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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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 1, 2024, the Company formed a wholly owned subsidiary, Q&amp;A Distribution LLC (“Q&amp;A Distribution”), a Texas company. 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There was no activity for the subsidiary since its incorporation through December 31, 2025.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 5, 2025, the Company formed a wholly owned subsidiary, Avalon Quantum AI, LLC (“Avalon Quantum AI”), a Nevada company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 12, 2025, the Company acquired RPM Interactive, Inc., a Nevada corporation (“RPM”), in accordance with the terms 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”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As 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 business search engine optimization.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Details of the Company’s subsidiaries which are included in these consolidated financial statements as of December 31, 2025 are as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 25%; text-align: center">Name of Subsidiary</td> <td style="padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"> </td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 16%; text-align: center">Place and date of Incorporation</td> <td style="padding-bottom: 1.5pt; vertical-align: top; width: 1%; text-align: center"> </td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 11%; text-align: center">Percentage of Ownership</td> <td style="padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"> </td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 45%; text-align: center">Principal Activities</td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon Healthcare System, Inc. (“AHS”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Delaware <br/> May 18, 2015</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">Holding company for payroll and other expenses</td></tr> <tr style="background-color: White"> <td style="text-align: center; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="text-align: center; vertical-align: bottom"> </td> <td style="vertical-align: top; text-align: center"> </td> <td style="text-align: center; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="text-align: center; vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon RT 9 Properties LLC (“Avalon RT 9”)  </td> <td style="text-align: center"> </td> <td style="text-align: center">New Jersey <br/> February 7, 2017  </td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT  </td> <td style="text-align: center"> </td> <td style="text-align: center">Owned and operated an income-producing real property and held and managed the corporate headquarters through February 2026</td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”)</td> <td style="text-align: center"> </td> <td style="text-align: center">PRC <br/> April 29, 2016  </td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by AHS  </td> <td style="text-align: center"> </td> <td style="text-align: center">Is not considered an operating entity    </td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center">Genexosome Technologies Inc. (“Genexosome”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Nevada <br/> July 31, 2017</td> <td style="text-align: center"> </td> <td style="text-align: center">60% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">No current activities to report, dormant  </td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon Laboratory Services, Inc. (“Avalon Lab”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Delaware <br/> October 14, 2022</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">No current activities to report, dormant</td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center">Q&amp;A Distribution LLC (“Q&amp;A Distribution”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Texas <br/> May 1, 2024</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">Distributes KetoAir device</td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Nexus MergerSub Limited (“Nexus”)</td> <td style="text-align: center"> </td> <td style="text-align: center">BVI <br/> February 21, 2025</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">No current activities to report</td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center">Avalon Quantum AI, LLC (“Avalon Quantum AI”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Nevada <br/> December 5, 2025</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">Advanced Agentic AI systems, including automated video generation.”</td></tr> </table> 1 0.985 1 0.40 0.40 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Details of the Company’s subsidiaries which are included in these consolidated financial statements as of December 31, 2025 are as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 25%; text-align: center">Name of Subsidiary</td> <td style="padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"> </td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 16%; text-align: center">Place and date of Incorporation</td> <td style="padding-bottom: 1.5pt; vertical-align: top; width: 1%; text-align: center"> </td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 11%; text-align: center">Percentage of Ownership</td> <td style="padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"> </td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 45%; text-align: center">Principal Activities</td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon Healthcare System, Inc. (“AHS”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Delaware <br/> May 18, 2015</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">Holding company for payroll and other expenses</td></tr> <tr style="background-color: White"> <td style="text-align: center; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="text-align: center; vertical-align: bottom"> </td> <td style="vertical-align: top; text-align: center"> </td> <td style="text-align: center; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="text-align: center; vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon RT 9 Properties LLC (“Avalon RT 9”)  </td> <td style="text-align: center"> </td> <td style="text-align: center">New Jersey <br/> February 7, 2017  </td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT  </td> <td style="text-align: center"> </td> <td style="text-align: center">Owned and operated an income-producing real property and held and managed the corporate headquarters through February 2026</td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”)</td> <td style="text-align: center"> </td> <td style="text-align: center">PRC <br/> April 29, 2016  </td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by AHS  </td> <td style="text-align: center"> </td> <td style="text-align: center">Is not considered an operating entity    </td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center">Genexosome Technologies Inc. (“Genexosome”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Nevada <br/> July 31, 2017</td> <td style="text-align: center"> </td> <td style="text-align: center">60% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">No current activities to report, dormant  </td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Avalon Laboratory Services, Inc. (“Avalon Lab”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Delaware <br/> October 14, 2022</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">No current activities to report, dormant</td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center">Q&amp;A Distribution LLC (“Q&amp;A Distribution”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Texas <br/> May 1, 2024</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">Distributes KetoAir device</td></tr> <tr style="background-color: rgb(204,238,255); vertical-align: top"> <td style="text-align: center">Nexus MergerSub Limited (“Nexus”)</td> <td style="text-align: center"> </td> <td style="text-align: center">BVI <br/> February 21, 2025</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">No current activities to report</td></tr> <tr style="background-color: White; vertical-align: top"> <td style="text-align: center">Avalon Quantum AI, LLC (“Avalon Quantum AI”)</td> <td style="text-align: center"> </td> <td style="text-align: center">Nevada <br/> December 5, 2025</td> <td style="text-align: center"> </td> <td style="text-align: center">100% held by ALBT</td> <td style="text-align: center"> </td> <td style="text-align: center">Advanced Agentic AI systems, including automated video generation.”</td></tr> </table> Delaware May 18, 2015 1 Holding company for payroll and other expenses New Jersey February 7, 2017 1 Owned and operated an income-producing real property and held and managed the corporate headquarters through February 2026 PRC April 29, 2016 1 Is not considered an operating entity Nevada July 31, 2017 0.60 No current activities to report, dormant Delaware October 14, 2022 1 No current activities to report, dormant Texas May 1, 2024 1 Distributes KetoAir device BVI February 21, 2025 1 No current activities to report Nevada December 5, 2025 1 Advanced Agentic AI systems, including automated video generation.” <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 2 – <span style="text-decoration:underline">BASIS OF PRESENTATION AND GOING CONCERN CONDITION</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Basis of Presentation </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission for financial information.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, the Company determined that certain assets that have been disposed of in February 2026 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 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 Consolidated Balance Sheets, and the cash flows from the Company’s discontinued operations are presented in the Consolidated Statements of Cash Flows for all periods presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain 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. The notes to the Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. Refer to Note 7 Discontinued Operations and Disposals for additional information on the Company’s discontinued operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Going Concern</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As reflected in the accompanying consolidated financial statements, the Company had a working capital deficit of approximately $12,651,000 at December 31, 2025 and had incurred recurring net losses from continuing operations and generated negative cash flow from operating activities of continuing operations of approximately $17,519,000 and $4,581,000 for the year ended December 31, 2025, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 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 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying 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.</p> 12651000 -17519000 -4581000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 3 – <span style="text-decoration:underline">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Use of Estimates</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of 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 consolidated financial statements and accompanying notes. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Significant estimates during the years ended December 31, 2025 and 2024 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”), the fair value of the consideration given in the purchase of RPM, the fair value of assets acquired and liabilities assumed in acquisition, and the assumptions used to determine fair value of warrants and embedded conversion features of convertible note payable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Cash and Cash Equivalents</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2025 and 2024, the Company’s cash balances by geographic area were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">Country:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">United States</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">108,599</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">99.5</td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">2,646,395</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">99.6</td> <td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">China</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">492</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">0.5</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">11,787</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">0.4</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total cash</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">109,091</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">100.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,658,182</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">100.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For purposes of the 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 December 31, 2025 and 2024.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Fair Value of Financial Instruments and Fair Value Measurements</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 0.25in"> </td> <td style="width: 0.25in">●</td> <td style="text-align: justify">Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 0.25in"> </td> <td style="width: 0.25in">●</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 0.25in"> </td> <td style="width: 0.25in">●</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 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 consolidated financial statements, primarily due to their short-term nature.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Assets and liabilities measured at fair value on a recurring basis.</i></b><i> </i>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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Derivative liability.</i> 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 years ended December 31, 2025 and 2024:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Significant<br/> Unobservable<br/> Inputs<br/> (Level 3)</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; width: 89%">Balance of derivative liability as of January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">24,796</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Initial fair value of derivative liability attributable to warrants issuance with March and June 2024 fund raises</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">479,468</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Reclassification of additional paid-in capital upon conversion</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(2,354</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Gain from change in the fair value of derivative liability</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(374,365</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in">Balance of derivative liability as of December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">127,545</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Initial fair value of derivative liability attributable to Second Warrant issuance with June 2024 fund raise (See Note 11)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">621,353</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Gain from change in the fair value of derivative liability</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(538,213</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Reclassification of additional paid-in capital upon conversion</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(176,529</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 2.5pt">Balance of derivative liability as of December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">34,156</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Assets and liabilities measured at fair value on a nonrecurring basis.</i></b> Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. These assets and liabilities can include equipment held for sale and equity method investment that are written down to fair value when they are impaired.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Laboratory equipment. </i>The Company conducted an impairment assessment on its laboratory equipment based on the guidelines established in Financial Accounting Standards Board (“FASB”) ASC Topic 360 to determine the estimated fair market value of its laboratory equipment as of December 31, 2024. Upon completion of its 2024 impairment analysis, the Company determined that the carrying value exceeded the fair market value of laboratory equipment. The fair market value of laboratory equipment is a level 3 valuation. The Company recorded an impairment charge of $111,033 for the year ended December 31, 2024, which was included in other general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. There is no comparative impairment for the year ended December 31, 2025 since the laboratory equipment was fully impaired at December 31, 2024.