary

project stage is completed;

and (ii) management authorizes and commits to funding the project and it is probable the project will be completed

and used to perform the functions intended.

Capitalization ceases at the point the software project is substantially complete and ready

for its intended use, and after all substantial testing is completed.

Upgrades and enhancements are capitalized if it is probable that

those expenditures will result in additional functionality.

Amortization is provided for on a straight-line basis over the expected useful

life of the internal-use software development costs and related upgrades and enhancements.

When existing software is replaced with new

software, the unamortized costs of the old software are expensed when the new software is ready for its intended use.

Stock Subscription Liability

On June 4, 2025, the Company entered into a subscription

agreement with an investor, whereby 141,643 shares of common stock of the Company were subscribed for at $ 3.53 per share.

31, 2026, the Company received proceeds of $ 150,000 .

As of March 31, 2026, these shares have not yet been issued and the proceeds of $ 150,000

were recorded as a share subscription liability until such time as the common shares are issued.

Per Share Data

and (ii) management authorizes and commits to funding the project and it is probable the project will be

completed and used to perform the functions intended.

Capitalization ceases at the point the software and platform project is substantially

complete and ready for its intended use, and after all substantial testing is completed.

Upgrades and enhancements are capitalized if

it is probable that those expenditures will result in additional functionality.

Amortization is provided for on a straight-line basis

over the expected useful life of the software and platform development costs and related upgrades and enhancements.

When existing software

and platform are replaced with new software and platform, the unamortized costs of the old software and platform are expensed when the

new software and platform are ready for its intended use.

Subscription Liability

June 4, 2025, the Company entered into a subscription agreement with an investor, whereby 141,643 shares of common stock of the Company

were subscribed for at $ 3.53 per share.

As of June 30, 2026, the Company received proceeds of $ 150,000 .

As of June 30, 2026, these shares

have not yet been issued and the proceeds of $ 150,000 were recorded as a share subscription liability until such time as the common shares

Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with

3 unchanged sentences

stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the

loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock

outstanding during the period.

Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of

common stock, common stock equivalents and potentially dilutive securities outstanding during each period.

The Company had $ 162,473 in

deemed contribution during the three months ended March 31, 2025, which increases the numerator in the net loss per share calculation.

For the three months ended March 31, 2026 and 2025, potentially dilutive common shares consisted of the common shares issuable upon the

conversion of convertible preferred stock and convertible notes (using the if-converted method) and exercise of common stock options and

warrants (using the treasury stock method).

Common stock equivalents are not included in the calculation of diluted net loss per share

if their effect would be anti-dilutive.

In a period in which the Company has a net loss, all potentially dilutive securities are excluded

from the computation of diluted shares outstanding as they would have had an anti-dilutive impact.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common

stock outstanding during the period.

Diluted net loss per share is computed by dividing net loss by the weighted average number of shares

of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.

The Company had $ 162,473

in deemed contribution during the six months ended June 30, 2025, which increases the numerator in the net loss per share calculation.

For the three and six months ended June 30, 2026 and 2025, potentially dilutive common shares consisted of the common shares issuable

upon the conversion of convertible preferred stock and convertible notes (using the if-converted method) and exercise of common stock

options and warrants (using the treasury stock method).

Common stock equivalents are not included in the calculation of diluted net loss

per share if their effect would be anti-dilutive.

In a period in which the Company has a net loss, all potentially dilutive securities

are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (continued)

Per Share Data (continued)

The calculation

of basic and diluted net loss per common share attributable to the Company common shareholders includes 6,032,353 and 150,000 of the pre-funded

warrants that remained outstanding as of March 31, 2026 and 2025, respectively.

The following

table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential

shares was antidilutive:

Three Months Ended

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Share Data (continued)

calculation of basic and diluted net loss per common share attributable to the Company common shareholders includes 3,491,000 and 150,000

of the pre-funded warrants that remained outstanding as of June 30, 2026 and 2025, respectively.

following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these

potential shares was antidilutive:

Three Months Ended June 30,

Six Months Ended June 30,

Options to purchase common stock

5 unchanged sentences

Potentially dilutive securities

(*) Assumed the Series C convertible preferred stock was converted

into shares of common stock of the Company at a conversion price of $ 2.41 per share.

(**) Assumed the Series D convertible

preferred stock was converted into shares of common stock of the Company at a conversion price of $ 2.41 per share.

(***) Assumed the Series E convertible

preferred stock was converted into shares of common stock of the Company at a conversion price of $ 1.50 per share.

(****) Assumed the convertible

notes were converted into shares of common stock of the Company at a conversion price of $ 11.25 per share for the three months ended

March 31, 2025.

Commitments and Contingencies

(*) Assumed the Series C convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $ 2.41 per share.

(**) Assumed the Series D convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $ 2.41 per share.

(***) Assumed the Series E convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $ 1.50 per share.

(****) Assumed the convertible notes were converted into shares of common stock of the Company at a conversion price of $ 1.00 per share for the three and six months ended June 30, 2025.

and Contingencies

the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business,

2 unchanged sentences

and the amount of the assessment can be reasonably estimated.

Segment Reporting

reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the businesses

internally and was mainly organized by services.

During the three months ended March 31, 2026, the Company was organized into one strategic

business units:

segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages

the businesses internally and was mainly organized by services.

During the three and six months ended June 30, 2026, the Company was

organized into one strategic business units:

AI generated publishing services.

During the three months ended March 31, 2025, the Company was organized into one strategic

business units:

laboratory testing services (which ended on the redemption date, February 26, 2025) — which were led by our strategic

business unit managers.

Operating segments are defined as components of an enterprise for which separate financial information is available

and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to make operating decisions, allocate

resources and assess performance.

9, 2023, the Company purchased 40 % of Lab Services MSO.

During the first quarter of 2025, to preserve cash, the Company entered into discussions

with Lab Services MSO for the potential redemption of Avalon Lab’s investment and on February 26, 2025, Lab Services MSO redeemed

the 40 % equity interest in Lab Services MSO held by Avalon Lab.

Commencing from the purchase date, February 9, 2023, through the redemption

date, February 26, 2025, the Company was active in the management of Lab Services MSO.

Beginning in February 2025, we no longer offer

laboratory services.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

During the six months ended June 30, 2025, the Company

was organized into one strategic business units:

laboratory testing services (which ended on the redemption date, February 26, 2025)

— which were led by our strategic business unit managers.

Operating segments are defined as components of an enterprise for which

separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding

how to make operating decisions, allocate resources and assess performance.

February 9, 2023, the Company purchased 40 % of Lab Services MSO.

During the first quarter of 2025, to preserve cash, the Company entered

into discussions with Lab Services MSO for the potential redemption of Avalon Lab’s investment and on February 26, 2025, Lab Services

MSO redeemed the 40 % equity interest in Lab Services MSO held by Avalon Lab.

Commencing from the purchase date, February 9, 2023, through

the redemption date, February 26, 2025, the Company was active in the management of Lab Services MSO.

Beginning in February 2025, we

no longer offer laboratory services.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (continued)

Segment Reporting

Company’s Chief Executive Officer is i ts CODM.

The Company reports operational data

to its CODM at the segment level, which he uses to evaluate performance and allocate resources based on income from equity method investment

– Lab Services MSO and AI generated publishing operating income.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reporting (continued)

Company’s Chief Executive Officer is its CODM.

The Company reports operational data to its CODM at the segment level, which he

uses to evaluate performance and allocate resources based on income from equity method investment – Lab Services MSO and AI generated

publishing operating income.

February 18, 2026, the Company and Wenzhao Lu, the Company’s chairman of the Board of Directors, entered into an Amended and Restated

4 unchanged sentences

operations in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The associated assets and liabilities have been

reflected as current and long-term assets and liabilities of discontinued operations in the

Condensed Consolidated Balance Sheets, and the cash flows from the Company’s discontinued operations are presented in the Condensed

Consolidated Statements of Cash Flows for all periods presented.

Recent Accounting Standards

In December 2023, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to

Income Tax Disclosures.

This guidance was intended to enhance the transparency and decision-usefulness of income tax disclosures.

amendments in ASU 2023-09 addressed investor requests for enhanced income tax information primarily through changes to disclosure regarding

rate reconciliation and income taxes paid both in the U.S.

and in foreign jurisdictions.

ASU 2023-09 was effective for fiscal years beginning

after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively.

Early adoption was permitted.

adoption of ASU 2023-09 did not have a material effect on the Company’s condensed consolidated financial statements and related

In November 2024, the FASB issued ASU 2024-03,

The associated assets and liabilities have

been reflected as current and long-term assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets,

and the cash flows from the Company’s discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows

for all periods presented.

Accounting Standards

November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”)

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement

Disaggregation of

Income Statement Expenses.

In January 2025, the FASB issued ASU No.

2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation

Disclosures (Subtopic 220-40), Clarifying the Effective Date.

ASU 2024-03 requires public companies to disclose, in interim and reporting

periods, additional information about certain expenses in the financial statements.

ASU 2024-03, as clarified by ASU 2025-01, is effective

for public entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

2025-01, Income Statement - Reporting Comprehensive Income - Expense

Disaggregation Disclosures (Subtopic 220-40), Clarifying the Effective Date.

ASU 2024-03 requires public companies to disclose, in interim

and reporting periods, additional information about certain expenses in the financial statements.

ASU 2024-03, as clarified by ASU 2025-01,

is effective for public entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after

December 15, 2027.

Early adoption is permitted and is effective on either a prospective basis or retrospective basis.

The Company is currently evaluating

the impact that the updated standard will have on the Company’s disclosures within the condensed consolidated financial statements.

2025, the FASB issued Accounting Standards Update No.

2025-06, “Intangibles — Goodwill and Other — Internal-Use Software

(Subtopic 350-40),” (“ASU 2025-06”).

The amendments in ASU 2025-06 remove all references to prescriptive and sequential

software development stages, and require entities to start capitalizing software costs when management has authorized and committed to

funding the software project and it is probable that the project will be completed and the software will be used to perform the function

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years,

and may be adopted on a prospective, modified, or retrospective transition approach.

The Company is

currently evaluating the impact that the updated standard will have on the Company’s disclosures within the condensed consolidated

financial statements.

September 2025, the FASB issued Accounting Standards Update No.

2025-06, “Intangibles — Goodwill and Other — Internal-Use

Software (Subtopic 350-40),” (“ASU 2025-06”).

The amendments in ASU 2025-06 remove all references to prescriptive and

sequential software development stages, and require entities to start capitalizing software costs when management has authorized and

committed to funding the software project and it is probable that the project will be completed and the software will be used to perform

the function intended.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those

fiscal years, and may be adopted on a prospective, modified, or retrospective transition approach.

Early adoption is permitted.

The Company is currently

evaluating the impact of this update on its condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025–11,

Interim Reporting (Topic 270:

is currently evaluating the impact of this update on its condensed consolidated financial statements.

December 2025, the FASB issued ASU 2025–11, Interim Reporting (Topic 270:

Narrow – Scope Improvements.

ASU 2025-11 clarifies the applicability of interim reporting guidance

and reorganizes and clarifies interim disclosure requirements under ASC topic 270, including the addition of a disclosure principal requiring

disclosure of material events occurring since the most recent annual reporting period.

ASU 2025-11 is effective for interim reporting

periods within annual periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the

impact of this standard on its condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12,

Classification Improvements.

ASU 2025–12 makes targeted amendments to various topics within the Accounting Standards Codification

intended to clarify existing guidance and correct minor inconsistencies.

ASU 2025–12 is effective for interim and annual reporting

periods beginning after December 15, 2026, with early adoption permitted.

Certain amendments require retrospective application.

is currently evaluating the impact of this standard on its condensed consolidated financial statements.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

ASU 2025-11 clarifies

the applicability of interim reporting guidance and reorganizes and clarifies interim disclosure requirements under ASC topic 270, including

the addition of a disclosure principal requiring disclosure of material events occurring since the most recent annual reporting period.

