8-K: Avalon Acquires AI Software Firm RPM, Boosts Nasdaq Equity

Avalon GloboCare Corp. has acquired generative AI software company RPM Interactive in an all-stock deal, which is expected to resolve its Nasdaq minimum stockholders equity deficiency.

Summary

• Avalon GloboCare Corp. (Avalon) acquired RPM Interactive, Inc. (RPM), a generative AI publishing and software company, on December 12, 2025.
• RPM merged into Avalon Quantum AI, LLC, a wholly-owned subsidiary of Avalon.
• Avalon issued 19,500 shares of Series E Non-Voting Convertible Preferred Stock to RPM's stockholders, with an aggregate stated and liquidation value of $19.5 million.
• Each Series E Preferred Stock share has a stated value of $1,000 and is convertible into Avalon common stock at a conversion price of $1.50 per share, subject to certain conditions and limitations.
• Avalon believes this acquisition helps resolve its Nasdaq minimum stockholders equity deficiency, bringing it above the $2.5 million threshold.
• RPM developed the "Catch-Up" Software-as-a-Service (SaaS) platform, an automated generative AI video studio for creating short-form video content.
• Avalon plans to use the Catch-Up platform to support marketing initiatives for its FDA-registered breathalyzer, KetoAir.
• On December 11, 2025, Avalon issued an unsecured bridge note for a principal sum of $375,000 to Allen O Cage Jr., with an original issue discount of $75,000 (net proceeds of $300,000).
• The bridge note matures on April 15, 2026, with cash payments of $125,000 due on February 15, 2026, March 15, 2026, and April 15, 2026.
• Upon an event of default, the bridge note is convertible into common stock at 50% of the 5-day volume weighted average price, subject to a floor price.
• Avalon issued 100,000 shares of common stock as a commitment fee for the bridge note, subject to prior shareholder approval.
• Michael Mathews, CEO of RPM, was appointed to Avalon's Board of Directors.

Sentiment

Score: 7

Explanation: The acquisition of RPM Interactive and its AI technology is a strategic positive, particularly as it addresses Avalon's Nasdaq listing compliance issue. The addition of an experienced director and the potential for enhanced marketing capabilities are favorable. However, RPM's significant historical losses and going concern warning, along with the need for future shareholder approvals for key aspects of the transaction, introduce notable uncertainties and risks.

Positives

• The acquisition of RPM Interactive is expected to resolve Avalon's Nasdaq minimum stockholders equity deficiency, bringing it above the $2.5 million threshold required for continued listing.
• The acquisition introduces RPM's "Catch-Up" generative AI SaaS platform, which offers automated short-form video content creation capabilities.
• The Catch-Up platform is expected to enhance Avalon's marketing capabilities, broaden digital reach, and accelerate audience engagement for its consumer health products like KetoAir.
• Michael Mathews, a seasoned technology and digital media executive with over two decades of leadership experience in AI, internet services, and digital marketing, has been appointed to Avalon's Board of Directors.
• The merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Negatives

• RPM Interactive has a history of significant net losses, including $(2,076,592) for the year ended December 31, 2024, and $(484,627) for the nine months ended September 30, 2025.
• RPM has an accumulated deficit of $(6,552,206) and a stockholders deficit of $(4,005,508) as of September 30, 2025.
• RPM has a working capital deficit of $(5,389,634) as of September 30, 2025, and has generated no revenues since its inception.
• There is substantial doubt about RPM's ability to continue as a going concern, as highlighted in its financial statements.
• The bridge note issued by Avalon includes an original issue discount of $75,000, meaning the company received less cash ($300,000) than the principal sum ($375,000) it is obligated to repay.
• The conversion of the Series E Preferred Stock and the commitment shares for the bridge note are subject to future shareholder approval, which introduces uncertainty.
• RPM has a significant "Due to related party parent" liability of $5,224,288 as of September 30, 2025, with no assurance of future funding from this related party.

Risks

• The conversion of Series E Preferred Stock into common stock is subject to shareholder approval and NASDAQ listing rules, including a 4.99% beneficial ownership limitation and the Exchange Cap, which could limit the number of shares convertible without further approval.
• The issuance of 100,000 common shares as a commitment fee for the bridge note is subject to prior shareholder approval as required by NASDAQ rules.
• RPM Interactive's financial statements indicate substantial doubt about its ability to continue as a going concern, with historical net losses, accumulated deficit, and working capital deficit, and no assurance of future funding.
• Forward-looking statements regarding the success of the Catch-Up platform, its integration with KetoAir marketing, and the acceleration of audience reach are subject to various risks and uncertainties, including general industry and market conditions, economic conditions, and governmental/public policy changes.
• The company may not actually achieve the forecasts disclosed in forward-looking statements, and investors should not place undue reliance on them.
• New risks and uncertainties may emerge over time, and it is not possible to predict all of them.

Future Outlook

Avalon expects to leverage RPM's Catch-Up platform to support and amplify marketing initiatives for its KetoAir breathalyzer, aiming to accelerate audience reach, digital engagement, and adoption of its product portfolio. The company anticipates enhancing its marketing capabilities, broadening its digital reach, and strengthening its position in the precision wellness market. A stockholders meeting is planned for May 12, 2026, or as soon as practicable, to approve the conversion of the Series E Preferred Stock.