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Equity method investment in Laboratory Services MSO, LLC </i>The factors used to determine fair value are subject to management’s judgment and expertise. These assumptions represent Level 3 inputs. Impairment of equity method investment in Laboratory Services MSO, LLC for the year ended December 31, 2024 was $259,579, which have been included in loss from equity method investment – Lab Services MSO on the accompanying consolidated statements of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">ASC 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 instruments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Credit Risk and Uncertainties</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company maintains a portion of its cash on deposits with bank and financial institution within the U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The Company has not experienced any losses in such bank accounts and believes it is not exposed to any risks on its cash in bank accounts. At December 31, 2025, there were no balances in excess of the federally-insured limits.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Deferred Offering Costs</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Deferred offering costs consist of legal, accounting and other costs that are directly related to the Company’s open market sale equity financing and will be charged to stockholders’ equity upon completion of the equity offering. As of December 31, 2025 and 2024, deferred offering costs amounted to $84,652 and <span style="-sec-ix-hidden: hidden-fact-766">$0</span>, respectively, which were included in prepaid expense and other current assets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Property and Equipment</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are carried at cost less accumulated depreciation, and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the period of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Intangible Assets</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets consist of goodwill and developed technology and trade name. Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in the business acquisition incurred on December 12, 2025. Goodwill is not amortized, but is tested for impairment at December 31, 2025. Developed technology and trade name are being amortized on a straight-line method over the estimated useful life of 1 year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Investment in Unconsolidated Companies</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company uses the equity method of accounting for its investment in, and earning or loss of, investees that it does not control but over which it does exert significant influence. The Company applies the equity method by initially recording these investments at cost, as equity method investments, subsequently adjusted for equity in earnings and cash distributions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. If the Company considers any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. Impairment of equity method investment amounted to $259,579 for the year ended December 31, 2024. See Note 9 for discussion of equity method investments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company classifies distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Impairment of Long-lived Assets</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the year ended December 31, 2024, the Company incurred impairment charges in operations of $111,033 on its laboratory equipment. The valuation of the laboratory equipment, and the amount of the impairment charge, were based on impairment assessment conducted on the equipment at December 31, 2024.  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Business Acquisition</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for business acquisition in accordance with ASC No. 805, Business Combinations. The assets acquired and liabilities assumed from the acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill. The result of operations of the acquired business is included in the Company’s operating result from the date of acquisition.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Receivable from Sale of Equity Method Investment</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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, the Company and Lab Services MSO entered into a Redemption and Abandonment Agreement (the “Redemption Agreement”), whereby Lab Services MSO redeemed the 40% equity interest in Lab Services MSO held by the Company for cash and the surrender of its Series B convertible preferred stock (“Series B Preferred Stock”) having a carrying value of $11,000,000. The aggregate cash amount to the Company for the redemption was $1,745,000, to be paid as follows: one payment of $95,000 at the closing of the redemption and, beginning in March 2025, monthly payments of $75,000 until December 2026. In addition, pursuant to the terms of the Redemption Agreement, all shares of the Company’s Series B Preferred Stock previously issued to SCBC Holdings LLC as partial consideration for the equity interests of Lab Services MSO, were permanently surrendered and relinquished to the Company for no additional consideration. The difference of $2,348,695 between the carrying value of the extinguished Series B Preferred Stock, the aggregate cash amount to the Company for the redemption, net of the payables due to Lab Services MSO of $632,916, totaling $13,377,916, and the carrying value of the equity method investment of $11,029,221 was accounted for as an increase to additional paid-in capital (See Note 16 - Series B Convertible Preferred Stock Extinguished Related to Sale of Equity Method Investment). Accordingly, beginning in February 2025, the Company no longer offers laboratory services.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Receivable from sale of equity method investment is presented net of reserve for credit loss. The Company maintains a reserve for credit loss for estimated loss. The Company reviews the receivable from sale of equity method investment on a periodic basis and makes general and specific reserve when there is doubt as to the collectability of the balance. In the evaluation of Lab Services MSO’s receivable, the Company considered the age of the balance, its historical payment history and current economic trends. After unsuccessful collection efforts during the period, management has decided to write off the receivable. As a result, for the three months ended June 30, 2025, a receivable in the amount of $1,650,000 was written off. At June 30, 2025, the Company established a reserve for credit loss in the amount of $1,650,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On or about July 22, 2025, the Company filed a lawsuit in the Court of Chancery of the State of Delaware against Laboratory Services MSO, LLC and certain affiliates. The Company has asserted a variety of claims, including breach of contract, arising out of its prior transactions with the defendants, including the Redemption and Abandonment Agreement, dated as of February 26, 2025. The Company and Laboratory Services MSO, LLC entered into a Confidential Settlement Agreement and Mutual Release dated August 26, 2025 whereby Laboratory Services MSO, LLC agreed to pay the Company in the aggregate of $1,722,000 ($50,000 of which is for the Company’s attorneys’ fees and $22,000 of which is interest attributable to the 7^th through 12^th monthly payments), of which $600,000 was paid on August 29, 2025 and $1,122,000 to be paid on or before the first business day of each month, beginning September 2025 and ending August 2026, in monthly installments of $93,500. The parties provided a mutual release, as well. The case was dismissed in August 2025. As a result, for the three months ended September 30, 2025, the Company recorded a credit loss recovery of $1,650,000 to reinstate the receivable which was written-off in the second quarter of 2025. As of December 31, 2025, the reserve for credit loss amounted to $0.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Assets Held for Sale</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Assets held for sale represent property, equipment, and improvement less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360 at the lower of carrying value or fair value less costs to sell. Fair value is the amount obtainable from the sale of the asset in an arm’s length transaction. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Discontinued Operations</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A component of an entity is identified as operations and cash flows that can be clearly distinguished, operationally and financially, from the rest of the entity. Under ASC 205-20, “Presentation of Financial Statements - Discontinued Operations” (“ASC 205-20”), a discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and represents a strategic shift that has or will have a major effect on the entity’s operations and financial results, or a newly acquired business or nonprofit activity that upon acquisition is classified as held for sale. Discontinued operations are presented separately from continuing operations in the consolidated statements of operations and the consolidated statements of cash flows (See Note 7). For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Stock Subscription Liability</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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. As of December 31, 2025, the Company received proceeds of $150,000. As of December 31, 2025, 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Office Lease</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">When a lease contains “rent holidays”, the Company records rental expense on a straight-line basis over the term of the lease. The Company begins recording rent expense on the lease possession date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Advertising and Marketing Costs</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All costs related to advertising and marketing are expensed as incurred. For the years ended December 31, 2025 and 2024, advertising and marketing costs amounted to $843,497 and $237,671, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Stock-based Compensation</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for its stock-based compensation awards in accordance with Accounting Standards Codification (“ASC”) Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees and non-employees including grants of stock options, to be recognized as expense in the statements of operations based on their grant date fair values. The Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company periodically issues common stock and common stock options to consultants for various services. Costs of these transactions are measured at the fair value of the service received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Debt Modifications and Extinguishments</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">When the Company modifies or extinguishes debt, it first evaluates whether the modification qualifies as a troubled debt restructuring (TDR) under ASC Topic 470-60, which requires debt modifications to be evaluated to determine if (1) the borrower is experiencing financial difficulty, and (2) the lender grants the borrower a concession. If a TDR is determined not to have occurred, the Company evaluates the modification in accordance with ASC Topic 470-50-40, which requires modification to debt instruments to be evaluated to assess whether debt modification or debt extinguishment accounting is applicable. This evaluation includes analyzing whether there are significant and consequential changes to the economic substance of the note. If the change is deemed insignificant then the change is considered a debt modification, whereas if the change is substantial the change is reflected as a debt extinguishment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If debt extinguishment guidance applies, the previous debt principal amount is removed, the previously capitalized debt issuance costs are expensed, the value of instruments exchanged are recorded, including cash, new debt, warrants and common stock, and a gain or loss on extinguishment of debt is recorded. If debt modification guidance applies, no gain or loss is recorded and the effective interest rate of the debt is updated based on the carrying value of the debt and the revised future cash flows. Any previously capitalized debt issuance costs in a debt modification are amortized as interest expense over the term of the new debt instrument.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Income Taxes</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is governed by the income tax laws of China and the United States. The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, the benefit for tax positions taken can only be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2025 and 2024, the Company had no significant uncertain tax positions which would require either recognition of a liability or disclosure in the financial statements. For United States entities, tax year that remains subject to examination is the years ended December 31, 2025, 2024, 2023 and 2022. For China entities, income tax returns for the tax years ended December 31, 2021 through December 31, 2025 remain open for statutory examination by PRC tax authorities. The Company recognizes interest and penalties related to significant uncertain income tax positions in income tax expense. However, no such interest and penalties were recorded as of December 31, 2025 and 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Foreign Currency Translation</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company, AHS, Avalon Lab, and Q&amp;A Distribution is the U.S. dollar and the functional currency of Avalon Shanghai is the Chinese Renminbi (“RMB”). For Avalon Shanghai whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Asset and liability accounts at December 31, 2025 and 2024 were translated at 6.9964 RMB and 7.2980 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rates. The average translation rates applied to the statements of operations for the years ended December 31, 2025 and 2024 were 7.1889 RMB and 7.1889 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Per Share Data</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic 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 year ended December 31, 2025, which increases the numerator in the net loss per share calculation. For the years ended December 31, 2025 and 2024, 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The calculation of basic and diluted net loss per common share attributable to the Company common shareholders includes 504,300 of the pre-funded warrants that remained outstanding as of December 31, 2025.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Options to purchase common stock</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">41,169</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">52,479</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Warrants to purchase common stock</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">95,746</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">182,996</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series A convertible preferred stock ^(*)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-762">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">60,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Series B convertible preferred stock ^(**)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-763">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">194,004</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series C convertible preferred stock ^(***)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,576,763</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,452,282</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Series D convertible preferred stock (****)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,074,689</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-764">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series E convertible preferred stock (*****)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">13,000,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-765">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Convertible notes and related accrued interest (******)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">788,283</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">227,269</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Potentially dilutive securities</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">17,576,650</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">2,169,030</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(*)</td> <td style="text-align: justify">Assumed the Series A convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $150.00 per share.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(**)</td> <td style="text-align: justify">Assumed the Series B convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $56.70 per share.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(***)</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(****)</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(*****)</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(******)</td> <td style="text-align: justify">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 years ended December 31, 2025. 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 year ended December 31, 2024.