ASU 2025-11 is effective for interim reporting periods within annual periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

December 2025, the FASB issued ASU 2025-12, Classification Improvements.

ASU 2025–12 makes targeted amendments to various topics

within the Accounting Standards Codification intended to clarify existing guidance and correct minor inconsistencies.

is effective for interim and annual reporting periods beginning after December 15, 2026, with early adoption permitted.

Certain amendments

require retrospective application.

The Company is currently evaluating the impact of this standard on its condensed consolidated financial

accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have

a material impact on the condensed consolidated financial statements upon adoption.

The Company does not discuss recent pronouncements

that are not anticipated to have an impact on or are unrelated to its condensed consolidated financial condition, results of operations,

cash flows or disclosures.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (continued)

Recent Accounting Standards (continued)

Other accounting standards that have been issued

or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the condensed consolidated

financial statements upon adoption.

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or

are unrelated to its condensed consolidated financial condition, results of operations, cash flows or disclosures.

NOTE 4 – PREPAID EXPENSE

AND OTHER CURRENT ASSETS

March 31, 2026 and December 31, 2025, prep aid expense and other current assets consisted of the following:

4 – PREPAID EXPENSE AND OTHER CURRENT ASSETS

June 30, 2026 and December 31, 2025, prepaid expense and other current assets consisted of the following:

Prepaid professional fees

5 unchanged sentences

5 – DISCONTINUED OPERATIONS AND DISPOSALS

On February 18, 2026,

the Company and Wenzhao Lu, the Company’s chairman of the Board of Directors, entered into an Amended and Restated Membership Interest

Purchase Agreement (the “Amended MIPA”), pursuant to which the Company sold to Mr.

Lu 100 % of the membership interests

of Avalon RT 9 for $ 9,000,000 .

February 18, 2026, the Company and Wenzhao Lu, the Company’s chairman of the Board of Directors, entered into an Amended and Restated

Membership Interest Purchase Agreement (the “Amended MIPA”), pursuant to which the Company sold to Mr.

Lu 100 % of the membership

interests of Avalon RT 9 for $ 9,000,000 .

subsidiary comprises our real property operations segment.

4 unchanged sentences

statement for all periods prior to the Amended MIPA on February 18, 2026.

Details of the net loss from discontinued operations were as

follows for the three months ended March 31:

The table below outlines the gain on sale described above.

Carrying amount of assets and liabilities:

Rent receivable

Prepaid expense

Deferred Leasing Costs

Property and equipment, net

Investment in real estate, net

Accrued liabilities

Tenants’ security deposit

Total carrying amount (net)

Consideration from sale of subsidiary

Gain on sale of subsidiary

The Company recorded the gain on sale of subsidiary of $ 1,861,266 to

additional paid-in capital as a result of the capital transaction with related party under applicable SEC regulations.

of the net loss from discontinued operations were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

REAL PROPERTY RENTAL REVENUE

9 unchanged sentences

Interest expense - other

Other (expense) income

Total Other Expense, net

2 unchanged sentences

$ ( 173,987 )

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

$ ( 103,015 )

$ ( 389,418 )

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5 – DISCONTINUED OPERATIONS AND DISPOSALS (continued)

following table summarizes the ass ets and liabilities of the discontinued operations:

following table summarizes the assets and liabilities of the discontinued operations:

CURRENT ASSETS

15 unchanged sentences

Total Liabilities

The above tables exclude

intercompany payables that are eliminated within our condensed consolidated balance sheets.

NOTE 6 – INTANGIBLE ASSETS

Intangible assets mainly consist of the valuation

of identifiable intangible assets acquired in connection with the acquisition of RPM, representing developed technology and trade name.

The Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value the identifiable

intangible assets at the acquisition date.

The straight-line method of amortization represents the Company’s best estimate of the

distribution of the economic value of the identifiable intangible assets.

In addition, in connection with the acquisition

of RPM, the purchase price exceeded the fair value of net assets acquired by $ 12,808,197 .

The Company allocated the $ 12,808,197 excess

Goodwill is not amortized, but is tested for impairment at March 31, 2026.

On March 31, 2026, the Company assessed its goodwill

for any impairment and concluded that there were not indicators of impairment as of March 31, 2026.

the three mon ths ending March 31, 2026, the Company capitalized certain software development costs incurred amounting to $ 18,037

since the Company’s software development projects were in the application development stage.

The internal-use software has not yet

been placed in service as of March 31, 2026.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

above tables exclude intercompany payables that are eliminated within our condensed consolidated balance sheets.

6 – INTANGIBLE ASSETS

assets mainly consist of the valuation of identifiable intangible assets acquired in connection with the acquisition of RPM, representing

developed technology and trade name.

The Company uses its best estimates and assumptions as part of the purchase price allocation process

to accurately value the identifiable intangible assets at the acquisition date.

The straight-line method of amortization represents the

Company’s best estimate of the distribution of the economic value of the identifiable intangible assets.

addition, in connection with the acquisition of RPM, the purchase price exceeded the fair value of net assets acquired by $ 12,808,197 .

The Company allocated the $ 12,808,197 excess to goodwill.

Goodwill is not amortized, but is tested for impairment at June 30, 2026.

June 30, 2026, the Company assessed its goodwill for any impairment and concluded that there were not indicators of impairment as of

June 30, 2026.

the three and six months ended June 30, 2026, the Company capitalized certain software and platform development costs incurred amounting

to $ 215,412 and $ 233,449 , respectively, since the Company’s software and platform development projects were in the application

development stage.

The software and platform have not yet been placed in service as of June 30, 2026.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – INTANGIBLE ASSETS (continued)

March 31, 2026 and December 31, 2 025, intangible assets consisted of the following:

Useful Life March 31,

6 – INTANGIBLE ASSETS (continued)

June 30, 2026 and December 31, 2025, intangible assets consisted of the following:

Useful Life June 30,

2026 December 31,

1 unchanged sentence

Trade name 1 Year 22,000 22,000

Internal-use software 3 Years 18,037 -

Software and platform 3 Years 233,449 -

Goodwill 12,808,197 12,808,197

2 unchanged sentences

$ 14,073,813 $ 14,966,364

For the three months ended March 31, 2026 and

2025, amortization expense amounted to $ 563,000 and $0 , respectively.

of intangible assets, excluding internal-use software, which has not yet been placed in service as of March 31, 2026, attributable

to future periods is as follows:

For the Twelve-month Period Ending March 31:

the three months ended June 30, 2026 and 2025, amortization expense amounted to $ 563,000 and $0 , respectively.

For the six months ended

June 30, 2026 and 2025, amortization expense amounted to $ 1,126,000 and $0 , respectively.

of intangible assets, excluding software and platform, which have not yet been placed in service as of June 30, 2026, attributable to

future periods is as follows:

For the Twelve-month Period Ending June 30:

2028 and thereafter

7 – CONVERTIBLE NOTE PAYABLE

June 2024 Convertible

2024 Convertible Note

June 5, 2024, the Company entered into securities purchase agreements with Mast Hill for the issuance of 13.0 % senior secured promissory

1 unchanged sentence

of the Company’s common stock, as well as the issuance of 26,800 shares of common stock as a commitment fee and warrants for the

purchase of 146,667 shares of common stock of the C ompany.

The Company and its subsidiaries

have also entered into a security agreement, creating a security interest in certain property of the Company and its subsidiaries to secure

the prompt payment, performance and discharge in full of all of the Company’s obligations under the June 2024 Convertible Note.

Principal amount and interest under the June 2024 Convertible Note are convertible into shares of common stock of the Company at a conversion

price of $ 11.25 per share unless the Company fails to make an amortization payment when due, in which case the conversion price shall

be the lesser of $ 11.25 or the market price (as defined in the June 2024 Convertible Note).

Hill acquired the June 2024 Convertible Note with principal amount of $ 2,845,000 and

paid the purchase price of $ 2,702,750 after an original issue discount of $ 142,250 .

On June 5, 2024, the Company issued (i) a warrant to purchase 66,667 shares of

common stock with an exercise price of $ 9.75 exercisable until June 5, 2029 (“First

Warrant”), (ii) a warrant to purchase 80,000 shares of common stock with

an exercise price of $ 7.50 exercisable until June 5, 2029 (“Second Warrant”),

and (iii) 26,800 shares of common stock as a commitment fee for the purchase of

the June 2024 Convertible Note, which were earned in full as of June 5, 2024.

On June 5, 2024, the Company delivered such duly executed

June 2024 Convertible Note, warrants and common stock to Mast Hill against delivery of the purchase price.

purchase of 146,667 shares of common stock of the Company.

The Company and its subsidiaries have also entered into a security agreement,

creating a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance and discharge

in full of all of the Company’s obligations under the June 2024 Convertible Note.

Principal amount and interest under the June

2024 Convertible Note are convertible into shares of common stock of the Company at a conversion price of $ 11.25 per share unless the

Company fails to make an amortization payment when due, in which case the conversion price shall be the lesser of $ 11.25 or the market

price (as defined in the June 2024 Convertible Note).

Hill acquired the June 2024 Convertible Note with principal amount of $ 2,845,000 and paid the purchase price of $ 2,702,750 after an original

issue discount of $ 142,250 .

On June 5, 2024, the Company issued (i) a warrant to purchase 66,667 shares of common stock with an exercise

price of $ 9.75 exercisable until June 5, 2029 (“First Warrant”), (ii) a warrant to purchase 80,000 shares of common stock

with an exercise price of $ 7.50 exercisable until June 5, 2029 (“Second Warrant”), and (iii) 26,800 shares of common stock

as a commitment fee for the purchase of the June 2024 Convertible Note, which were earned in full as of June 5, 2024.

On June 5, 2024,

the Company delivered such duly executed June 2024 Convertible Note, warrants and common stock to Mast Hill against delivery of the purchase

December 15, 2024, the Company and Mast Hill entered into that certain consent, acknowledgement, and waiver agreement, pursuant to which

Mast Hill waived all amortization payments required to be made under the June 2024 Convertible Note, the Company paid a waiver fee of

Mast Hill, and the Company issued to Mast Hill a common stock purchase warrant for the purchase of up to 150,000 shares

of the Company’s common stock (“Pre-Funded Warrants”).

$ 150,000 to Mast Hill, and the Company issued to Mast Hill a common stock purchase warrant for the purchase of up to 150,000 shares of

the Company’s common stock (“Pre-Funded Warrants”).

The Pre-Funded Warrants are immediately exercisable at issuance

and until the Pre-Funded Warrants are exercised in full and have an exercise price of $ 0.01 per

May 29, 2025, the Company and Mast Hill entered into that certain waiver (the “Waiver”), pursuant to which Mast Hill

will retain all related dilutive issuance rights under Section 1.6(e) of the June 2024 Convertible Note, provided that any adjustment

under Section 1.6(e) of the June 2024 Convertible Note shall be subject to a per share floor price equal to $ 1.00 .

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

and until the Pre-Funded Warrants are exercised in full and have an exercise price of $ 0.01 per share.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7 – CONVERTIBLE NOTE PAYABLE (continued)

June 2024 Convertible

Note (continued)

In December 2024, the Company repaid June 2024

Convertible Note principal amount of $ 288,223 in cash.

2024 Convertible Note (continued)

May 29, 2025, the Company and Mast Hill entered into that certain waiver (the “Waiver”), pursuant to which Mast Hill will

retain all related dilutive issuance rights under Section 1.6(e) of the June 2024 Convertible Note, provided that any adjustment under

Section 1.6(e) of the June 2024 Convertible Note shall be subject to a per share floor price equal to $ 1.00 .

December 2024, the Company repaid June 2024 Convertible Note principal amount of $ 288,223 in cash.

the period from June 1, 2025 through December 31, 2025, Mast Hill converted its June 2024 Convertible Note in the principal amount of

$ 2,010,827 into 2,010,827 shares of common stock of the Company at a per share price of $ 1.00 .

