A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb losses, or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE.

The Company followed ASC Topic 810, “Consolidation”, utilizing a qualitative approach, and determined that it was the primary beneficiary of its VIE, Aikawa Medical Management, Inc. (“AMM”), and consolidated the results of operations, financial position, and cash flows of AMM until the date of its deconsolidation on June 10, 2026.

The amounts and balances of AMM included in the Company’s unaudited consolidated financial statements as of December 31, 2025 and for the three and six months ended June 30, 2026 and 2025 are presented in the tables below.


	December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	4,238,149
Accounts receivable		10,615
Prepaid expenses and other current assets		10,831
Total Current Assets		4,259,595

Loans receivables from subsidiaries of the Company		3,077,945
Other assets		2,276
Total Non-current Assets		3,080,221
Total Assets	$	7,339,816

LIABILITIES
Current Liabilities
Accounts payable	$	19,327
Accrued liabilities and other current liabilities		17,824
Due to related party		2,733,324
Total Current Liabilities		2,770,475

Loan payable to a subsidiary of the Company		8,265,846
Total Non-current Liabilities		8,265,846
Total Liabilities	$	11,036,321

NOTE 3 — VARIABLE INTEREST ENTITY (cont.)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2026			2025			2026			2025
Revenues	$	—		$	41,002		$	—		$	81,472
Total operating expenses	$	17,763		$	116,431		$	39,647		$	164,231
Net loss	$	(18,059	)	$	(75,430	)	$	(34,143	)	$	(57,759	)


	For the Six Months Ended June 30,
	2026			2025
Net cash used in operating activities	$	(34,143	)	$	(75,467	)
Net cash provided by investing activities	$	—		$	25,000
Net cash used in financing activities	$	(118,237	)	$	(27,942	)

On June 10, 2026, pursuant to a subrogation agreement, the Company’s CEO, who is also the controlling shareholder of the Company and the sole shareholder of AMM, repaid the net amount of $5,195,128 owed by AMM to the Company’s subsidiary on AMM’s behalf, thereby settling the intercompany balances. Following the deconsolidation, the Company has no continuing involvement with, explicit or implicit obligations to provide financial support to, or exposure to loss related to AMM. AMM remains wholly owned by the Company’s CEO and controlling shareholder and, accordingly, is considered a related party of the Company.

At the deconsolidation date, AMM had net assets of $1,546,703. The $3,648,425 excess of the repayment amount over AMM’s net assets was recorded as a deemed contribution from the controlling shareholder in the Company’s unaudited consolidated statements of changes in stockholders’ equity.