</td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Comprehensive Loss</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Comprehensive loss is comprised of net loss and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the years ended December 31, 2025 and 2024 consisted of net loss and unrealized loss from foreign currency translation adjustment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Commitments and Contingencies</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Noncontrolling Interest</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, Dr. Yu Zhou, former director and former Co-Chief Executive Officer of Genexosome, who owns 40% of the equity interests of Genexosome, which is not under the Company’s control. Since the fourth quarter of 2019, the non-controlling interest has remained inactive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Segment Reporting</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 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 year ended December 31, 2025, the Company was organized into two services-oriented strategic business units: laboratory testing services (which ended on the redemption date, February 26, 2025) — which were led by our strategic business unit managers and AI generated publishing services (which commenced on the acquisition date, December 12, 2025). During the year ended December 31, 2024, the Company was organized into one services-oriented strategic business units: laboratory testing services — 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 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/loss from equity method investment – Lab Services MSO and AI generated publishing operating income. The Company only has one segment now.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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, pursuant to which the Company sold to Mr. Lu 100% of the membership interests of Avalon RT 9. The Company determined that the assets and operations 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 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 Consolidated Balance Sheets, and the cash flows from the Company’s discontinued operations are presented in the Consolidated Statements of Cash Flows for all periods presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Fiscal Year End</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company has adopted a fiscal year end of December 31st.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Reverse Stock Split</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company effectuated a 1-for-15 reverse stock split of its outstanding shares of common stock on October 28, 2024. The reverse split did not change the par value of common stock. All references in these consolidated financial statements to shares, share prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the reverse stock split.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Recent Accounting Standards</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40), to simplify accounting for certain financial instruments. ASU 2020-06 eliminated the then-current models that required separation of beneficial conversion and cash conversion features from convertible instruments and simplified the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. ASU 2020-06 also introduced additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amended the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2020-06 did not have a material effect on the Company’s consolidated financial statements and related disclosures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 became effective for the Company’s annual period beginning on January 1, 2024 and interim periods beginning after January 1, 2025. The Company adopted this guidance in the fourth quarter of 2024. The Company’s results of operations, cash flows, and financial condition were not impacted by the adoption of this ASU.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In December 2023, the FASB issued 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. The 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. The adoption of ASU 2023-09 did not have a material effect on the Company’s consolidated financial statements and related disclosures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): 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. 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 consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 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 consolidated financial condition, results of operations, cash flows or disclosures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Use of Estimates</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of 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 consolidated financial statements and accompanying notes. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Significant estimates during the years ended December 31, 2025 and 2024 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”), the fair value of the consideration given in the purchase of RPM, the fair value of assets acquired and liabilities assumed in acquisition, and the assumptions used to determine fair value of warrants and embedded conversion features of convertible note payable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Cash and Cash Equivalents</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2025 and 2024, the Company’s cash balances by geographic area were as follows:</p><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">Country:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">United States</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">108,599</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">99.5</td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">2,646,395</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">99.6</td> <td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">China</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">492</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">0.5</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">11,787</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">0.4</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total cash</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">109,091</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">100.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,658,182</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">100.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less when purchased and money market accounts to be cash equivalents. The Company had no cash equivalents at December 31, 2025 and 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2025 and 2024, the Company’s cash balances by geographic area were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">Country:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">United States</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">108,599</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">99.5</td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">2,646,395</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">99.6</td> <td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">China</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">492</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">0.5</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">11,787</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">0.4</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total cash</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">109,091</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">100.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,658,182</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">100.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td></tr> </table> 108599 0.995 2646395 0.996 492 0.005 11787 0.004 109091 1 2658182 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Fair Value of Financial Instruments and Fair Value Measurements</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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:</p><table cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 0.25in"> </td> <td style="width: 0.25in">●</td> <td style="text-align: justify">Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.</td></tr> </table><table cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 0.25in"> </td> <td style="width: 0.25in">●</td> <td style="text-align: justify">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.</td></tr> </table><table cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 0.25in"> </td> <td style="width: 0.25in">●</td> <td style="text-align: justify">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.</td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 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 consolidated financial statements, primarily due to their short-term nature.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Assets and liabilities measured at fair value on a recurring basis.</i></b><i> </i>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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Derivative liability.</i> 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 years ended December 31, 2025 and 2024:</p><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Significant<br/> Unobservable<br/> Inputs<br/> (Level 3)</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; width: 89%">Balance of derivative liability as of January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">24,796</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Initial fair value of derivative liability attributable to warrants issuance with March and June 2024 fund raises</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">479,468</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Reclassification of additional paid-in capital upon conversion</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(2,354</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Gain from change in the fair value of derivative liability</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(374,365</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in">Balance of derivative liability as of December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">127,545</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Initial fair value of derivative liability attributable to Second Warrant issuance with June 2024 fund raise (See Note 11)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">621,353</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Gain from change in the fair value of derivative liability</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(538,213</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Reclassification of additional paid-in capital upon conversion</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(176,529</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 2.5pt">Balance of derivative liability as of December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">34,156</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Assets and liabilities measured at fair value on a nonrecurring basis.</i></b> Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. These assets and liabilities can include equipment held for sale and equity method investment that are written down to fair value when they are impaired.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Laboratory equipment. </i>The Company conducted an impairment assessment on its laboratory equipment based on the guidelines established in Financial Accounting Standards Board (“FASB”) ASC Topic 360 to determine the estimated fair market value of its laboratory equipment as of December 31, 2024. Upon completion of its 2024 impairment analysis, the Company determined that the carrying value exceeded the fair market value of laboratory equipment. The fair market value of laboratory equipment is a level 3 valuation. The Company recorded an impairment charge of $111,033 for the year ended December 31, 2024, which was included in other general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. There is no comparative impairment for the year ended December 31, 2025 since the laboratory equipment was fully impaired at December 31, 2024.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Equity method investment in Laboratory Services MSO, LLC </i>The factors used to determine fair value are subject to management’s judgment and expertise. These assumptions represent Level 3 inputs. Impairment of equity method investment in Laboratory Services MSO, LLC for the year ended December 31, 2024 was $259,579, which have been included in loss from equity method investment – Lab Services MSO on the accompanying consolidated statements of operations and comprehensive loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.</p> The table below reflects the activity of derivative liability measured at fair value for the years ended December 31, 2025 and 2024:<table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Significant<br/> Unobservable<br/> Inputs<br/> (Level 3)</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; width: 89%">Balance of derivative liability as of January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">24,796</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Initial fair value of derivative liability attributable to warrants issuance with March and June 2024 fund raises</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">479,468</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Reclassification of additional paid-in capital upon conversion</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(2,354</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Gain from change in the fair value of derivative liability</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(374,365</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in">Balance of derivative liability as of December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">127,545</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Initial fair value of derivative liability attributable to Second Warrant issuance with June 2024 fund raise (See Note 11)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">621,353</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Gain from change in the fair value of derivative liability</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(538,213</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Reclassification of additional paid-in capital upon conversion</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(176,529</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 2.5pt">Balance of derivative liability as of December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">34,156</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 24796 479468 -2354 374365 127545 621353 538213 -176529 34156 111033 0 259579 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Credit Risk and Uncertainties</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company maintains a portion of its cash on deposits with bank and financial institution within the U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The Company has not experienced any losses in such bank accounts and believes it is not exposed to any risks on its cash in bank accounts. At December 31, 2025, there were no balances in excess of the federally-insured limits.</p> 250000 0 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Deferred Offering Costs</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Deferred offering costs consist of legal, accounting and other costs that are directly related to the Company’s open market sale equity financing and will be charged to stockholders’ equity upon completion of the equity offering. As of December 31, 2025 and 2024, deferred offering costs amounted to $84,652 and <span style="-sec-ix-hidden: hidden-fact-766">$0</span>, respectively, which were included in prepaid expense and other current assets.</p> 84652 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Property and Equipment</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are carried at cost less accumulated depreciation, and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the period of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Intangible Assets</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets consist of goodwill and developed technology and trade name. Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in the business acquisition incurred on December 12, 2025. Goodwill is not amortized, but is tested for impairment at December 31, 2025. Developed technology and trade name are being amortized on a straight-line method over the estimated useful life of 1 year.</p> P1Y <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Investment in Unconsolidated Companies</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company uses the equity method of accounting for its investment in, and earning or loss of, investees that it does not control but over which it does exert significant influence. The Company applies the equity method by initially recording these investments at cost, as equity method investments, subsequently adjusted for equity in earnings and cash distributions.