In January 2026, Mast

Hill converted its June 2024 Convertible Note in the principal amount of $ 545,950 into 545,950 shares of common stock

of the Company at a per share price of $ 1.00 (See Note 12 - Common Shares Issued for Debt Conversion).

July 2025 Convertible Note

In January 2026, Mast Hill converted its June 2024 Convertible Note in the principal amount of $ 545,950 into 545,950 shares of common

stock of the Company at a per share price of $ 1.00 (See Note 12 - Common Shares Issued for Debt Conversion).

The conversion was done pursuant

to the terms of June 2024 Convertible Note.

Therefore, no gain or loss was recognized for the conversion.

2025 Convertible Note

July 3, 2025, the Company issued two convertible promissory notes (“July 2025 Convertible Note”) to two accredited investors

2 unchanged sentences

matures nine months from the date of issuance.

Pursuant to the terms of the July 2025 Convertible

Note, beginning six months after the issue date, the two investors may convert the outstanding principal and accrued interest into shares

of the Company’s common stock at a fixed conversion price of $ 1.00 per share, subject to certain adjustments as provided for

in the July 2025 Convertible Note for stock splits, dividends, combinations, or reclassifications.

The Company may prepay the July

2025 Convertible Note at any time without penalty.

consideration for the two investors’ purchase of the July 2025 Convertible Note, the Company issued 5,000 shares of restricted common

stock to each investor as a commitment fee.

The Company recorded a total debt discount of $ 26,800 related to the common stock issued to

the two investors, which was amortized over the term of the July 2025 Convertible Note.

to the terms of the July 2025 Convertible Note, beginning six months after the issue date, the two investors may convert the outstanding

principal and accrued interest into shares of the Company’s common stock at a fixed conversion price of $ 1.00 per share, subject

to certain adjustments as provided for in the July 2025 Convertible Note for stock splits, dividends, combinations, or reclassifications.

The Company may prepay the July 2025 Convertible Note at any time without penalty.

consideration for the two investors’ purchase of the July 2025 Convertible Note, the Company issued 5,000 shares of restricted

common stock to each investor as a commitment fee.

The Company recorded a total debt discount of $ 26,800 related to the common stock

issued to the two investors, which was amortized over the term of the July 2025 Convertible Note.

March 2026, the Company repaid in full the July 2025 Convertible Note.

convertible notes payable as of Marc h 31, 2026 and December 31, 2025 was as follows:

convertible notes payable as of June 30, 2026 and December 31, 2025 was as follows:

Principal amount

1 unchanged sentence

Convertible note payable, net

For the three months

ended March 31, 2026 and 2025, amortization of debt discount related to convertible note payable amounted to $ 8,932 and $ 283,755 ,

respectively, which have been included in interest expense — amortization of debt discount and debt issuance costs on the accompanying

condensed consolidated statements of operations and comprehensive loss.

For the three months

ended March 31, 2026 and 2025, interest expense related to convertible note payable amounted to $ 23,192 and $ 81,956 , respectively,

the three months ended June 30, 2026 and 2025, amortization of debt discount related to convertible note payable amounted to $ 0 and $ 780,602

(including the initial fair value of the Second Warrant of $ 621,353 ), respectively, which have been included in interest expense —

amortization of debt discount and debt issuance costs on the accompanying condensed consolidated statements of operations and comprehensive

For the six months ended June 30, 2026 and 2025, amortization of debt discount related to convertible note payable amounted to

$ 8,932 and $ 1,064,357 (including the initial fair value of the Second Warrant of $ 621,353 ), respectively, which have been included in

interest expense — amortization of debt discount and debt issuance costs on the accompanying condensed consolidated statements

of operations and comprehensive loss.

the three months ended June 30, 2026 and 2025, interest expense related to convertible note payable amounted to $ 0 and $ 82,755 , respectively,

which have been included in interest expense — other on the accompanying condensed consolidated statements of operations and comprehensive

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

For the six months ended June 30, 2026 and 2025, interest expense related to convertible note payable amounted to $ 23,192 and $ 164,711 ,

respectively, which have been included in interest expense — other on the accompanying condensed consolidated statements of operations

and comprehensive loss.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Company issued an unsecured bridge note with a maturity date of April 15, 2026 , in the principal sum of $ 375,000 .

The bridge note carries

The bridge note carried

an original issue discount of $ 75,000 .

1 unchanged sentence

the bridge note.

This bridge note shall not bear interest.

The Company is required to make the following payments in cash to Allen under

This bridge note did not bear interest.

The Company was required to make the following payments in cash to Allen under

the bridge note:

2 unchanged sentences

of an event of default under the bridge note, Allen may convert the bridge note into the Company’s common stock at a conversion

price equal to 50 % of the volume weighted average price of the Company’s common stock

during the five (5) trading day period prior to the respective conversion date (the “Conversion Price”), subject to adjustment

as provided in the bridge note as well as beneficial ownership limitations.

The Conversion Price may not be lower than the floor price,

which is equal to 80 % of the Minimum Price (as such term is defined by the rules and regulations of the Nasdaq Stock Market LLC, Rule

5635(d)(1)(A)) measured from the effective date of the securities purchase agreement, or such lower amount as permitted, from time to

time, by the Nasdaq Stock Market, subject to downward adjustments for share splits, share dividends, share combinations, recapitalizations

or other similar events (for the avoidance of doubt, share splits, share dividends, share combinations, recapitalizations or other similar

events shall not cause an adjustment to increase the floor price).

The Company agreed to issue 100,000 shares of its common stock as a

commitment fee to Allen pursuant to the securities purchase agreement.

The securities purchase agreement contains customary representations,

warranties, and covenants of the Company.

The issuance of such 100,000 shares as well as any conversion of the bridge note into shares

of the Company’s common stock is subject to the prior shareholder approval of the Company as is required by the applicable rules

and regulations of the Nasdaq Stock Market (or any successor entity).

On February 15, 2026,

the Company entered into Amendment (the “Note Amendment”) to unsecured bridge note.

The Note Amendment extended the time periods

under the bridge note for the first payment deadline, the second payment deadline and third payment deadline as follows:

(i) the first

payment deadline under this Note Amendment is extended to March 16, 2026 from February 15, 2026;

the second payment deadline under the

Note Amendment is extended to April 15, 2026 from March 15, 2026 and (iii) the third payment deadline under the Note Amendment is extended

to May 15, 2026 from April 15, 2026.

In connection with the issuance of the bridge

note, the Company incurred debt issuance costs of $ 18,846 which is capitalized and will be amortized into interest expense over the

term of the bridge note.

In accordance with ASC 480-10-25-14, the Company

determined that the conversion provisions contain an embedded derivative feature and the Company valued the derivative feature separately,

recording debt discount and derivative liability in accordance with the provisions of the bridge note.

However, management determined

the probability of occurrence of an event of default under the bridge note to be remote and as such the fair value of the embedded conversion

feature has been estimated to be zero.

The Company recorded

a total debt discount of $ 213,000 related to the original issue discount and common shares which the Company agreed to issue as a

commitment fee to Allen, which will be amortized over the term of the bridge note.

bridge loan payable as of March 31, 2026 an d December 31, 2025 was as follows:

price equal to 50 % of the volume weighted average price of the Company’s common stock during the five (5) trading day period prior

to the respective conversion date (the “Conversion Price”), subject to adjustment as provided in the bridge note as well

as beneficial ownership limitations.

The Conversion Price may not be lower than the floor price, which is equal to 80 % of the Minimum

Price (as such term is defined by the rules and regulations of the Nasdaq Stock Market LLC, Rule 5635(d)(1)(A)) measured from the effective

date of the securities purchase agreement, or such lower amount as permitted, from time to time, by the Nasdaq Stock Market, subject

to downward adjustments for share splits, share dividends, share combinations, recapitalizations or other similar events (for the avoidance

of doubt, share splits, share dividends, share combinations, recapitalizations or other similar events shall not cause an adjustment

to increase the floor price).

The Company agreed to issue 100,000 shares of its common stock as a commitment fee to Allen pursuant to

the securities purchase agreement.

The securities purchase agreement contains customary representations, warranties, and covenants of

The issuance of such 100,000 shares as well as any conversion of the bridge note into shares of the Company’s common

stock is subject to the prior shareholder approval of the Company as is required by the applicable rules and regulations of the Nasdaq

Stock Market (or any successor entity).

February 15, 2026, the Company entered into Amendment (the “Note Amendment”) to unsecured bridge note.

The Note Amendment

extended the time periods under the bridge note for the first payment deadline, the second payment deadline and third payment deadline

(i) the first payment deadline under this Note Amendment is extended to March 16, 2026 from February 15, 2026;

payment deadline under the Note Amendment is extended to April 15, 2026 from March 15, 2026 and (iii) the third payment deadline under

the Note Amendment is extended to May 15, 2026 from April 15, 2026.

connection with the issuance of the bridge note, the Company incurred debt issuance costs of $ 18,846 which was capitalized and had been

amortized into interest expense over the term of the bridge note.

accordance with ASC 480-10-25-14, the Company determined that the conversion provisions contain an embedded derivative feature and the

Company valued the derivative feature separately, recording debt discount and derivative liability in accordance with the provisions

of the bridge note.

However, management determined the probability of occurrence of an event of default under the bridge note was remote

and as such the fair value of the embedded conversion feature had been estimated to be zero.

Company recorded a total debt discount of $ 213,000 related to the original issue discount and common shares which the Company agreed

to issue as a commitment fee to Allen, which was amortized over the term of the bridge note.

March and April 2026, the Company repaid in full the bridge note.

bridge loan payable as of June 30, 2026 and December 31, 2025 was as follows:

Principal amount

2 unchanged sentences

Convertible note payable, net

the three months ended March 31, 2026, amortization of debt discount and debt issuance costs related to the bridge note amounted to $ 168,459

which have been included in interest expense — amortization of debt discount and debt issuance

cost on the accompanying condensed consolidated statements of operations and comprehensive loss.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

the three months ended June 30, 2026, amortization of debt discount and debt issuance costs related to the bridge note amounted to $ 9,200

which have been included in interest expense — amortization of debt discount and debt issuance cost on the accompanying condensed

consolidated statements of operations and comprehensive loss.

the six months ended June 30, 2026, amortization of debt discount and debt issuance costs related to the bridge note amounted to $ 177,659

which have been included in interest expense — amortization of debt discount and debt issuance cost on the accompanying condensed

consolidated statements of operations and comprehensive loss.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – NOTE PAYABLE, NET

9 – NOTE PAYABLE, NET

February 2026, the Company entered into two securities purchase agreements with Vanquish Funding Group, Inc., pursuant to which the Company

issued to the investor two promissory notes in the princ ipal amount of $ 467,820 , for a purchase price of $ 414,000 , reflecting an

original issue discount of $ 53,820 (the “Note”).

The Note carries a one-time interest charge of $ 56,138 and is repayable in

seven monthly payments beginning August 15, 2026 in the amount of $ 288,176 and for the next 6 months thereafter in the amount of $ 39,297 .

The Note matures on February 15, 2027 .

In connection with the issuance of the two promissory notes, the Company incurred debt issuance

costs of $ 34,000 which is capitalized and will be amortized into interest expense over the term of the two promissory notes.

issued to the investor two promissory notes in the principal amount of $ 467,820 , for a purchase price of $ 414,000 , reflecting an original

issue discount of $ 53,820 (the “Note”).

The Note carries a one-time interest charge of $ 56,138 and is repayable in seven

monthly payments beginning August 15, 2026 in the amount of $ 288,176 and for the next 6 months thereafter in the amount of $ 39,297 .

Note matures on February 15, 2027 .

In connection with the issuance of the two promissory notes, the Company incurred debt issuance costs

of $ 34,000 which is capitalized and will be amortized into interest expense over the term of the two promissory notes.

March 25, 2026, the Company entered into a Business Loan and Security Agreement (the “Business Loan Agreement”) with Agile

7 unchanged sentences

with the Business Loan, the Company issued the investor a Confessed Judgement Secured Promissory Note (the “Secured Note”)

dated March 25, 2026 in t he amount $ 787,500 with a maturity date of October 22, 2026 .

