2. LIQUIDITY AND CAPITAL RESOURCES

In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing from financial institutions and equity financings have been utilized to finance the working capital requirements of the Company.

The Company’s business is capital intensive, and certain factors show negative trends in our liquidity position, including (1) the net loss of approximately $4.0 million for the nine months ended December 31, 2025; (2) accumulated deficit of approximately $49.1 million as of December 31, 2025; (3) $0.8 million of net cash outflows in operating activities from continuing operations for the nine months ended December 31, 2025, and (4) the net working capital deficit of approximately $2.5 million as of December 31, 2025.

However, the Company’s liquidity position has been substantially improved by two financing transactions completed in November 2025. Specifically, the Company received net cash proceeds of approximately $0.66 million from issuance of common stock in PIPE Offering and $2.8 million from issuance of common stock and pre-funded warrants in registered direct offering. As a result, the Company’s cash and cash equivalents as of December 31, 2025 increased by approximately $2.8 million as compared with that of September 30, 2025.

Management evaluated the Company’s current liquidity and operating forecasts for the twelve months following the issuance of these unaudited condensed consolidated financial statements and has concluded that, as a result of the recent financing and improved cash flows, there was no substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance of unaudited condensed consolidated financial statements for the quarterly period ended December 31, 2025.