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. If the Company considers any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. Impairment of equity method investment amounted to $259,579 for the year ended December 31, 2024. See Note 9 for discussion of equity method investments.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company classifies distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.</p> 259579 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Impairment of Long-lived Assets</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the year ended December 31, 2024, the Company incurred impairment charges in operations of $111,033 on its laboratory equipment. The valuation of the laboratory equipment, and the amount of the impairment charge, were based on impairment assessment conducted on the equipment at December 31, 2024.  </p> 111033 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Business Acquisition</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for business acquisition in accordance with ASC No. 805, Business Combinations. The assets acquired and liabilities assumed from the acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill. The result of operations of the acquired business is included in the Company’s operating result from the date of acquisition.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Receivable from Sale of Equity Method Investment</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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, the Company and Lab Services MSO entered into a Redemption and Abandonment Agreement (the “Redemption Agreement”), whereby Lab Services MSO redeemed the 40% equity interest in Lab Services MSO held by the Company for cash and the surrender of its Series B convertible preferred stock (“Series B Preferred Stock”) having a carrying value of $11,000,000. The aggregate cash amount to the Company for the redemption was $1,745,000, to be paid as follows: one payment of $95,000 at the closing of the redemption and, beginning in March 2025, monthly payments of $75,000 until December 2026. In addition, pursuant to the terms of the Redemption Agreement, all shares of the Company’s Series B Preferred Stock previously issued to SCBC Holdings LLC as partial consideration for the equity interests of Lab Services MSO, were permanently surrendered and relinquished to the Company for no additional consideration. The difference of $2,348,695 between the carrying value of the extinguished Series B Preferred Stock, the aggregate cash amount to the Company for the redemption, net of the payables due to Lab Services MSO of $632,916, totaling $13,377,916, and the carrying value of the equity method investment of $11,029,221 was accounted for as an increase to additional paid-in capital (See Note 16 - Series B Convertible Preferred Stock Extinguished Related to Sale of Equity Method Investment). Accordingly, beginning in February 2025, the Company no longer offers laboratory services.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Receivable from sale of equity method investment is presented net of reserve for credit loss. The Company maintains a reserve for credit loss for estimated loss. The Company reviews the receivable from sale of equity method investment on a periodic basis and makes general and specific reserve when there is doubt as to the collectability of the balance. In the evaluation of Lab Services MSO’s receivable, the Company considered the age of the balance, its historical payment history and current economic trends. After unsuccessful collection efforts during the period, management has decided to write off the receivable. As a result, for the three months ended June 30, 2025, a receivable in the amount of $1,650,000 was written off. At June 30, 2025, the Company established a reserve for credit loss in the amount of $1,650,000.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On or about July 22, 2025, the Company filed a lawsuit in the Court of Chancery of the State of Delaware against Laboratory Services MSO, LLC and certain affiliates. The Company has asserted a variety of claims, including breach of contract, arising out of its prior transactions with the defendants, including the Redemption and Abandonment Agreement, dated as of February 26, 2025. The Company and Laboratory Services MSO, LLC entered into a Confidential Settlement Agreement and Mutual Release dated August 26, 2025 whereby Laboratory Services MSO, LLC agreed to pay the Company in the aggregate of $1,722,000 ($50,000 of which is for the Company’s attorneys’ fees and $22,000 of which is interest attributable to the 7^th through 12^th monthly payments), of which $600,000 was paid on August 29, 2025 and $1,122,000 to be paid on or before the first business day of each month, beginning September 2025 and ending August 2026, in monthly installments of $93,500. The parties provided a mutual release, as well. The case was dismissed in August 2025. As a result, for the three months ended September 30, 2025, the Company recorded a credit loss recovery of $1,650,000 to reinstate the receivable which was written-off in the second quarter of 2025. As of December 31, 2025, the reserve for credit loss amounted to $0.</p> 0.40 11000000 1745000 95000 75000 2348695 632916 13377916 11029221 1650000 1650000 1722000 50000 22000 600000 1122000 93500 1650000 0 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Assets Held for Sale</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Assets held for sale represent property, equipment, and improvement less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360 at the lower of carrying value or fair value less costs to sell. Fair value is the amount obtainable from the sale of the asset in an arm’s length transaction. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Discontinued Operations</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A component of an entity is identified as operations and cash flows that can be clearly distinguished, operationally and financially, from the rest of the entity. Under ASC 205-20, “Presentation of Financial Statements - Discontinued Operations” (“ASC 205-20”), a discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and represents a strategic shift that has or will have a major effect on the entity’s operations and financial results, or a newly acquired business or nonprofit activity that upon acquisition is classified as held for sale. Discontinued operations are presented separately from continuing operations in the consolidated statements of operations and the consolidated statements of cash flows (See Note 7). For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Stock Subscription Liability</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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. As of December 31, 2025, the Company received proceeds of $150,000. As of December 31, 2025, 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.</p> 141643 3.53 150000 150000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Office Lease</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">When a lease contains “rent holidays”, the Company records rental expense on a straight-line basis over the term of the lease. The Company begins recording rent expense on the lease possession date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Advertising and Marketing Costs</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All costs related to advertising and marketing are expensed as incurred. For the years ended December 31, 2025 and 2024, advertising and marketing costs amounted to $843,497 and $237,671, respectively.</p> 843497 237671 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Stock-based Compensation</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for its stock-based compensation awards in accordance with Accounting Standards Codification (“ASC”) Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees and non-employees including grants of stock options, to be recognized as expense in the statements of operations based on their grant date fair values. The Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company periodically issues common stock and common stock options to consultants for various services. Costs of these transactions are measured at the fair value of the service received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Debt Modifications and Extinguishments</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">When the Company modifies or extinguishes debt, it first evaluates whether the modification qualifies as a troubled debt restructuring (TDR) under ASC Topic 470-60, which requires debt modifications to be evaluated to determine if (1) the borrower is experiencing financial difficulty, and (2) the lender grants the borrower a concession. If a TDR is determined not to have occurred, the Company evaluates the modification in accordance with ASC Topic 470-50-40, which requires modification to debt instruments to be evaluated to assess whether debt modification or debt extinguishment accounting is applicable. This evaluation includes analyzing whether there are significant and consequential changes to the economic substance of the note. If the change is deemed insignificant then the change is considered a debt modification, whereas if the change is substantial the change is reflected as a debt extinguishment.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If debt extinguishment guidance applies, the previous debt principal amount is removed, the previously capitalized debt issuance costs are expensed, the value of instruments exchanged are recorded, including cash, new debt, warrants and common stock, and a gain or loss on extinguishment of debt is recorded. If debt modification guidance applies, no gain or loss is recorded and the effective interest rate of the debt is updated based on the carrying value of the debt and the revised future cash flows. Any previously capitalized debt issuance costs in a debt modification are amortized as interest expense over the term of the new debt instrument.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Income Taxes</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is governed by the income tax laws of China and the United States. The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, the benefit for tax positions taken can only be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2025 and 2024, the Company had no significant uncertain tax positions which would require either recognition of a liability or disclosure in the financial statements. For United States entities, tax year that remains subject to examination is the years ended December 31, 2025, 2024, 2023 and 2022. For China entities, income tax returns for the tax years ended December 31, 2021 through December 31, 2025 remain open for statutory examination by PRC tax authorities. The Company recognizes interest and penalties related to significant uncertain income tax positions in income tax expense. However, no such interest and penalties were recorded as of December 31, 2025 and 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Foreign Currency Translation</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company, AHS, Avalon Lab, and Q&amp;A Distribution is the U.S. dollar and the functional currency of Avalon Shanghai is the Chinese Renminbi (“RMB”). For Avalon Shanghai whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Asset and liability accounts at December 31, 2025 and 2024 were translated at 6.9964 RMB and 7.2980 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rates. The average translation rates applied to the statements of operations for the years ended December 31, 2025 and 2024 were 7.1889 RMB and 7.1889 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.</p> 6.9964 7.298 1 7.1889 7.1889 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Per Share Data</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic 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 year ended December 31, 2025, which increases the numerator in the net loss per share calculation. For the years ended December 31, 2025 and 2024, 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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The calculation of basic and diluted net loss per common share attributable to the Company common shareholders includes 504,300 of the pre-funded warrants that remained outstanding as of December 31, 2025.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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:</p><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Options to purchase common stock</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">41,169</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">52,479</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Warrants to purchase common stock</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">95,746</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">182,996</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series A convertible preferred stock ^(*)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-762">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">60,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Series B convertible preferred stock ^(**)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-763">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">194,004</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series C convertible preferred stock ^(***)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,576,763</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,452,282</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Series D convertible preferred stock (****)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,074,689</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-764">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series E convertible preferred stock (*****)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">13,000,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-765">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Convertible notes and related accrued interest (******)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">788,283</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">227,269</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Potentially dilutive securities</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">17,576,650</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">2,169,030</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(*)</td> <td style="text-align: justify">Assumed the Series A convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $150.00 per share.</td></tr> </table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(**)</td> <td style="text-align: justify">Assumed the Series B convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $56.70 per share.</td></tr> </table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(***)</td> <td style="text-align: justify">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.</td></tr> </table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(****)</td> <td style="text-align: justify">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.</td></tr> </table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(*****)</td> <td style="text-align: justify">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.</td></tr> </table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(******)</td> <td style="text-align: justify">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 years ended December 31, 2025. 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 year ended December 31, 2024.</td></tr> </table> 162473 504300 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Options to purchase common stock</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">41,169</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">52,479</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Warrants to purchase common stock</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">95,746</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">182,996</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series A convertible preferred stock ^(*)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-762">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">60,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Series B convertible preferred stock ^(**)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-763">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">194,004</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series C convertible preferred stock ^(***)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,576,763</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,452,282</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Series D convertible preferred stock (****)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,074,689</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-764">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Series E convertible preferred stock (*****)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">13,000,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-765">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Convertible notes and related accrued interest (******)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">788,283</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">227,269</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Potentially dilutive securities</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">17,576,650</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">2,169,030</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(*)</td> <td style="text-align: justify">Assumed the Series A convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $150.00 per share.