The note payable as of March 31, 2026 is as follows:

dated March 25, 2026 in the amount $ 787,500 with a maturity date of October 22, 2026 .

In the second quarter of 2026, the Company made

repayments in 13 weekly installments of $ 37,800 , representing principal of $ 26,250 and interest of $ 11,550 , to Agile Lending LLC.

June 30, 2026, the Company entered into a limited one-time waiver and consent with Agile Lending LLC, pursuant to which the Company obtained

a limited, one-time waiver and consent permitting the Company to incur new preferred stock and the Company agreed to issue 200,000 shares

of its common stock to Agile Lending LLC (See Note 12 – Common Shares Issued upon Waiver to Enter into Note Agreement).

recorded debt discount of $ 58,200 related to the 200,000 common shares issued to Agile Lending LLC, which will be amortized over the

rest term of the Business Loan.

June 1, 2026, the Company issued promissory note to Dune Equity Holdings LLC (“Dune”) in the principal amount of $ 250,000

(inclusive of a $ 50,000 original issuance discount) (the “Dune Note”) for gross proceeds of $ 200,000 .

The Dune Note matures

on December 1, 2026 and has a one-time interest charge equal to 18.75 % of the principal amount, or $ 46,875 , payable in cash.

Any principal

or accrued but unpaid interest on the Dune Note which is not paid when due shall accrue interest at a rate of 10 % per annum (the “Dune

Default Interest”).

The principal amount of the Dune Note together with accrued but unpaid interest shall be paid as follows:

$ 62,500 shall be paid on each of September 1, 2026, October 1, 2026 and November 1, 2026 and (ii) the total remaining balance of the

Dune Note shall be paid on December 1, 2026.

June 2, 2026, the Company issued promissory note to FirstFire Global Opportunities Fund, LLC (“FirstFire”) in the principal

amount of $ 250,000 (inclusive of a $ 50,000 original issuance discount) (the “FirstFire Note”) for gross proceeds of $ 200,000 .

The FirstFire Note matures on December 1, 2026 and has a one-time interest charge equal to 18.75 % of the principal amount, or $ 46,875 ,

payable in cash.

Any principal or accrued but unpaid interest on the FirstFire Note which is not paid when due shall accrue interest

at a rate of 10 % per annum (the “FirstFire Default Interest”).

The principal amount of the FirstFire Note together with accrued

but unpaid interest shall be paid as follows:

(i) $ 62,500 shall be paid on each of September 1, 2026, October 1, 2026 and November 1,

2026 and (ii) the total remaining balance of the FirstFire Note shall be paid on December 1, 2026.

note payable as of June 30, 2026 is as follows:

Principal amount

2 unchanged sentences

Note payable, net

For the three months ended March 31, 2026, amortization

of debt discount and debt issuance costs related to note payable amounted to $ 12,026 which have been included in interest expense —

amortization of debt discount and debt issuance cost on the accompanying condensed consolidated statements of operations and comprehensive

For the three months ended March 31, 2026, interest

expense related to note payable amounted to $ 18,337 which have been included in interest expense - other on the accompanying condensed

the three months ended June 30, 2026, amortization of debt discount and debt issuance costs related to note payable amounted to $ 56,124

which have been included in interest expense — amortization of debt discount and debt issuance cost on the accompanying condensed

consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2026, amortization of debt discount and

debt issuance costs related to note payable amounted to $ 68,150 which have been included in interest expense — amortization of

debt discount and debt issuance cost on the accompanying condensed consolidated statements of operations and comprehensive loss.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9 – NOTE PAYABLE, NET (continued)

the three months ended June 30, 2026, interest expense related to note payable amounted to $ 177,763 which have been included in interest

expense - other on the accompanying condensed consolidated statements of operations and comprehensive loss.

For the six months ended

June 30, 2026, interest expense related to note payable amounted to $ 196,100 which have been included in interest expense - other on

the accompanying condensed consolidated statements of operations and comprehensive loss.

10 – DERIVATIVE LIABILITY

On May 23, 2023, the Company issued 667 warrants

with an exercise price of $ 67.50 exercisable until May 23, 2028 to a third party as a finder’s fee.

Upon evaluation, the warrants

meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances.

May 23, 2023, the Company issued 667 warrants with an exercise price of $ 67.50 exercisable until May 23, 2028 to a third party as a finder’s

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash

settlement under certain circumstances.

Accordingly, the fair value of the 667 warrants was classified as a derivative liability on May

On March 31, 2026,

the estimated fair value of the 667 warrants was $ 16 .

The estimated fair value of the warrants was computed as of March 31, 2026 using

Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.53 , volatility of 137.76 %, risk-free rate of 3.79 %,

annual dividend yield of 0 % and expected life of 2.1 years.

July 6, 2023, the Company issued 222 warrants with an exercise price of $ 67.50 exercisable until July 6, 2028 to

a third party as a finder’s fee.

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the

Company cannot avoid a net cash settlement under certain circumstances.

Accordingly, the fair value of the 222 warrants was

classified as a derivative liability on July 6, 2023.

On March 31, 2026, the estimated fair value of the 222 warrants was $ 5 .

estimated fair value of the warrants was computed as of March 31, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.53 , volatility of 133.26 %, risk-free rate of 3.79 %, annual dividend yield of 0 % and expected life of 2.3 years.

On October 9, 2023, the Company issued 560 warrants

with an exercise price of $ 37.50 exercisable until October 9, 2028 to a third party as a finder’s fee.

Upon evaluation, the

warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain

circumstances.

Accordingly, the fair value of the 560 warrants was classified as a derivative liability on October 9, 2023.

On March 31, 2026, the estimated fair value of the 560 warrants was $ 26 .

The estimated fair value of the warrants was computed as of March

31, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.53 , volatility of 129.25 %, risk-free

rate of 3.79 %, annual dividend yield of 0 % and expected life of 2.5 years.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10 – DERIVATIVE LIABILITY (continued)

On March 7, 2024, the Company issued 700 warrants

with an exercise price of $ 30.00 exercisable until March 7, 2029 to a third party as a finder’s fee.

Upon evaluation, the warrants

meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances.

Accordingly, the fair value of the 700 warrants was classified as a derivative liability on March 7, 2024.

On March 31, 2026,

the estimated fair value of the 700 warrants was $ 43 .

The estimated fair value of the warrants was computed as of March 31, 2026 using

Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.53 , volatility of 122.40 %, risk-free rate of 3.81 %,

annual dividend yield of 0 % and expected life of 2.9 years.

On June 5, 2024, the Company issued 5,333 warrants

with an exercise price of $ 9.75 exercisable until June 5, 2029 to a third party as a finder’s fee.

Upon evaluation, the warrants

meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances.

Accordingly, the fair value of the 5,333 warrants was classified as a derivative liability on June 5, 2024.

On March 31, 2026

the estimated fair value of the 5,333 warrants was $ 750 .

The estimated fair value of the warrants was computed as of March 31, 2026 using

Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.53 , volatility of 120.02 %, risk-free rate of 3.81 %,

annual dividend yield of 0 % and expected life of 3.2 years.

June 5, 2024, the Company issued 80,000 warrants with an exercise price of $ 7.50 exercisable until June 5, 2029 to Mast Hill (See

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net

cash settlement under certain circumstances.

Accordingly, the fair value of the 80,000 warrants was classified as a derivative liability

on June 5, 2024.

On June 30, 2026, the estimated fair value of the 667 warrants was $ 3 .

The estimated fair value of the warrants was computed

as of June 30, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.29 , volatility of 138.06 %,

risk-free rate of 4.14 %, annual dividend yield of 0 % and expected life of 1.9 years.

July 6, 2023, the Company issued 222 warrants with an exercise price of $ 67.50 exercisable until July 6, 2028 to a third party as a finder’s

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash

settlement under certain circumstances.

Accordingly, the fair value of the 222 warrants was classified as a derivative liability on July

On June 30, 2026, the estimated fair value of the 222 warrants was $ 1 .

The estimated fair value of the warrants was computed

as of June 30, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.29 , volatility of 135.73 %,

risk-free rate of 4.14 %, annual dividend yield of 0 % and expected life of 2.0 years.

October 9, 2023, the Company issued 560 warrants with an exercise price of $ 37.50 exercisable until October 9, 2028 to a third party

as a finder’s fee.

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot

avoid a net cash settlement under certain circumstances.

Accordingly, the fair value of the 560 warrants was classified as a derivative

liability on October 9, 2023.

On June 30, 2026, the estimated fair value of the 560 warrants was $ 8 .

The estimated fair value of the

warrants was computed as of June 30, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.29 ,

volatility of 135.24 %, risk-free rate of 4.14 %, annual dividend yield of 0 % and expected life of 2.3 years.

March 7, 2024, the Company issued 700 warrants with an exercise price of $ 30.00 exercisable until March 7, 2029 to a third party as a

finder’s fee.

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot

avoid a net cash settlement under certain circumstances.

Accordingly, the fair value of the 700 warrants was classified as a derivative

liability on March 7, 2024.

On June 30, 2026, the estimated fair value of the 700 warrants was $ 14 .

The estimated fair value of the warrants

was computed as of June 30, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.29 , volatility

of 126.53 %, risk-free rate of 4.15 %, annual dividend yield of 0 % and expected life of 2.7 years.

June 5, 2024, the Company issued 5,333 warrants with an exercise price of $ 9.75 exercisable until June 5, 2029 to a third party as a

finder’s fee.

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot

avoid a net cash settlement under certain circumstances.

Accordingly, the fair value of the 5,333 warrants was classified as a derivative

liability on June 5, 2024.

On June 30, 2026 the estimated fair value of the 5,333 warrants was $ 263 .

The estimated fair value of the

warrants was computed as of June 30, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.29 ,

volatility of 122.18 %, risk-free rate of 4.15 %, annual dividend yield of 0 % and expected life of 2.9 years.

June 5, 2024, the Company issued 80,000 warrants with an exercise price of $ 7.50 exercisable until June 5, 2029 to Mast Hill (See Note

Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash

settlement under certain circumstances.

Accordingly, the fair value of the 80,000 warrants was classified as a derivative liability on

June 5, 2024.

On February 11, 2026, the exercise price was adjusted to $ 1.00 and number of shares underlying was adjusted to 600,000

2 unchanged sentences

adjusted to 1,558,543 based on certain specified events.

On February 19, 2026, 408,332 warrants

were cashless exercised.

February 24, 2026, the exercise price was adjusted to $ 0.32 and number of shares underlying was adjusted to 1,405,721 based on certain

specified events.

On February 19, 2026, 408,332 warrants were cashless exercised.

On February 26, 2026, 1,020,710 warrants were cashless

On March 31, 2026, the exercise price was

adjusted to $ 0.37 and number of shares underlying was adjusted to 68,985 based on certain specified events.

On March 31, 2026,

the estimated fair value of the remaining 68,985 warrants was $ 28,602 .

The estimated fair value of the warrants was computed as of March

31, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.53 , volatility of 120.02 %, risk-free

rate of 3.81 %, annual dividend yield of 0 % and expected life of 3.2 years.

Change in fair value of the derivative liability

are included as a component of total other expenses in the accompanying condensed consolidated statements of operations and comprehensive

The changes to the derivative liability resulted in an increase of $ 1,276,889 and $ 114,360 in the derivative liability and

the corresponding increase in other expense as a loss for the three months ended March 31, 2026 and 2025, respectively.

NOTE 11 – RELATED PARTY TRANSACTIONS

Provided by Related Party

From time to time, Wilbert Tauzin, a former

director of the Company, and his son provide consulting services to the Company.

As compensation for professional services provided, the

Company recognized consulting expenses of $ 15,000 and $ 15,597 for the three months ended March 31, 2026 and 2025, respectively,

which have been included in professional fees on the accompanying condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2026 and December 31, 2025, the accrued and unpaid services charge related to this director’s son amounted to $ 0

and $ 6,835 , respectively, which have been included in accrued professional fees on the accompanying condensed consolidated balance sheets.