Management Comments

• "Integrating RPMs AI-driven video studio with our consumer health products, starting with the launch of KetoAir, will enhance our marketing capabilities, broaden our digital reach, and support our long-term value creation strategy." Meng Li, Interim CEO and COO of Avalon GloboCare.
• "We look forward to leveraging RPMs technology to elevate our brand visibility and strengthen our position in the precision wellness market." Meng Li, Interim CEO and COO of Avalon GloboCare.
• "RPMs Catch-Up SaaS platform represents a breakthrough in how short-form video content can be created, scaled, and monetized." Michael Mathews, CEO of RPM.
• "By leveraging our fully automated generative AI video studio to support the marketing and efforts behind Avalons KetoAir, we believe we can significantly enhance digital engagement and create new opportunities to reach health and wellness-focused consumers." Michael Mathews, CEO of RPM.
• "Michael is a recognized innovator in performance marketing and AI-enabled content systems. He brings deep experience in scaling technology platforms, driving digital engagement, and building long-term shareholder value. We are pleased to welcome him to our Board as we execute on our growth and technology integration strategy." Meng Li, Interim CEO and COO of Avalon GloboCare.

Industry Context

This acquisition positions Avalon GloboCare to integrate advanced generative AI capabilities into its consumer health product marketing, aligning with broader industry trends of digital transformation and AI adoption for enhanced customer engagement. The 'Catch-Up' SaaS platform's focus on automated short-form video content creation taps into the growing demand for efficient, scalable digital marketing solutions, particularly relevant in competitive sectors like precision wellness and health technology. The move also reflects a strategy to diversify revenue streams and intellectual property in the evolving digital media landscape, potentially creating a competitive advantage by combining health diagnostics with cutting-edge content generation.

Comparison to Industry Standards

• The acquisition of an AI-driven content platform for marketing consumer health products is a strategic move to enhance digital engagement, similar to how many consumer brands are investing in AI and digital content to reach target audiences.
• The "Catch-Up" SaaS platform, designed for automated short-form video content, addresses a growing need for efficient content creation, comparable to tools used by media companies and content creators to scale their output.
• The appointment of Michael Mathews, with his background in digital advertising technology (Interclick, acquired by Yahoo) and online learning (Aspen Group), brings experience relevant to scaling technology platforms and driving digital engagement, which is a common practice for companies seeking to integrate new technologies.
• RPM's historical financial performance, characterized by significant losses and a going concern warning, suggests it was an early-stage or distressed asset, which is not uncommon for acquisitions in rapidly evolving tech sectors like AI, where potential is valued over immediate profitability.

Management Changes

Corporate Governance

Related Party Transactions

• RPM Interactive historically operated as a consolidated subsidiary of DatChat, Inc. (later Myseum, Inc.), which was its primary source of financial support.
• As of September 30, 2025, RPM had a payable of $5,224,288 to Myseum (formerly DatChat) for advances and allocated shared expenses.
• In January 2025, Myseum cancelled 3,500,000 shares of RPM common stock it held.
• In November 2024, RPM entered into a consulting agreement with Michael Mathews II, son of Avalon's new director Michael Mathews, for $3,000 per month for product management services, which ended April 2025.
• On January 10, 2024, VR Interactive LLC, 45% owned by Darin Myman (RPM's President and Director), purchased 8,000,000 shares of RPM from Metabizz shareholders for $120,000. VR Interactive later distributed these shares to its members in October 2024 and is no longer considered a related party.

Stakeholder Impact

• Shareholders (Avalon): Potential dilution from Series E Preferred Stock conversion and commitment shares, but improved Nasdaq listing compliance. Strategic shift into AI content creation could enhance long-term value.
• Shareholders (RPM): Received 19,500 shares of Avalon Series E Preferred Stock, representing a $19.5 million value, in exchange for their RPM shares.
• Employees (RPM): RPM had employment agreements with a new CEO, CFO, and CTO effective upon its IPO closing (prior to the merger), indicating a new management structure for the acquired entity.
• Nasdaq: The transaction is intended to bring Avalon into compliance with Nasdaq's minimum stockholders equity requirement.

Next Steps

• Hold a stockholders meeting on May 12, 2026, or as promptly as practicable thereafter, to approve the conversion of the Series E Preferred Stock into shares of Common Stock.
• File a proxy statement and other relevant materials with the SEC as soon as practicable following the closing of the merger.
• Begin marketing for the Catch-Up SaaS platform immediately after the new year.
• Obtain shareholder approval for the issuance of 100,000 common shares as a commitment fee for the bridge note.
• Continue efforts to obtain shareholder approval for the conversion of Series E Preferred Stock in excess of the Exchange Cap, holding meetings every three months if initial approval is not obtained.
• Continue with the pending merger with YOOV Group Holdings Limited, for which an S-4 registration statement is on file.

Key Dates

Recommendation

The acquisition of RPM Interactive is a strategic move that addresses a critical Nasdaq listing compliance issue for Avalon GloboCare and introduces promising AI technology. The integration of the "Catch-Up" platform could significantly enhance marketing and digital reach for Avalon's products like KetoAir, representing a positive long-term growth vector. However, RPM's substantial historical losses and going concern warning, coupled with the need for future shareholder approvals for key equity issuances, introduce considerable financial and operational uncertainties. The bridge note also carries an original issue discount, which is a less favorable financing term. Given these mixed signals—a strategic positive addressing a compliance issue versus significant financial challenges and future approval hurdles—a "hold" recommendation is appropriate. Investors should monitor the integration of RPM, the performance of the AI platform, the resolution of shareholder approvals, and Avalon's overall financial trajectory before making further investment decisions.

Keywords

Avalon GloboCare, RPM Interactive, Merger, Acquisition, AI Software, Generative AI, SaaS Platform, KetoAir, Nasdaq Listing, Preferred Stock, Bridge Note, Corporate Governance, Michael Mathews, Financial Health, SEC Filing, ALBT