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(**)</td> <td style="text-align: justify">Assumed the Series B convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $56.70 per share.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(***)</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(****)</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(*****)</td> <td style="text-align: justify">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.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in; text-align: left">(******)</td> <td style="text-align: justify">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 years ended December 31, 2025. 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 year ended December 31, 2024.</td></tr> </table> 41169 52479 95746 182996 60000 194004 1576763 1452282 2074689 13000000 788283 227269 17576650 2169030 150 56.7 2.41 2.41 1.5 1 11.25 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Comprehensive Loss</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Comprehensive loss is comprised of net loss and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the years ended December 31, 2025 and 2024 consisted of net loss and unrealized loss from foreign currency translation adjustment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Commitments and Contingencies</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Noncontrolling Interest</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, Dr. Yu Zhou, former director and former Co-Chief Executive Officer of Genexosome, who owns 40% of the equity interests of Genexosome, which is not under the Company’s control. Since the fourth quarter of 2019, the non-controlling interest has remained inactive.</p> 0.40 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Segment Reporting</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 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 year ended December 31, 2025, the Company was organized into two services-oriented strategic business units: laboratory testing services (which ended on the redemption date, February 26, 2025) — which were led by our strategic business unit managers and AI generated publishing services (which commenced on the acquisition date, December 12, 2025). During the year ended December 31, 2024, the Company was organized into one services-oriented strategic business units: laboratory testing services — 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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On 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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 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/loss from equity method investment – Lab Services MSO and AI generated publishing operating income. The Company only has one segment now.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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, pursuant to which the Company sold to Mr. Lu 100% of the membership interests of Avalon RT 9. The Company determined that the assets and operations 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 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 Consolidated Balance Sheets, and the cash flows from the Company’s discontinued operations are presented in the Consolidated Statements of Cash Flows for all periods presented.</p> 0.40 0.40 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>Fiscal Year End</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company has adopted a fiscal year end of December 31st.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Reverse Stock Split</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company effectuated a 1-for-15 reverse stock split of its outstanding shares of common stock on October 28, 2024. The reverse split did not change the par value of common stock. All references in these consolidated financial statements to shares, share prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the reverse stock split.</p> 1-for-15 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Recent Accounting Standards</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40), to simplify accounting for certain financial instruments. ASU 2020-06 eliminated the then-current models that required separation of beneficial conversion and cash conversion features from convertible instruments and simplified the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. ASU 2020-06 also introduced additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amended the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2020-06 did not have a material effect on the Company’s consolidated financial statements and related disclosures.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 became effective for the Company’s annual period beginning on January 1, 2024 and interim periods beginning after January 1, 2025. The Company adopted this guidance in the fourth quarter of 2024. The Company’s results of operations, cash flows, and financial condition were not impacted by the adoption of this ASU.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In December 2023, the FASB issued 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. The 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. The adoption of ASU 2023-09 did not have a material effect on the Company’s consolidated financial statements and related disclosures.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): 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. 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 consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 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 consolidated financial condition, results of operations, cash flows or disclosures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 4 – <span style="text-decoration:underline">ACQUISITION</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company accounts for acquisition using the acquisition method of accounting, whereby the results of operations are included in the financial statements from the date of acquisition. The purchase price is allocated to the acquired assets and assumed liabilities based on their estimated fair values at the date of acquisition, and any excess is allocated to goodwill.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Effective December 12, 2025, pursuant to the Agreement and Plan of Merger as discussed in Note 1, the Company acquired 100% of RPM by issuance of 19,500 its Series E Convertible Preferred Stock which has a fair value of $14,916,753 based on a third party valuation report in connection with this acquisition.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In according to the acquisition, RPM’s assets and liabilities were recorded at their fair values as of the effective date, December 12, 2025, and the results of operations of RPM are consolidated with results of operations of the Company, starting on December 12, 2025.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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. The results of operations of RPM are included in the consolidated results of operations of the Company from the effective date of December 12, 2025 to December 31, 2025. For the period from the effective date of December 12, 2025 to December 31, 2025, revenue and net loss included in the consolidated statements of operations from RPM amounted to $0 and $94,453, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In connection with the combination, for the year ended December 31, 2025, the Company incurred acquisition related costs of $75,000 which, pursuant to ASC 805, are expensed and included in professional fees on the accompanying consolidated statements of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">The following summarizes total consideration transferred to the RPM stockholders under the acquisition as well as the fair value of the assets acquired and liabilities assumed under the acquisition:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td>Assets acquired:</td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 89%">Cash</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">14,026</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Intangible assets</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,252,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Goodwill</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">12,808,197</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Total assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">15,074,223</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Liabilities assumed:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Accounts payable and accrued liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">157,470</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">157,470</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Purchase price</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">14,916,753</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Net assets were valued at their respective carrying amounts, which the Company believes approximate their current fair values at the acquisition date. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 31, 2025, the Company assessed goodwill for any impairment and concluded that there were not indicators of impairment as of December 31, 2025.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of RPM had occurred as of the beginning of the following periods:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net revenues</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-767">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-768">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 78%; text-align: left">Net loss</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">18,919,867</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">9,979,986</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net loss attributable to Avalon GloboCare Corp.</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">18,919,867</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">9,979,986</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Net loss per share</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">5.89</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">10.66</td> <td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results. </p> 1 19500 14916753 12808197 12808197 0 94453 75000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">The following summarizes total consideration transferred to the RPM stockholders under the acquisition as well as the fair value of the assets acquired and liabilities assumed under the acquisition:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td>Assets acquired:</td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 89%">Cash</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">14,026</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Intangible assets</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,252,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Goodwill</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">12,808,197</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Total assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">15,074,223</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Liabilities assumed:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Accounts payable and accrued liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">157,470</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">157,470</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Purchase price</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">14,916,753</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 14026 2252000 12808197 15074223 157470 157470 14916753 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of RPM had occurred as of the beginning of the following periods:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net revenues</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-767">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-768">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 78%; text-align: left">Net loss</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">18,919,867</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">9,979,986</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net loss attributable to Avalon GloboCare Corp.</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">18,919,867</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">9,979,986</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Net loss per share</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">5.89</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">10.66</td> <td style="text-align: left"> </td></tr> </table> 18919867 9979986 18919867 9979986 5.89 10.66 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 5 – <span style="text-decoration:underline">PREPAID EXPENSE AND OTHER CURRENT ASSETS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">At December 31, 2025 and 2024, prepaid expense and other current assets consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31,<br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Prepaid professional fees</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">67,139</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">33,665</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepaid directors’ and officers’ liability insurance premium</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,932</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">9,741</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred offering costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">84,652</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-769">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Security deposit</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">443</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">17,654</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Due from broker</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">81</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">32,885</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Finished goods</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">74,841</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">92,230</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Recoverable value-added tax</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,863</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">9,245</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Others</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">33,219</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">59,664</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">282,170</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">255,084</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">At December 31, 2025 and 2024, prepaid expense and other current assets consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31,<br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Prepaid professional fees</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">67,139</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">33,665</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepaid directors’ and officers’ liability insurance premium</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,932</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">9,741</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred offering costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">84,652</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-769">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Security deposit</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">443</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">17,654</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Due from broker</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">81</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">32,885</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Finished goods</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">74,841</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">92,230</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Recoverable value-added tax</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,863</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">9,245</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Others</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">33,219</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">59,664</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">282,170</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">255,084</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 67139 33665 10932 9741 84652 443 17654 81 32885 74841 92230 10863 9245 33219 59664 282170 255084 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 6 – <span style="text-decoration:underline">PROPERTY AND EQUIPMENT</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">At December 31, 2025 and 2024, property and equipment consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: center">Useful Life</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 66%; text-align: left">Office equipment and furniture</td> <td style="width: 1%"> </td> <td style="width: 11%; text-align: center; padding-left: 5.4pt">3 Years</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">10,045</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">9,630</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(9,318</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(8,332</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">727</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">1,298</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">For the years ended December 31, 2025 and 2024, depreciation expense of property and equipment amounted to $610 and $611, respectively, which was included in other operating expenses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">At December 31, 2025 and 2024, property and equipment consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: center">Useful Life</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 66%; text-align: left">Office equipment and furniture</td> <td style="width: 1%"> </td> <td style="width: 11%; text-align: center; padding-left: 5.4pt">3 Years</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">10,045</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">9,630</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(9,318</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(8,332</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">727</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">1,298</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> P3Y 10045 9630 9318 8332 727 1298 610 611 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 7 – <span style="text-decoration:underline">DISCONTINUED OPERATIONS AND DISPOSALS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major impact on an entity’s operations and financial results when the components of an entity meet the criteria in ASC paragraph 205-20-45-10. In the period in which the component meets the held for sale or discontinued operations criteria the major current assets, non-current assets, current liabilities and non-current liabilities shall be reported as a component of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the income (loss) of continuing operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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 approximately $9,000,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The subsidiary comprises our real property operations segment. As a result of the planned disposition of the subsidiary, the real property operations segment meets the held for sale criteria of ASC 205-20. Accordingly, the historical results of operations of the real property operations segment have been reflected as discontinued operations in our consolidated financial statement for all periods prior to the Amended MIPA on February 18, 2026.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Details of the net loss from discontinued operations were as follows for the years ended December 31:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">REAL PROPERTY RENTAL REVENUE</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,410,259</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,333,403</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">REAL PROPERTY OPERATING EXPENSES</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,050,599</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,065,574</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">REAL PROPERTY OPERATING INCOME</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">359,660</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">267,829</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">OTHER OPERATING EXPENSES:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Professional fees</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">184,544</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">231,837</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Compensation and related benefits</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">121,395</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">122,474</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total Other Operating Expenses</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">305,939</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">354,311</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">INCOME (LOSS) FROM OPERATIONS</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">53,721</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(86,482</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">OTHER (EXPENSE) INCOME</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Interest expense - amortization of debt discount and debt issuance costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(84,553</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(119,228</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Interest expense - other</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(711,291</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(658,000</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Other income (expense)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">20</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(80</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total Other Expense, net</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(795,824</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(777,308</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">LOSS BEFORE INCOME TAXES</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(742,103</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(863,790</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">INCOME TAXES</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-770">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-771">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">NET LOSS</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">(742,103</td> <td style="padding-bottom: 2.5pt; text-align: left">)</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">(863,790</td> <td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The following table summarizes the assets and liabilities of the discontinued operations as of December 31:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>ASSETS</td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in">CURRENT ASSETS</td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; width: 78%">Cash</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">258,999</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">198,127</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left">Rent receivable</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">84,898</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">80,829</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Prepaid expense and other current assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">12,719</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">44,276</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Current Assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">356,616</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">323,232</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">NON-CURRENT ASSETS:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left">Property and equipment, net</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">3,478</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">11,614</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left">Investment in real estate, net</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">6,925,768</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">7,022,721</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Deferred leasing costs and other non-current assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">8,523</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">71,794</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Non-current Assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">6,937,769</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">7,106,129</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt">Total Assets</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">7,294,385</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">7,429,361</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>LIABILITIES</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">CURRENT LIABILITIES:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left">Accrued liabilities and other payables</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">261,077</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">205,317</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Note payable, net</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">5,800,000</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">5,715,447</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Current Liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">6,061,077</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">5,920,764</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">NON-CURRENT LIABILITIES:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Deferred rental income</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">23,515</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-772">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Non-current Liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">23,515</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-773">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt">Total Liabilities</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">6,084,592</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">5,920,764</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The above tables exclude intercompany payables that are eliminated within our consolidated balance sheets.</p> 1 9000000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Details of the net loss from discontinued operations were as follows for the years ended December 31:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">REAL PROPERTY RENTAL REVENUE</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,410,259</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,333,403</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">REAL PROPERTY OPERATING EXPENSES</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,050,599</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,065,574</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">REAL PROPERTY OPERATING INCOME</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">359,660</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">267,829</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">OTHER OPERATING EXPENSES:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Professional fees</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">184,544</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">231,837</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Compensation and related benefits</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">121,395</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">122,474</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total Other Operating Expenses</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">305,939</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">354,311</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">INCOME (LOSS) FROM OPERATIONS</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">53,721</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(86,482</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">OTHER (EXPENSE) INCOME</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Interest expense - amortization of debt discount and debt issuance costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(84,553</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(119,228</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Interest expense - other</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(711,291</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(658,000</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Other income (expense)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">20</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(80</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total Other Expense, net</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(795,824</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(777,308</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">LOSS BEFORE INCOME TAXES</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(742,103</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(863,790</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">INCOME TAXES</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-770">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-771">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">NET LOSS</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">(742,103</td> <td style="padding-bottom: 2.5pt; text-align: left">)</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">(863,790</td> <td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> 1410259 1333403 1050599 1065574 359660 267829 184544 231837 121395 122474 305939 354311 53721 -86482 84553 119228 711291 658000 20 -80 795824 777308 -742103 -863790 -742103 -863790 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The following table summarizes the assets and liabilities of the discontinued operations as of December 31:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>ASSETS</td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in">CURRENT ASSETS</td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; width: 78%">Cash</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">258,999</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">198,127</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left">Rent receivable</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">84,898</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">80,829</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Prepaid expense and other current assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">12,719</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">44,276</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Current Assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">356,616</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">323,232</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">NON-CURRENT ASSETS:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left">Property and equipment, net</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">3,478</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">11,614</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left">Investment in real estate, net</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">6,925,768</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">7,022,721</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Deferred leasing costs and other non-current assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">8,523</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">71,794</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Non-current Assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">6,937,769</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">7,106,129</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt">Total Assets</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">7,294,385</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">7,429,361</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>LIABILITIES</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">CURRENT LIABILITIES:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left">Accrued liabilities and other payables</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">261,077</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">205,317</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Note payable, net</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">5,800,000</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">5,715,447</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Current Liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">6,061,077</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">5,920,764</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">NON-CURRENT LIABILITIES:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Deferred rental income</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">23,515</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-772">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total Non-current Liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">23,515</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-773">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt">Total Liabilities</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">6,084,592</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">5,920,764</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 258999 198127 84898 80829 12719 44276 356616 323232 3478 11614 6925768 7022721 8523 71794 6937769 7106129 7294385 7429361 261077 205317 5800000 5715447 6061077 5920764 23515 23515 6084592 5920764 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 8 – <span style="text-decoration:underline">INTANGIBLE ASSETS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets consist of the valuation of identifiable intangible assets acquired (See Note 4), 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition, in connection with the acquisition of RPM (See Note 4), the purchase price exceeded the fair value of net assets acquired by $12,808,197. The Company allocated the $12,808,197 excess to goodwill. Goodwill is not amortized, but is tested for impairment at December 31, 2025. On December 31, 2025, the Company assessed its goodwill for any impairment and concluded that there were not indicators of impairment as of December 31, 2025.