Accrued Liabilities and Other Payables –

Related Parties

In 2017, the Company acquired Genexosome’s

subsidiary, which was dissolved in 2022, for a cash payment of $ 450,000 .

As of both March 31, 2026 and December 31, 2025, the unpaid acquisition

consideration of $ 100,000 , was payable to Dr.

Yu Zhou, former director and former co-chief executive officer and 40 % owner of Genexosome,

and has been included in accrued liabilities and other payables — related party on the accompanying condensed consolidated balance

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

24, 2026, the exercise price was adjusted to $ 0.32 and number of shares underlying was adjusted to 1,405,721 based on certain specified

On February 24, 2026, 304,529 warrants were cashless exercised.

On February 26, 2026, 1,020,710 warrants were cashless exercised.

On June 30, 2026, the exercise price was adjusted to $ 0.21 and number of shares underlying was adjusted to 122,874 based on certain specified

On June 30, 2026, the estimated fair value of the remaining 122,874 warrants was $ 27,501 .

The estimated fair value of the warrants

was computed as of June 30, 2026 using Black-Scholes option-pricing model, with the following assumptions:

stock price of $ 0.29 , volatility

of 122.18 %, risk-free rate of 4.15 %, annual dividend yield of 0 % and expected life of 2.9 years .

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – RELATED PARTY TRANSACTIONS

Membership Interest

Purchase Agreement

On November 17, 2023, the Company entered into

a Membership Interest Purchase Agreement with Mr.

Lu, the Company’s chairman of the Board of Directors, pursuant to which (i) Mr.

Lu will acquire from the Company 30 % of the total outstanding membership interests of Avalon RT 9, a wholly owned subsidiary of the

Company, for a cash purchase price of $ 3,000,000 (the “Acquisition”), and (ii) for a period of twelve months following

the closing of the Acquisition, Mr.

Lu shall have the option to purchase from the Company up to an additional 70 % of the outstanding

membership interests of Avalon RT 9 for a purchase price of up to $ 7,000,000 (the “Option”), subject to the terms and

conditions of a membership interest purchase agreement to be negotiated and entered into between Mr.

Lu and the Company at such time that

10 – DERIVATIVE LIABILITY (continued)

in fair value of the derivative liability are included as a component of total other expenses in the accompanying condensed consolidated

statements of operations and comprehensive loss.

The changes to the derivative liability resulted in a decrease of $ 1,652 and $ 561,176

in the derivative liability and the corresponding increase in other income as a gain for the three months ended June 30, 2026 and 2025,

respectively.

The changes to the derivative liability resulted in an increase of $ 1,275,237 and a decrease of $ 446,816 in the derivative

liability and the corresponding increase in other expense as a loss for the six months ended June 30, 2026 and increase in other income

as a gain for the six months ended June 30, 2025, respectively.

11 – RELATED PARTY TRANSACTIONS

Provided by Related Party

time to time, Wilbert Tauzin, a former director of the Company, and his son provide consulting services to the Company.

As compensation

for professional services provided, the Company recognized consulting expenses of $ 40,382 and $ 15,597 for the three months ended June

30, 2026 and 2025, respectively, which have been included in professional fees on the accompanying condensed consolidated statements

of operations and comprehensive loss.

As compensation for professional services provided, the Company recognized consulting expenses

of $ 55,382 and $ 30,794 for the six months ended June 30, 2026 and 2025, respectively, which have been included in professional fees on

the accompanying condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026 and December 31, 2025, the

accrued and unpaid services charge related to this director’s son amounted to $ 0 and $ 6,835 , respectively, which have been included

in accrued professional fees on the accompanying condensed consolidated balance sheets.

Liabilities and Other Payables – Related Parties

2017, the Company acquired Genexosome’s subsidiary, which was dissolved in 2022, for a cash payment of $ 450,000 .

As of both June

30, 2026 and December 31, 2025, the unpaid acquisition consideration of $ 100,000 , was payable to Dr.

Yu Zhou, former director and former

co-chief executive officer and 40 % owner of Genexosome, and has been included in accrued liabilities and other payables — related

party on the accompanying condensed consolidated balance sheets.

Interest Purchase Agreement

November 17, 2023, the Company entered into a Membership Interest Purchase Agreement with Mr.

Lu, the Company’s chairman of the

Board of Directors, pursuant to which (i) Mr.

Lu will acquire from the Company 30 % of the total outstanding membership interests of Avalon

RT 9, a wholly owned subsidiary of the Company, for a cash purchase price of $ 3,000,000 (the “Acquisition”), and (ii) for

a period of twelve months following the closing of the Acquisition, Mr.

Lu shall have the option to purchase from the Company up to an

additional 70 % of the outstanding membership interests of Avalon RT 9 for a purchase price of up to $ 7,000,000 (the “Option”),

subject to the terms and conditions of a membership interest purchase agreement to be negotiated and entered into between Mr.

the Company at such time that Mr.

Lu desires to exercise the Option.

8 unchanged sentences

Lu as of December 31, 2025, which was recorded as advance from pending sale of subsidiary –

related party on the accompanyi ng condensed consolidated balance sheets.

The advance of $ 3,158,078 was applied to the proceeds

of $ 9.0 million on February 18, 2026.

Therefore, as of March 31, 2026, the advance from pending sale of subsidiary – related party

Exchange Agreement

On February 18, 2926, the Company entered into an Exchange Agreement with its Chairman, Wenzhao Lu, under which it agreed

Lu 2,074,689 shares of its common stock (the “Exchange Shares”) for the 5,000 shares of Series

D Preferred Stock held by him, following shareholder approval.

The Exchange Shares was equal to the amount of shares of common stock Mr.

Lu would have been entitled to receive upon conversion of his Series D Preferred Stock.

related party on the accompanying condensed consolidated balance sheets.

The advance of $ 3,158,078 was applied to the proceeds of $ 9.0

million on February 18, 2026.

Therefore, as of June 30, 2026, the advance from pending sale of subsidiary – related party was $0 .

February 18, 2026, the Company entered into an Exchange Agreement with its Chairman, Wenzhao Lu, under which it agreed to issue Mr.

Lu 2,074,689 shares

of its common stock (the “Exchange Shares”) for the 5,000 shares of Series D Preferred Stock held by him, following

shareholder approval.

The Exchange Shares was equal to the total of shares of common stock Mr.

Lu would have been entitled to receive

upon conversion of his Series D Preferred Stock.

The Exchange Shares were issued to Mr.

6, 2026 following shareholder approval at which time the shares of Series D Preferred Stock were cancelled.

NOTE 12 – EQUITY

Company is authorized to issue an aggregate of 100,000,000 shares

of common stock and 10,000,000 shares of “blank check” preferred stock.

Series C Convertible

Lu on May 6, 2026 following shareholder approval

at which time the shares of Series D Preferred Stock were cancelled.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11 – RELATED PARTY TRANSACTIONS (continued)

Space from Related Party

on March 1, 2026, the Company leases office space from Avalon RT 9, which is wholly owned by Wenzhao Lu, the Company’s chairman

of the Board of Directors.

For the three and six months ended June 30, 2026, rent expense related to office leased from Avalon RT 9 amounted

$ 1,000 and $ 4,000 , respectively, which have been included in general and administrative - other on the accompanying condensed consolidated

statements of operations and comprehensive loss.

Company is authorized to issue an aggregate of 100,000,000 shares of common stock and 10,000,000 shares of “blank check”

preferred stock.

C Convertible Preferred Stock

December 13, 2024, the Company filed a certificate of designations of preferences, rights, and limitations of Series C Preferred Stock

(the “Series C Certificate of Designations”) with the Department of State, Division of Corporations, of the State of Delaware,

which provides for the designation of 10,000 shares

of Series C Preferred Stock of the Company, par value $ 0.0001 per share.

which provides for the designation of 10,000 shares of Series C Preferred Stock of the Company, par value $ 0.0001 per share.

of Series C Preferred Stock has a stated value of $ 1,000 .

The Series C Preferred Stock shall rank (i) senior

to the Company’s common stock and any other class or series of capital stock of the Company created hereafter, the terms of which

specifically provide that such class or series shall rank junior to the Series C Preferred Stock, (ii) pari passu with any class or series

of capital stock of the Company created hereafter specifically ranking, by its terms, on par with the Series C Preferred Stock, (iii)

pari passu with Series B Preferred Stock of the Company with respect to its rights, preferences and restrictions, and (iv) subordinate

to the Series A Preferred Stock of the Company.

Holders of the Series C Preferred Stock shall

be entitled to receive, and the Company shall pay, dividends on shares of Series C Preferred Stock equal (on an as-if-converted-to-common-stock

basis, disregarding for such purpose any conversion limitations hereunder) to and in the same form as dividends actually paid on shares

of the common stock when, as and if such dividends are paid on shares of the common stock.

Holders of the Series C Preferred Stock have no

voting power except as otherwise required by the Delaware General Corporation Law.

Upon any liquidation, dissolution or winding-up

of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of the Series C Preferred Stock shall be entitled

to receive out of the assets available for distribution to stockholders, (i) after and subject to the payment in full of all amounts required

to be distributed to the holders of another class or series of stock of the Company ranking on liquidation prior and in preference to

the Series C Preferred Stock, including the Series A Preferred Stock, (ii) ratably with any class or series of stock ranking on liquidation

on parity with the Series C Preferred Stock and (iii) in preference and priority to the holders of the shares of common stock, an amount

equal to 100 % of the Stated Value of the Series C Preferred Stock, in proportion to the full and preferential amount that all shares

of the Series C Preferred Stock are entitled to receive.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – EQUITY (continued)

Series C Convertible

Preferred Stock (continued)

Series C Preferred Stock shall rank (i) senior to the Company’s common stock and any other class or series of capital stock of

the Company created hereafter, the terms of which specifically provide that such class or series shall rank junior to the Series C Preferred

Stock, (ii) pari passu with any class or series of capital stock of the Company created hereafter specifically ranking, by its terms,

on par with the Series C Preferred Stock, (iii) pari passu with Series B Preferred Stock of the Company with respect to its rights, preferences

and restrictions, and (iv) subordinate to the Series A Preferred Stock of the Company.

of the Series C Preferred Stock shall be entitled to receive, and the Company shall pay, dividends on shares of Series C Preferred Stock

equal (on an as-if-converted-to-common-stock basis, disregarding for such purpose any conversion limitations hereunder) to and in the

same form as dividends actually paid on shares of the common stock when, as and if such dividends are paid on shares of the common stock.

of the Series C Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law.

any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders

of the Series C Preferred Stock shall be entitled to receive out of the assets available for distribution to stockholders, (i) after

and subject to the payment in full of all amounts required to be distributed to the holders of another class or series of stock of the

Company ranking on liquidation prior and in preference to the Series C Preferred Stock, including the Series A Preferred Stock, (ii)

ratably with any class or series of stock ranking on liquidation on parity with the Series C Preferred Stock and (iii) in preference

and priority to the holders of the shares of common stock, an amount equal to 100 % of the Stated Value of the Series C Preferred Stock,

in proportion to the full and preferential amount that all shares of the Series C Preferred Stock are entitled to receive.

share of Series C Preferred Stock shall be convertible into common stock (the “Series C Conversion Shares”) at a conversion

per share equal to $ 2.41 , at the option of the holder, at any time after the later of (i) the date of the shareholder approval of the

issuance of the Series C Conversion Shares pursuant to the rules of the Nasdaq Stock Market and (ii) the one year anniversary of the date

of the first issuance of any shares of the Series C Preferred Stock.

In addition, the holder shall not have the right to convert any portion

of the Series C Preferred Stock if, after giving effect to the conversion, such holder (together with its affiliates) would beneficially

own in excess of 19.99 % of the number of shares of the common stock outstanding immediately after giving effect to the issuance of

the respective Series C Conversion Shares.

On May 29, 2025, the Company filed a certificate of amendment to the Series C Certificate of

Designations, pursuant to which the be neficial ownership limitation of 19.99 % was amended to 4.99 %.

In March 2026, 723 shares of Series C Preferred

Stock were converted into 300,000 shares of the Company’s common stock.

As of March 31, 2026 and December 31, 2025, 3,077

and 3,800 shares of Series C Preferred Stock were issued and outstanding, respectively.

Series D Convertible

Preferred Stock

On January 6, 2025, the Company filed a certificate of

designations of preferences, rights, and limitations of Series D Preferred Stock (the “Series D Certificate of Designations”)

with the Department of State, Division of Corporations, of the State of Delaware, which provides for the designation of 5,000 shares

of Series D Preferred Stock of the Company, par value $ 0.0001 per share, upon the terms and conditions as set forth in the Series

D Certificate of Designations.

Each share of Series D Preferred Stock has a stated value of $ 1,000 .

The Series D Preferred Stock shall rank (i) senior

to the Company’s common stock and any other class or series of capital stock of the Company created hereafter, the terms of which

specifically provide that such class or series shall rank junior to the Series D Preferred Stock, (ii) pari passu with any class or series

of capital stock of the Company created hereafter specifically ranking, by its terms, on par with the Series D Preferred Stock, (iii)

pari passu with the Series B Preferred Stock of the Company with respect to its rights, preferences and restrictions, and (iv) pari passu

with the Series C Preferred Stock of the Company.

Holders of the Series D Preferred Stock have no

voting power except as otherwise required by the Delaware General Corporation Law.

Upon any liquidation, dissolution or winding-up

of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of the Series D Preferred Stock shall be entitled

to receive out of the assets available for distribution to stockholders, (i) after and subject to the payment in full of all amounts required

to be distributed to the holders of another class or series of stock of the Company ranking on liquidation prior and in preference to

the Series D Preferred Stock, including the Series A Preferred Stock, (ii) ratably with any class or series of stock ranking on liquidation

on parity with the Series D Preferred Stock and (iii) in preference and priority to the holders of the shares of common stock, an amount

equal to 100 % of the Stated Value of the Series D Preferred Stock, in proportion to the full and preferential amount that all shares

of the Series D Preferred Stock are entitled to receive.

issuance of the Series C Conversion Shares pursuant to the rules of the Nasdaq Stock Market and (ii) the one year anniversary of the

date of the first issuance of any shares of the Series C Preferred Stock.

In addition, the holder shall not have the right to convert

any portion of the Series C Preferred Stock if, after giving effect to the conversion, such holder (together with its affiliates) would

beneficially own in excess of 19.99 % of the number of shares of the common stock outstanding immediately after giving effect to the issuance

of the respective Series C Conversion Shares.

On May 29, 2025, the Company filed a certificate of amendment to the Series C Certificate

of Designations, pursuant to which the beneficial ownership limitation of 19.99 % was amended to 4.99 %.

In March 2026, 723 shares of Series C Preferred Stock were converted into 300,000 shares of the Company’s common stock.

The conversion

was done pursuant to the terms of Series C Preferred Stock.

Therefore, no gain or loss was recognized for the conversion.

527 shares of Series C Preferred Stock were converted into 218,672 shares of the Company’s common stock.

The conversion was done

pursuant to the terms of Series C Preferred Stock.

Therefore, no gain or loss was recognized for the conversion.

of June 30, 2026 and December 31, 2025, 2,550 and 3,800 shares of Series C Preferred Stock were issued and outstanding, respectively.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12 – EQUITY (continued)

D Convertible Preferred Stock

January 6, 2025, the Company filed a certificate of designations of preferences, rights, and limitations of Series D Preferred Stock

(the “Series D Certificate of Designations”) with the Department of State, Division of Corporations, of the State of Delaware,

which provides for the designation of 5,000 shares of Series D Preferred Stock of the Company, par value $ 0.0001 per share, upon the

terms and conditions as set forth in the Series D Certificate of Designations.

Each share of Series D Preferred Stock has a stated value

Series D Preferred Stock shall rank (i) senior to the Company’s common stock and any other class or series of capital stock of

the Company created hereafter, the terms of which specifically provide that such class or series shall rank junior to the Series D Preferred

Stock, (ii) pari passu with any class or series of capital stock of the Company created hereafter specifically ranking, by its terms,

on par with the Series D Preferred Stock, (iii) pari passu with the Series B Preferred Stock of the Company with respect to its rights,

preferences and restrictions, and (iv) pari passu with the Series C Preferred Stock of the Company.

of the Series D Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law.

any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders

of the Series D Preferred Stock shall be entitled to receive out of the assets available for distribution to stockholders, (i) after

and subject to the payment in full of all amounts required to be distributed to the holders of another class or series of stock of the

Company ranking on liquidation prior and in preference to the Series D Preferred Stock, including the Series A Preferred Stock, (ii)

ratably with any class or series of stock ranking on liquidation on parity with the Series D Preferred Stock and (iii) in preference

and priority to the holders of the shares of common stock, an amount equal to 100 % of the Stated Value of the Series D Preferred Stock,

in proportion to the full and preferential amount that all shares of the Series D Preferred Stock are entitled to receive.

share of Series D Preferred Stock shall be convertible into common stock (the “Series D Conversion Shares”) at a conversion

1 unchanged sentence

of the Series D Conversion Shares pursuant to the rules of the Nasdaq Stock Market.

In addition, the holder shall not have the right to

convert any portion of the Series D Preferred Stock if, after giving effect to the conversion, such holder (together with its affiliates)

would beneficially own in excess of 4.99 % of the number of shares of the common stock outstanding immediately after giving effect

to the issuance of the respective Series D Conversion Shares.

As of both March 31, 2026 and December 31, 2025, 5,000 shares

of Series D Preferred Stock were issued and outstanding.

On May 6, 2026, the Company issued 2,074,689 shares of its common stock (the “Exchange Shares”) to its chairman, Wenzhao Lu

In addition, the holder shall not have the right

to convert any portion of the Series D Preferred Stock if, after giving effect to the conversion, such holder (together with its affiliates)

would beneficially own in excess of 4.99 % of the number of shares of the common stock outstanding immediately after giving effect to

the issuance of the respective Series D Conversion Shares.

May 6, 2026, the Company issued 2,074,689 shares of its common stock (the “Exchange Shares”) to its chairman, Wenzhao Lu

following shareholder approval in exchange for 5,000 shares of the Company’s Series D Preferred Stock held by him, which shares

of Series D Preferred Stock were cancelled.

The Exchange Shares issued was equal to the amount of shares of common stock Mr.

The Exchange Shares issued was equal to the total of shares of common stock Mr.

have been entitled to receive upon conversion of his Series D Preferred Stock.

Series E Convertible Preferred Stock

12, 2025, the Company filed a certificate of designations of preferences, rights, and limitations of Series E Non-Voting Convertible Preferred

Stock (the “Series E Certificate of Designations”) with the Department of State, Division of Corporations, of the State of

Delaware, which provides for the designation of 19,500 shares of Series E Preferred Stock of the Company, par value $ 0.0001 per

share, upon the terms and conditions as set forth in the Series E Certificate of Designations.

of June 30, 2026 and December 31, 2025, 0 and 5,000 shares of Series D Preferred Stock were issued and outstanding, respectively.

E Convertible Preferred Stock

December 12, 2025, the Company filed a certificate of designations of preferences, rights, and limitations of Series E Non-Voting Convertible

Preferred Stock (the “Series E Certificate of Designations”) with the Department of State, Division of Corporations, of the

State of Delaware, which provides for the designation of 19,500 shares of Series E Preferred Stock of the Company, par value $ 0.0001

per share, upon the terms and conditions as set forth in the Series E Certificate of Designations.

Each share of Series E Preferred Stock

has a Stated Value of $ 1,000 .

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

Series E Preferred Stock shall rank (i) senior to the Company’s Common Stock and any other class or series of capital stock of

the Company created hereafter, the terms of which specifically provide that such class or series shall rank junior to the Series E Preferred

Stock, (ii) pari passu with any class or series of capital stock of the Company created hereafter specifically ranking, by its terms,

on par with the Series E Preferred Stock, (iii) pari passu with Series C Convertible Preferred Stock of the Company with respect to its

rights, preferences and restrictions, and (iv) pari passu the Series D Convertible Preferred Stock of the Company.

of the Series E Preferred Stock shall be entitled to receive, and the Company shall pay, dividends on shares of Series E Preferred Stock

equal (on an as-if-converted-to-Common-Stock basis, disregarding for such purpose any conversion limitations hereunder) to and in the

same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – EQUITY (continued)

Series E Convertible Preferred Stock (continued)

Series E Preferred Stock shall rank (i) senior to the Company’s Common Stock and any other class or series of capital stock of the

Company created hereafter, the terms of which specifically provide that such class or series shall rank junior to the Series E Preferred

Stock, (ii) pari passu with any class or series of capital stock of the

Company created hereafter specifically ranking, by its terms, on par with the Series E Preferred Stock, (iii) pari passu with

Series C Convertible Preferred Stock of the Company with respect to its rights, preferences and restrictions, and (iv) pari

passu the Series D Convertible Preferred Stock of the Company.

Holders of the Series E Preferred Stock shall

be entitled to receive, and the Company shall pay, dividends on shares of Series E Preferred Stock equal (on an as-if-converted-to-Common-Stock

basis, disregarding for such purpose any conversion limitations hereunder) to and in the same form as dividends actually paid on shares

of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

12 – EQUITY (continued)

E Convertible Preferred Stock (continued)

of the Series E Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law.

4 unchanged sentences

(b) increase the number of authorized shares of Series E Preferred Stock, (c) authorize or issue an additional class or series of capital

stock that ranks senior to the Series E Preferred Stock with respect to the distribution of assets on liquidation, or (d) enter into any

agreement with respect to any of the foregoing.

Upon any liquidation, dissolution or winding-up

of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of the Series E Preferred Stock shall be entitled

to receive out of the assets available for distribution to stockholders, (i) after and subject to the payment in full of all amounts required

to be distributed to the holders of another class or series of stock of the Company ranking on liquidation prior and in preference to

the Series E Preferred Stock, including the Series A Preferred Stock, (ii) ratably with any class or series of stock ranking on liquidation

on parity with the Series E Preferred Stock and (iii) in preference and priority to the holders of the shares of Common Stock, an amount

equal to the greater of (i) 100 % of the Stated Value of the Series E Preferred Stock, in proportion to the full and preferential

amount that all shares of the Series E Preferred Stock are entitled to receive or (ii) such amount per share as would have been payable

had all shares of Series E Preferred Stock been converted into Common Stock (without regard to any limitations on conversion set forth

herein or otherwise) pursuant to Section 6 immediately prior to such Liquidation.

Each share of Series E Preferred Stock shall be

convertible into Common Stock (the “Conversion Shares”), at any time from and after May 12, 2026, or such earlier time as

consented to by the Company in writing at the option of the Holder thereof, into that number of shares of Common Stock (subject to certain

limitations, determined by dividing the Stated Value of such share of Series E Preferred Stock by the Conversion Price of $ 1.50 .

the holder shall not have the right to convert any portion of the Series E Preferred Stock if, after giving effect to the conversion,

such holder (together with its affiliates) would beneficially own in excess 4.99 % of the number of shares of the Common Stock outstanding

immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Series E Preferred Stock held by

the applicable holder.

stock that ranks senior to the Series E Preferred Stock with respect to the distribution of assets on liquidation, or (d) enter into

any agreement with respect to any of the foregoing.

any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders

of the Series E Preferred Stock shall be entitled to receive out of the assets available for distribution to stockholders, (i) after

and subject to the payment in full of all amounts required to be distributed to the holders of another class or series of stock of the

Company ranking on liquidation prior and in preference to the Series E Preferred Stock, including the Series A Preferred Stock, (ii)

ratably with any class or series of stock ranking on liquidation on parity with the Series E Preferred Stock and (iii) in preference

and priority to the holders of the shares of Common Stock, an amount equal to the greater of (i) 100 % of the Stated Value of the Series

E Preferred Stock, in proportion to the full and preferential amount that all shares of the Series E Preferred Stock are entitled to

receive or (ii) such amount per share as would have been payable had all shares of Series E Preferred Stock been converted into Common

Stock (without regard to any limitations on conversion set forth herein or otherwise) pursuant to Section 6 immediately prior to such

share of Series E Preferred Stock shall be convertible into Common Stock (the “Conversion Shares”), at any time from and

after May 12, 2026, or such earlier time as consented to by the Company in writing at the option of the Holder thereof, into that number

of shares of Common Stock (subject to certain limitations, determined by dividing the Stated Value of such share of Series E Preferred

Stock by the Conversion Price of $ 1.50 .