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2025, intangible assets consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: center">Useful Life</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Developed technology</td> <td style="width: 1%"> </td> <td style="width: 10%; text-align: center; padding-left: 5.4pt">1 Year</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right">2,230,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Trade name</td> <td> </td> <td style="text-align: center; padding-left: 5.4pt">1 Year</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">22,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Goodwill</td> <td style="padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">12,808,197</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td> <td> </td> <td style="text-align: center; padding-left: 5.4pt"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">15,060,197</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated amortization</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(93,833</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">14,966,364</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the year ended December 31, 2025, amortization expense amounted to $93,833, which represented amortization from December 12, 2025 (the date of acquisition) to December 31, 2025. There was no comparable amortization prior to the date of acquisition.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Amortization of intangible assets attributable to future periods is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">For the Year Ending December 31:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Amortization Amount</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">2026</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">2,158,167</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2027 and thereafter</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-774">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,158,167</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 12808197 12808197 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2025, intangible assets consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: center">Useful Life</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Developed technology</td> <td style="width: 1%"> </td> <td style="width: 10%; text-align: center; padding-left: 5.4pt">1 Year</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 10%; text-align: right">2,230,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Trade name</td> <td> </td> <td style="text-align: center; padding-left: 5.4pt">1 Year</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">22,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Goodwill</td> <td style="padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">12,808,197</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td> <td> </td> <td style="text-align: center; padding-left: 5.4pt"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">15,060,197</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated amortization</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(93,833</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; padding-left: 5.4pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">14,966,364</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> P1Y 2230000 P1Y 22000 12808197 15060197 93833 14966364 93833 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Amortization of intangible assets attributable to future periods is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">For the Year Ending December 31:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Amortization Amount</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">2026</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">2,158,167</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2027 and thereafter</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-774">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,158,167</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 2158167 2158167 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 9 – <span style="text-decoration:underline">EQUITY METHOD INVESTMENTS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025 and 2024, the equity method investments, net, amounted to <span style="-sec-ix-hidden: hidden-fact-776">$0</span> and $10,636,544, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 9, 2023, the Company entered into and closed an Amended and Restated Membership Interest Purchase Agreement (the “Amended MIPA”), by and among Avalon Lab, SCBC Holdings LLC (the “Seller”), the Zoe Family Trust, Bryan Cox and Sarah Cox as individuals (each an “Owner” and collectively, the “Owners”), and Lab Services MSO.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the terms and conditions set forth in the Amended MIPA, Avalon Lab acquired from the Seller, 40% of the issued and outstanding equity interests of Lab Services MSO (the “Purchased Interests”). The consideration paid by Avalon Lab to Seller for the Purchased Interests consisted of $20,666,667, which was comprised of (i) $9,000,000 in cash, (ii) $11,000,000 pursuant to the issuance of 11,000 shares of the Company’s Series B Preferred Stock, stated value $1,000 (the “Series B Stated Value”), which approximated the fair value, and (iii) a $666,667 cash payment on February 9, 2024. The Series B Preferred Stock was convertible into shares of the Company’s common stock at a conversion price per share equal to $56.70, which approximated the market price at the date of closing, or an aggregate of 194,004 shares of the Company’s common stock, which were subject to a lock-up period and restrictions on sale.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the first quarter of 2025, to preserve cash, the Company entered into discussions with Lab Services MSO for the potential redemption of the Company’s investment and on February 26, 2025, the Company and Lab Services MSO entered into a Redemption and Abandonment Agreement, whereby Lab Services MSO redeemed the 40% equity interest in Lab Services MSO held by the Company (See Note 3 - Receivable from Sale of Equity Method Investment).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Lab Services MSO, through its subsidiaries, was engaged in providing laboratory testing services. During the period from February 9, 2023 (date of investment) through February 26, 2025 (date of sale), Avalon Lab and an unrelated company, had an ownership interest in Lab Services MSO of 40% and 60%, respectively. Beginning in February 2025, we no longer offer laboratory services.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In accordance with ASC 810, the Company determined that Lab Services MSO did not qualify as a variable interest entity, nor did it have a controlling financial interest over the legal entity. However, the Company determined that it does have significant influence as a result of its board representation. Therefore, the Company treats the equity investment in the consolidated financial statements under the equity method. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company’s share of the purchased-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). At February 9, 2023 (date of investment), the excess of the Company’s share of the fair values of the investee’s identifiable net assets over the cost of the investment was approximately $19,460,000 which was attributable to intangible assets and goodwill. Thereafter, the investment was adjusted for the post purchase change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Intangible assets consisted of the valuation of identifiable intangible assets acquired, representing trade names and customers relationships, which were being amortized on a straight-line method over the estimated useful life of 15 years. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets. For the period from January 1, 2025 through February 26, 2025 (date of sale) and for the year ended December 31, 2024, amortization expense of these intangible assets amounted to $111,156 and $666,932, respectively, which was included in income (loss) from equity method investment — Lab Services MSO in the accompanying consolidated statements of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in the business acquisition of Lab Services MSO incurred on February 9, 2023. Goodwill is not amortized but is tested for impairment at least once annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In September 2024, the Company assessed its equity method investment in Laboratory Services MSO, LLC for any impairment and concluded that there were indicators of impairment as of September 30, 2024. The Company calculated that the estimated undiscounted cash flows of goodwill were less than the carrying amount of goodwill related to the equity method investment. The Company has recognized impairment loss of $259,579 related to the equity method investment for the year ended December 31, 2024, which was included in loss from equity method investment — Lab Services MSO in the accompanying consolidated statements of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the period from January 1, 2025 through February 26, 2025 (date of sale) and for the year ended December 31, 2024, the Company’s share of Lab Services MSO’s net income was $503,833 and $79,923, respectively, which was included in income (loss) from equity method investment — Lab Services MSO in the accompanying consolidated statements of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company classifies distributions received from its investment on Lab Services MSO using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. For the period from January 1, 2025 through February 26, 2025 (date of sale) and for the year ended December 31, 2024, distribution of earnings from the Company’s investment on Lab Services MSO amounted to $0 and $611,888, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In the years ended December 31, 2025 and 2024, activity recorded for the Company’s equity method investment in Lab Services MSO is summarized in the following table:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">Equity investment carrying amount at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">12,095,020</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Lab Services MSO’s net income attributable to the Company</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">79,923</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Intangible assets amortization amount</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(666,932</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Distribution of earnings from equity investment</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(611,888</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Impairment of goodwill</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(259,579</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Equity investment carrying amount at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,636,544</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Lab Services MSO’s net income attributable to the Company</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">503,833</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Intangible assets amortization amount</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(111,156</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Sale of equity investment</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(11,029,221</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Equity investment carrying amount at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-775">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2024, the Company’s carrying value of the identified intangible assets and goodwill which are included in the equity investment carrying amount was $8,725,712 and <span style="-sec-ix-hidden: hidden-fact-777">$0</span>, respectively. The tables below present the summarized financial information, as provided to the Company by the investee, for the unconsolidated company:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">For the<br/> Period from<br/> January 1,<br/> 2025<br/> through<br/> February 26,<br/> 2025 <br/> (Date of Sale)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">For the year <br/> Ended <br/>December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Net revenue</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">4,241,732</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">13,558,711</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Gross profit</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,155,760</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">3,534,503</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Income (loss) from operation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,513,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(265,754</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Net income</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,259,582</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">199,808</td> <td style="text-align: left"> </td></tr> </table> 10636544 0.40 20666667 9000000 11000000 11000 1000 666667 56.7 194004 0.40 0.40 0.60 19460000 P15Y 111156 666932 259579 503833 79923 0 611888 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In the years ended December 31, 2025 and 2024, activity recorded for the Company’s equity method investment in Lab Services MSO is summarized in the following table:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">Equity investment carrying amount at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">12,095,020</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Lab Services MSO’s net income attributable to the Company</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">79,923</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Intangible assets amortization amount</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(666,932</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Distribution of earnings from equity investment</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(611,888</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Impairment of goodwill</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(259,579</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Equity investment carrying amount at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,636,544</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Lab Services MSO’s net income attributable to the Company</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">503,833</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Intangible assets amortization amount</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(111,156</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Sale of equity investment</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(11,029,221</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Equity investment carrying amount at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-775">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 12095020 79923 -666932 -611888 259579 10636544 503833 -111156 11029221 8725712 The tables below present the summarized financial information, as provided to the Company by the investee, for the unconsolidated company:<table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">For the<br/> Period from<br/> January 1,<br/> 2025<br/> through<br/> February 26,<br/> 2025 <br/> (Date of Sale)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">For the year <br/> Ended <br/>December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Net revenue</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">4,241,732</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">13,558,711</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Gross profit</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,155,760</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">3,534,503</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Income (loss) from operation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,513,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(265,754</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Net income</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,259,582</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">199,808</td> <td style="text-align: left"> </td></tr> </table> 4241732 13558711 2155760 3534503 1513000 -265754 1259582 199808 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10 – <span style="text-decoration:underline">ACCRUED LIABILITIES AND OTHER