In addition, the holder shall not have the right to convert any portion of the Series E Preferred

Stock if, after giving effect to the conversion, such holder (together with its affiliates) would beneficially own in excess 4.99 % of

the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable

upon conversion of Series E Preferred Stock held by the applicable holder.

addition, the Company shall not issue any shares of Common Stock upon conversion of the Series E Preferred Stock or otherwise pursuant

1 unchanged sentence

of shares of Common Stock which the Company may issue upon exercise or conversion (as the case may be) of the Series E Preferred Stock

without breaching the Company’s obligations under the rules and regulations the listing rules of the Company’s Principal Market

(the maximum number of shares of Common Stock which may be issued without violating such rules and regulations, the “Exchange Cap”),

except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by

the applicable rules and regulations of the Principal Market for issuances of shares of Common Stock in excess of such amount (the “Stockholder

Approval Date”) or (B) obtains a written opinion from outside counsel to the Company that such approval is not req uired,

which opinion shall be reasonably satisfactory to the Required Holders (as defined in the Series E Certificate of Designation).

As of both March 31, 2026 and December 31, 2025, 19,500 shares

of Series D Preferred Stock were issued and outstanding.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – EQUITY (continued)

Common Shares and Warrants Sold for Cash from

the February 2026 Private Offering

without breaching the Company’s obligations under the rules and regulations the listing rules of the Company’s Principal

Market (the maximum number of shares of Common Stock which may be issued without violating such rules and regulations, the “Exchange

Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as

required by the applicable rules and regulations of the Principal Market for issuances of shares of Common Stock in excess of such amount

(the “Stockholder Approval Date”) or (B) obtains a written opinion from outside counsel to the Company that such approval

is not required, which opinion shall be reasonably satisfactory to the Required Holders (as defined in the Series E Certificate of Designation).

In May 2026, 104 shares of Series E Preferred Stock were converted into 69,000 shares of the Company’s common stock.

The conversion

was done pursuant to the terms of Series E Preferred Stock.

Therefore, no gain or loss was recognized for the conversion.

of June 30, 2026 and December 31, 2025, 19,396 and 19,500 shares of Series E Preferred Stock were issued and outstanding, respectively.

Shares and Warrants Sold for Cash from the February 2026 Private Offering

February 2026, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional

2 unchanged sentences

(ii) pre-funded

warrants (the “Pre-Funded Warrants”) at a purchase price of 0.5099 per Pre-Funded Warrant to purchase up to an aggregate of

5,882,353 shares of Common Stock (the “Pre-Funded Warrant Shares”);

warrants (the “Pre-Funded Warrants”) at a purchase price of 0.5099 per Pre-Funded Warrant to purchase up to an aggregate

of 5,882,353 shares of Common Stock (the “Pre-Funded Warrant Shares”);

(iii) Series A-1 warrants to purchase up to 6,372,550

6 unchanged sentences

The total gross proceeds were $ 3,249,412 .

Warrant has an exercise price of $ 0.51 per s hare.

The Warrants are not exercisable until the Stockholders of the Company approve

the issuance of the Warrants and the Warrant Shares upon the exercise thereof (the “Stockholder Approval”).

The Series A-1

Warrants will expire five (5) years following the date of Stockholder Approval.

The Series A-2 Warrants will expire eighteen (18) months

following the date of Stockholder Approval.

A holder may not exercise any portion of the Common Warrants to the extent the Purchaser would

own more than 4.99 % of the outstanding Common Stock immediately after exercise.

A holder may increase or decrease this percentage with

respect to either the Series A-1 Common Warrants or the Series A-2 Common Warrants to a percentage not in excess of 9.99 %, except that

any such increase shall require at least 61 days’ prior notice to the Company.

The Prefunded Warrants

are immediately exercisable and may be exercised at a nominal exercise price of $ 0.0001 per share of Common Stock at any time until all

of the Prefunded Warrants are exercised in full.

A holder may not exercise any portion of the Common Warrants to the extent the Purchaser

would own more than 4.99 % of the outstanding Common Stock immediately after exercise.

A holder may increase or decrease this percentage

with respect to Prefunded Warrants to a percentage not in excess of 9.99 %, except that any such increase shall require at least 61 days’

prior notice to the Company.

As compensation to H.C.

Wainwright & Co., LLC as the exclusive placement agent in connection with the Private Placement (the “Placement Agent”),

the Company paid the Placement Agent a cash fee of 7.0 % of the aggregate gross proceeds raised in the Private Placement, plus a management

fee equal to 1.0 % of the gross proceeds raised in the Private Placement and reimbursement of certain expenses and legal fees.

also issued warrants to designees of the Placement Agent (the “Placement Agent Warrants”) to purchase up to 5.0 % of the aggregate

number of shares of Common Stock placed in the Offering, equating to 318,628 shares of Common Stock (the “Placement Agent Warrant

The Placement Agent Warrants have substantially the same terms as the Series A-1 Warrants, except that the Placement Agent

Warrants have an exercise price equal to $ 0.6375 per share.

In connection with the

Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), dated as

of February 26, 2026, with the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement with the Securities

and Exchange Commission (the “SEC”) registering the resale of Shares and the shares of Common Stock underlying the Pre-Funded

Warrants and the Common Warrants no later than 45 days after the date of the Registration Rights Agreement, and to use best efforts to

have the registration statement declared effective as promptly as practical thereafter, and in any event no later than 75 days following

the date of the Registration Rights Agreement (or 90 days following the date of the Registration Rights Agreement in the event of a “full

review” by the Securities and Exchange Commission).

The fair value of the Series A-1 Warrants was

$ 6,009,845 and was based on the Black-Scholes pricing model.

Input assumptions used were as follows:

stock price per share of $ 1.09 , a

risk-free interest rate of 3.57 %;

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12 – EQUITY (continued)

Shares and Warrants Sold for Cash from the February 2026 Private Offering (continued)

Warrant has an exercise price of $ 0.51 per share.

The Warrants are not exercisable until the Stockholders of the Company approve the

issuance of the Warrants and the Warrant Shares upon the exercise thereof (the “Stockholder Approval”).

The Series A-1 Warrants

will expire five (5) years following the date of Stockholder Approval.

The Series A-2 Warrants will expire eighteen (18) months following

the date of Stockholder Approval.

A holder may not exercise any portion of the Common Warrants to the extent the Purchaser would own

more than 4.99 % of the outstanding Common Stock immediately after exercise.

A holder may increase or decrease this percentage with respect

to either the Series A-1 Common Warrants or the Series A-2 Common Warrants to a percentage not in excess of 9.99 %, except that any such

increase shall require at least 61 days’ prior notice to the Company.

Prefunded Warrants are immediately exercisable and may be exercised at a nominal exercise price of $ 0.0001 per share of Common Stock

at any time until all of the Prefunded Warrants are exercised in full.

A holder may not exercise any portion of the Common Warrants to

the extent the Purchaser would own more than 4.99 % of the outstanding Common Stock immediately after exercise.

A holder may increase

or decrease this percentage with respect to Prefunded Warrants to a percentage not in excess of 9.99 %, except that any such increase

shall require at least 61 days’ prior notice to the Company.

compensation to H.C.

Wainwright & Co., LLC as the exclusive placement agent in connection with the Private Placement (the “Placement

Agent”), the Company paid the Placement Agent a cash fee of 7.0 % of the aggregate gross proceeds raised in the Private Placement,

plus a management fee equal to 1.0 % of the gross proceeds raised in the Private Placement and reimbursement of certain expenses and legal

The Company also issued warrants to designees of the Placement Agent (the “Placement Agent Warrants”) to purchase up

to 5.0 % of the aggregate number of shares of Common Stock placed in the Offering, equating to 318,628 shares of Common Stock (the “Placement

Agent Warrant Shares”).

The Placement Agent Warrants have substantially the same terms as the Series A-1 Warrants, except that

the Placement Agent Warrants have an exercise price equal to $ 0.6375 per share.

connection with the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”),

dated as of February 26, 2026, with the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement

with the Securities and Exchange Commission (the “SEC”) registering the resale of Shares and the shares of Common Stock underlying

the Pre-Funded Warrants and the Common Warrants no later than 45 days after the date of the Registration Rights Agreement, and to use

best efforts to have the registration statement declared effective as promptly as practical thereafter, and in any event no later than

75 days following the date of the Registration Rights Agreement (or 90 days following the date of the Registration Rights Agreement in

the event of a “full review” by the Securities and Exchange Commission).

fair value of the Series A-1 Warrants was $ 6,009,845 and was based on the Black-Scholes pricing model.

Input assumptions used were as

stock price per share of $ 1.09 , a risk-free interest rate of 3.57 %;

expected volatility of 108.52 %;

1 unchanged sentence

and expected dividend yield of 0 %.

The fair value of the Series A-2 Warrants was

$ 5,328,870 and was based on the Black-Scholes pricing model.

Input assumptions used were as follows:

stock price per share of $ 1.09 , a

risk-free interest rate of 3.42 %;

fair value of the Series A-2 Warrants was $ 5,328,870 and was based on the Black-Scholes pricing model.

Input assumptions used were as

stock price per share of $ 1.09 , a risk-free interest rate of 3.42 %;

expected volatility of 147.59 %;

1 unchanged sentence

and expected dividend yield of 0 %.

The fair value of the Placement Agent Warrants

was $ 294,001 and was based on the Black-Scholes pricing model.

Input assumptions used were as follows:

stock price per share of $ 1.09 ,

a risk-free interest rate of 3.57 %;

fair value of the Placement Agent Warrants was $ 294,001 and was based on the Black-Scholes pricing model.

Input assumptions used were

stock price per share of $ 1.09 , a risk-free interest rate of 3.57 %;

expected volatility of 108.52 %;

expected life of 5.0 years;

expected life of 5.0

and expected dividend yield of 0 %.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

of the total gross proceeds was allocated to the Pre-Funded Warrants, Series A-1 Warrants, and Series A-2 Warrants based on the relative

fair value allocation method, which has been reflected in shareholders’ equity.

These warrants were classified in shareholders’

equity as the number of shares were fixed and determinable, and no other provisions precluded equity treatment.

$ 94,957 of the total

gross proceeds was allocated as the value of common shares.

direct costs related to the issuance of the common shares and these warrants were $ 786,601 .

These direct costs were recorded as an offset

against gross proceeds with $ 763,614 being recorded in additional paid-in capital and $ 22,987 being recorded in common shares on a relative

fair value basis.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – EQUITY (continued)

Common Shares and Warrants Sold for Cash from

the February 2026 Private Offering (continued)

$ 3,154,455 of the total gross proceeds was allocated

to the Pre-Funded Warrants, Series A-1 Warrants, and Series A-2 Warrants based on the relative fair value allocation method, which has

been reflected in shareholders’ equity.

These warrants were classified in shareholders’ equity as the number of shares were

fixed and determinable, and no other provisions precluded equity treatment.

$ 94,957 of the total gross proceeds was allocated as the value

of common shares.

The direct costs related to the issuance of the

common shares and these warrants were $ 786,601 .

These direct costs were recorded as an offset against gross proceeds with $ 763,614 being

recorded in additional paid-in capital and $ 22,987 being recorded in common shares on a relative fair value basis.

Shares Iss ued for Services

During the three months ended March 31, 2026,

the Company issued a total of 505,000 shares of its common stock for services rendered and to be rendered.

These shares were

valued at $ 522,800 , the fair market values on the grant dates using the reported closing share prices on the dates of grant, and the Company

recorded stock-based compensation expense of $ 319,819 for the three months ended March 31, 2026 and reduced accrued liabilities of

$ 96,600 and recorded prepaid expense of $ 106,381 as of March 31, 2026 which will be amortized over the rest of corresponding

service periods.

Shares Issued for Pre-funded Warrant Exercise

In January 2026, the Company issued an aggregate

of 354,257 shares of its common stock upon cashless exercise of pre-funded warrants.

Common Shares Issued

for Warrant Exercise

In February 2026, pursuant to the terms of related

warrant agreements, the Company issued an aggregate of 1,268,672 shares of its common stock upon cashless exercise of warrants.

Common Shares Issued for Debt Conversion

In January 2026, the June 2024 Convertible Note

holder converted its June 2024 Convertible Note in the principal amount of $ 545,950 and unpaid interest of $ 5,524 into 551,474 shares

of common stock of the Company at a per share price of $ 1.00 .

following table summarizes the shares of the Company’s common stock issuable upon exercise

of options outstanding at March 31, 2026:

12 – EQUITY (continued)

Shares Issued for Services

the six months ended June 30, 2026, the Company issued a total of 655,000 shares of its common stock for services rendered and to be

These shares were valued at $ 583,475 , the fair market values on the grant dates using the reported closing share prices on

the dates of grant, and the Company recorded stock-based compensation expense of $ 454,430 for the six months ended June 30, 2026 and

reduced accrued liabilities of $ 96,600 and recorded prepaid expense of $ 32,445 as of June 30, 2026 which will be amortized over the rest

of corresponding service periods.

Shares Issued for Pre-funded Warrant Cashless Exercise

In January 2026, the Company issued an aggregate of 354,257 shares of its common stock upon cashless exercise of pre-funded warrants to

purchase 354,300 shares of common stock.

Shares Issued for Warrant Cashless Exercise

In February 2026, pursuant to the terms of related warrant agreements, the Company issued an aggregate of 1,268,672 shares of its common

stock upon cashless exercise of warrants to purchase 1,733,571 shares of common stock.

Shares Issued for Pre-funded Warrant Cash Exercise

In April and June 2026, the Company issued an aggregate of 2,541,353 shares of its common stock upon cash exercise of pre-funded warrants

to purchase 2,541,353 shares of common stock for aggregate proceeds of $ 254 .

Shares Issued for Debt Conversion

In January 2026, the June 2024 Convertible Note holder converted its June 2024 Convertible Note in the principal amount of $ 545,950 and

unpaid interest of $ 5,524 into 551,474 shares of common stock of the Company at a per share price of $ 1.00 .

The conversion was done pursuant

to the terms of June 2024 Convertible Note.

Therefore, no gain or loss was recognized for the conversion.

Shares Issued for Accrued Bridge Loan Payable Commitment Fee

June 2026, the Company issued 100,000 shares of its common stock for accrued commitment fee for the purchase of bridge loan.

were valued at $ 138,000 , the fair market value on the grant date using the reported closing share price on the date of grant, and the

Company reduced accrued commitment fee of $ 138,000 .

Shares Issued upon Waiver to Enter into Note Agreement

June 2026, the Company issued 200,000 shares of its common stock in consideration a waiver.

These shares were valued at $ 58,200 , the

fair market value on the grant date using the reported closing share price on the date of grant, and the Company recorded it as debt

discount (See Note 9 – Note Payable, Net).

following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at June 30, 2026:

Options Outstanding Options Exercisable

Exercise Price Number

Outstanding at

2026 Weighted Average

7 unchanged sentences

$ 0.28 – 228.00 2,189,836 2.98 $ 1.74 1,691,780 $ 2.17

There was no stock option

activity during the three months ended March 31, 2026.

The aggregate intrinsic value of both stock options

outstanding and stock options exercisable at March 31, 2026 was $ 0 .

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – EQUITY (continued)

Warrants (Except Pre-Funded Warrants)

following table summ arizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at March

12 – EQUITY (continued)

option activity for the six months ended June 30, 2026 was as follows:

Outstanding at January 1, 2026

Outstanding at June 30, 2026

Options exercisable at June 30, 2026

Options expected to vest

aggregate intrinsic value of stock options outstanding and stock options exercisable at June 30, 2026 was approximately $ 19,000 and $ 15,000 ,

respectively.

fair values of options granted during the six months ended June 30, 2026 were estimated at the date of grant using the Black-Scholes

option-pricing model with the following assumptions:

volatility of 121.81 %, risk-free rate of 4.10 %, annual dividend yield of 0 %, and

expected life of 1.50 - 3.00 years.

The aggregate fair value of the options granted during the six months ended June 30, 2026 was $ 360,638 .

fair values of options granted during the six months ended June 30, 2025 were estimated at the date of grant using the Black-Scholes

option-pricing model with the following assumptions:

volatility of 105.10 %, risk-free rate of 4.29 %, annual dividend yield of 0 %, and

expected life of 3.00 years.

The aggregate fair value of the options granted during the six months ended June 30, 2025 was $ 6,115 .

the three months ended June 30, 2026 and 2025, stock-based compensation expense (adjustment) associated with stock options granted

amounted to $ 248,942 and $( 28,085 ), of which, $ 218,483 and $ 4,454 was recorded as compensation and related benefits, and

$ 30,459 and $( 32,539 ) was recorded as professional fees, respectively.

the six months ended June 30, 2026 and 2025, stock-based compensation expense (adjustment) associated with stock options granted amounted

to $ 248,942 and $( 18,926 ), of which, $ 218,483 and $ 9,312 , respectively, was recorded as compensation and related benefits,

and $ 30,459 and $( 28,238 ) was recorded as professional fees, respectively.

summary of the status of the Company’s nonvested stock options granted as of June 30, 2026 and changes during the six months ended

June 30, 2026 is presented below:

Nonvested at January 1, 2026

( 1,651,944 )

Nonvested at June 30, 2026

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12 – EQUITY (continued)

(Except Pre-Funded Warrants)

following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at June 30,

Warrants Outstanding Warrants Exercisable

Exercise Price Number

Outstanding at

2026 Weighted

2026 Weighted Average

Contractual Life

(Years) Weighted

Exercise Price Number

Exercisable at

March 31, 2026

2026 Weighted

$ 0.21 – 0.64 13,186,602 2.95 $ 0.51 13,186,602 $ 0.51

3 unchanged sentences

$ 0.21 – 187.50 13,202,348 2.95 $ 0.64 13,202,348 $ 0.64

warrant activity for the three months ended March 31, 2026 was as follows :

Weighted Average

Exercise Price

warrant activity for the six months ended June 30, 2026 was as follows:

Outstanding at January 1, 2026

1 unchanged sentence

( 1,733,571 )

Outstanding at March 31, 2026

Exercisable at March 31, 2026

aggregate intrinsic value of stock warrants outstanding and stock warrants exercisable at March 31, 2026 was approximately $ 281,000 and

$ 11,000 , respectively .

Outstanding at June 30, 2026

Exercisable at June 30, 2026

aggregate intrinsic value of both stock warrants outstanding and stock warrants exercisable at June 30, 2026 was approximately $ 10,000 .

Issued in February 2026

1 unchanged sentence

investors (the “Purchasers”) for the issuance and sale in a private placement (the “Private Placement”) of (i)

490,197 shares (the “Shares”) of the Company’s common sto ck at a purchase price of $ 0.51 per Share;

490,197 shares (the “Shares”) of the Company’s common stock at a purchase price of $ 0.51 per Share;

(ii) pre-funded

warrants (the “Pre-Funded Warrants”) at a purchase price of 0.5099 per Pre-Funded Warrant to purchase up to an aggregate of

5,882,353 shares of Common Stock (the “Pre-Funded Warrant Shares”);

warrants (the “Pre-Funded Warrants”) at a purchase price of 0.5099 per Pre-Funded Warrant to purchase up to an aggregate

of 5,882,353 shares of Common Stock (the “Pre-Funded Warrant Shares”);

(iii) Series A-1 warrants to purchase up to 6,372,550

5 unchanged sentences

the Pre-Funded Warrant Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”.

Each Warrant has an exercise

price of $ 0.51 per share.

The Warrants are not exercisable until the Stockholders of the Company approve the issuance of the Warrants

and the Warrant Shares upon the exercise thereof (the “Stockholder Approval”).

The Series A-1 Warrants will expire five (5)

years following the date of Stockholder Approval.

The Series A-2 Warrants will expire eighteen (18) months following the date of Stockholder

A holder may not exercise any portion of the Common Warrants to the extent the Purchaser would own more than 4.99 % of the outstanding

Common Stock immediately after exercise.

A holder may increase or decrease this percentage with respect to either the Series A-1 Common

Warrants or the Series A-2 Common Warrants to a percentage not in excess of 9.99 %, except that any such increase shall require at least

61 days’ prior notice to the Company.

AVALON GLOBOCARE CORP.

AND SUBSIDIARIES

Warrant has an exercise price of $ 0.51 per share.

The Warrants are not exercisable until the Stockholders of the Company approve the

issuance of the Warrants and the Warrant Shares upon the exercise thereof (the “Stockholder Approval”).

The Series A-1 Warrants

will expire five (5) years following the date of Stockholder Approval.

The Series A-2 Warrants will expire eighteen (18) months following

the date of Stockholder Approval.

A holder may not exercise any portion of the Common Warrants to the extent the Purchaser would own

more than 4.99 % of the outstanding Common Stock immediately after exercise.

A holder may increase or decrease this percentage with respect

to either the Series A-1 Common Warrants or the Series A-2 Common Warrants to a percentage not in excess of 9.99 %, except that any such

increase shall require at least 61 days’ prior notice to the Company.

CHANGE AGENTS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – EQUITY (continued)

Warrants (Except Pre-Funded Warrants) (continued)

The Prefunded Warrants

are immediately exercisable and may be exercised at a nominal exercise price of $ 0.0001 per share of Common Stock at any time until all

of the Prefunded Warrants are exercised in full.

A holder may not exercise any portion of the Common Warrants to the extent the Purchaser

would own more than 4.99 % of the outstanding Common Stock immediately after exercise.

A holder may increase or decrease this percentage

with respect to Prefunded Warrants to a percentage not in excess of 9.99 %, except that any such increase shall require at least 61 days’

prior notice to the Company.

As compensation to H.C.

Wainwright & Co., LLC as the exclusive placement agent in connection with the Private Placement (the “Placement Agent”),

the Company paid the Placement Agent a cash fee of 7.0 % of the aggregate gross proceeds raised in the Private Placement, plus a management

fee equal to 1.0 % of the gross proceeds raised in the Private Placement and reimbursement of certain expenses and legal fees.

also issued warrants to designees of the Placement Agent (the “Placement Agent Warrants”) to purchase up to 5.0 % of the aggregate

number of shares of Common Stock placed in the Offering, equating to 318,628 shares of Common Stock (the “Placement Agent Warrant

The Placement Agent Warrants have substantially the same terms as the Series A-1 Warrants, except that the Placement Agent

Warrants have an exercise price equal to $ 0.6375 per share.

In connection with the

Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), dated as

of February 26, 2026, with the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement with the Securities

and Exchange Commission (the “SEC”) registering the resale of Shares and the shares of Common Stock underlying the Pre-Funded

Warrants and the Common Warrants no later than 45 days after the date of the Registration Rights Agreement, and to use best efforts to

have the registration statement declared effective as promptly as practical thereafter, and in any event no later than 75 days following

the date of the Registration Rights Agreement (or 90 days following the date of the Registration Rights Agreement in the event of a “full

review” by the Securities and Exchange Commission).

These warrants were classified in shareholders’

equity as the number of shares were fixed and determinable, and no other provisions precluded equity treatment.

Warrants Exercised

in February 2026

12 – EQUITY (continued)

(Except Pre-Funded Warrants) (continued)