PAYABLES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">At December 31, 2025 and 2024, accrued liabilities and other payables consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Accrued loan commitment fee</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">138,000</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-778">-</div></td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accrued business expense reimbursement</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">12,423</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">34,781</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Interest payable</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">42,333</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-779">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Taxes payable</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">53,456</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">176,316</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Others</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">34,851</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">17,703</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">281,063</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">228,800</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">At December 31, 2025 and 2024, accrued liabilities and other payables consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Accrued loan commitment fee</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">138,000</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-778">-</div></td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accrued business expense reimbursement</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">12,423</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">34,781</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Interest payable</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">42,333</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-779">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Taxes payable</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">53,456</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">176,316</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Others</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">34,851</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">17,703</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">281,063</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">228,800</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 138000 12423 34781 42333 53456 176316 34851 17703 281063 228800 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 11 – <span style="text-decoration:underline">CONVERTIBLE NOTE PAYABLE</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>May 2023 Convertible Note</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On May 23, 2023, the Company entered into securities purchase agreements with Mast Hill Fund, L.P. (“Mast Hill”) for the issuance of 13.0% senior secured promissory notes in the aggregate principal amount of $1,500,000 (collectively, the “May 2023 Convertible Note”) convertible into shares of the Company’s common stock, as well as the issuance of 5,000 shares of common stock as a commitment fee and warrants for the purchase of 15,366 shares of common stock of the Company. The Company and its subsidiaries 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 May 2023 Convertible Note. Principal amount and interest under the May 2023 Convertible Note were convertible into shares of common stock of the Company at a conversion price of $67.50 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $67.50 or the trading price of the shares, subject to a floor of $22.50.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Mast Hill acquired the May 2023 Convertible Note with principal amount of $1,500,000 and paid the purchase price of $1,425,000 after an original issue discount of $75,000. On May 23, 2023, the Company issued (i) a warrant to purchase 8,333 shares of common stock with an exercise price of $67.50 exercisable until the five-year anniversary of May 23, 2023 (“First Warrant”), (ii) a warrant to purchase 7,033 shares of common stock with an exercise price of $48.00 exercisable until the five-year anniversary of May 23, 2023 (“Second Warrant”).The Second Warrant was never fair valued and was cancelled and extinguished against payment of the May 2023 Convertible Note, and (iii) 5,000 shares of common stock as a commitment fee for the purchase of the May 2023 Convertible Note, which were earned in full as of May 23, 2023. On May 23, 2023, the Company delivered such duly executed May 2023 Convertible Note, warrants and common stock to Mast Hill against delivery of such purchase price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company was obligated to make amortization payments in cash to Mast Hill toward the repayment of the May 2023 Convertible Note, as described in the May 2023 Convertible Note. As of December 31, 2024, the May 2023 Convertible Note was repaid in full.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In connection with the issuance of the May 2023 Convertible Note, the Company incurred debt issuance costs of $175,162 (including the issuance of 667 warrants as a finder’s fee) which was capitalized and was amortized into interest expense over the term of the May 2023 Convertible Note.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that all the warrants issued to Mast Hill and a third party as a finder’s fee met the definition of a derivative liability, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 9,000 warrants with an exercise price of $67.50 exercisable until the five-year anniversary of May 23, 2023 was classified as derivative liability on May 23, 2023. The fair values of the 9,000 warrants with an exercise price of $67.50 exercisable until the five-year anniversary of May 23, 2023 issued on May 23, 2023 were computed using the Black-Scholes option-pricing model with the following assumptions: stock price of $29.40, volatility of 88.80%, risk-free rate of 3.76%, annual dividend yield of 0% and expected life of 5 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC 470-20-25-2, proceeds from the sale of a debt instrument with stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds allocated to the warrants are accounted for as derivative liability. The remainder of the proceeds are allocated to the debt instrument portion of the transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company recorded a total debt discount of $349,654 related to the original issue discount, common shares issued and warrants issued to Mast Hill, which was amortized over the term of the May 2023 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>July 2023 Convertible Note</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On July 6, 2023, the Company entered into securities purchase agreements with FirstFire Global Opportunities Fund, LLC (“FirstFire”) for the issuance of 13.0% senior secured promissory notes in the aggregate principal amount of $500,000 (collectively, the “July 2023 Convertible Note”) convertible into shares of the Company’s common stock, as well as the issuance of 1,667 shares of common stock as a commitment fee and warrants for the purchase of 5,122 shares of common stock of the Company. The Company and its subsidiaries 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 July 2023 Convertible Note. Principal amount and interest under the July 2023 Convertible Note were convertible into shares of common stock of the Company at a conversion price of $67.50 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $67.50 or the trading price of the shares, subject to a floor of $22.50.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">FirstFire acquired the July 2023 Convertible Note with principal amount of $500,000 and paid the purchase price of $475,000 after an original issue discount of $25,000. On July 6, 2023, the Company issued (i) a warrant to purchase 2,778 shares of common stock with an exercise price of $67.50 exercisable until the five-year anniversary of July 6, 2023 (“First Warrant”), (ii) a warrant to purchase 2,344 shares of common stock with an exercise price of $48.00 exercisable until the five-year anniversary of July 6, 2023 (“Second Warrant”). The Second Warrant was never fair valued and was cancelled and extinguished against payment of the July 2023 Convertible Note, and (iii) 1,667 shares of common stock as a commitment fee for the purchase of the July 2023 Convertible Note, which were earned in full as of July 6, 2023. On July 6, 2023, the Company delivered such duly executed July 2023 Convertible Note, warrants and common stock to FirstFire against delivery of such purchase price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company was obligated to make amortization payments in cash to FirstFire toward the repayment of the July 2023 Convertible Note, as described in the July 2023 Convertible Note. As of December 31, 2024, the July 2023 Convertible Note was repaid in full.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In connection with the issuance of the July 2023 Convertible Note, the Company incurred debt issuance costs of $74,204 (including the issuance of 222 warrants as a finder’s fee), which was capitalized and was amortized into interest expense over the term of the July 2023 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that all the warrants issued to Firstfire and a third party as a finder’s fee meet the definition of a derivative liability, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 3,000 warrants with an exercise price of $67.50 exercisable until the five-year anniversary of July 6, 2023 was classified as a derivative liability on July 6, 2023. The fair values of the 3,000 warrants with an exercise price of $67.50 exercisable until the five-year anniversary of July 6, 2023 issued on July 6, 2023 were computed using the Black-Scholes option-pricing model with the following assumptions: stock price of $21.30, volatility of 88.52%, risk-free rate of 4.37%, annual dividend yield of 0% and expected life of 5 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In accordance with ASC 470-20-25-2, proceeds from the sale of a debt instrument with stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The portion of the proceeds allocated to the warrants are accounted for as derivative liability. The remainder of the proceeds are allocated to the debt instrument portion of the transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded a total debt discount of $89,191 related to the original issue discount, common shares issued and warrants issued to Firstfire, which was amortized over the term of the July 2023 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>October 2023 Convertible Note</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On October 9, 2023, the Company entered into securities purchase agreements with Mast Hill and FirstFire for the issuance of 13.0% senior secured promissory notes in the aggregate principal amount of $700,000 (collectively, the “October 2023 Convertible Note”) convertible into shares of the Company’s common stock, as well as the issuance of 4,666 shares of common stock as a commitment fee and warrants for the purchase of 12,834 shares of common stock of the Company. The Company and its subsidiaries also entered into that certain security agreements, 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 October 2023 Convertible Note. Principal amount and interest under the October 2023 Convertible Note were convertible into shares of common stock of the Company at a conversion price of $22.50 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $22.50 or the market price (as defined in the October 2023 Convertible Note) of the shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Mast Hill acquired the October 2023 Convertible Note with principal amount of $350,000 and paid the purchase price of $332,500 after an original issue discount of $17,500. On October 9, 2023, the Company issued (i) a warrant to purchase 3,500 shares of common stock with an exercise price of $37.50 exercisable until the five-year anniversary of October 9, 2023 (“First Warrant”), (ii) a warrant to purchase 2,917 shares of common stock with an exercise price of $27.00 exercisable until the five-year anniversary of October 9, 2023 (“Second Warrant”). The Second Warrant was never fair valued and was cancelled and extinguished against payment of the October 2023 Convertible Note, and (iii) 2,333 shares of common stock as a commitment fee for the purchase of the October 2023 Convertible Note, which were earned in full as of October 9, 2023. On October 9, 2023, the Company delivered such duly executed October 2023 Convertible Note, warrants and common stock to Mast Hill against delivery of such purchase price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company was obligated to make amortization payments in cash to Mast Hill toward the repayment of the October 2023 Convertible Note, as described in the October 2023 Convertible Note. As of December 31, 2024, the October 2023 Convertible Note was repaid in full.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">FirstFire acquired the October 2023 Convertible Note with principal amount of $350,000 and paid the purchase price of $332,500 after an original issue discount of $17,500. On October 9, 2023, the Company issued (i) a warrant to purchase 3,500 shares of common stock with an exercise price of $37.50 exercisable until the five-year anniversary of October 9, 2023 (“First Warrant”), (ii) a warrant to purchase 2,917 shares of common stock with an exercise price of $27.00 exercisable until the five-year anniversary of October 9, 2023 (“Second Warrant”). The Second Warrant was never fair valued and was cancelled and extinguished against payment of the October 2023 Convertible Note, and (iii) 2,333 shares of common stock as a commitment fee for the purchase of the October 2023 Convertible Note, which were earned in full as of October 9, 2023. On October 9, 2023, the Company delivered such duly executed October 2023 Convertible Note, warrants and common stock to FirstFire against delivery of such purchase price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company was obligated to make amortization payments in cash to FirstFire toward the repayment of the October 2023 Convertible Note, as described in the October 2023 Convertible Note. As of December 31, 2024, the October 2023 Convertible Note was repaid in full.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the issuance of the October 2023 Convertible Note, the Company incurred debt issuance costs of $95,349 (including the issuance of 560 warrants as a finder’s fee), which was capitalized and was amortized into interest expense over the term of the October 2023 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that all the warrants issued to Mast Hill and Firstfire and a third party as a finder’s fee meet the definition of a derivative liability, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 7,560 warrants with an exercise price of $37.50 exercisable until the five-year anniversary of October 9, 2023 was classified as a derivative liability on October 9, 2023. The fair values of the 7,560 warrants with an exercise price of $37.50 exercisable until the five-year anniversary of October 9, 2023 issued on October 9, 2023 were computed using the Black-Scholes option-pricing model with the following assumptions: stock price of $11.55, volatility of 89.70%, risk-free rate of 4.75%, annual dividend yield of 0% and expected life of 5 years.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC 470-20-25-2, proceeds from the sale of a debt instrument with stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds allocated to the warrants are accounted for as derivative liability. The remainder of the proceeds are allocated to the debt instrument portion of the transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded a total debt discount of $128,748 related to the original issue discount, common shares issued and warrants issued to Mast Hill and Firstfire, which was amortized over the term of the October 2023 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>March 2024 Convertible Note</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On March 7, 2024, the Company entered into securities purchase agreements with Mast Hill for the issuance of 13.0% senior secured promissory notes in the aggregate principal amount of $700,000 (collectively, the “March 2024 Convertible Note”) convertible into shares of the Company’s common stock, as well as the issuance of 7,000 shares of common stock as a commitment fee and warrants for the purchase of 16,827 shares of common stock of the Company. The Company and its subsidiaries 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 March 2024 Convertible Note. Principal amount and interest under the March 2024 Convertible Note were convertible into shares of common stock of the Company at a conversion price of $15.00 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $15.00 or the market price (as defined in the March 2024 Convertible Note) of the shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Mast Hill acquired the March 2024 Convertible Note with principal amount of $700,000 and paid the purchase price of $665,000 after an original issue discount of $35,000. On March 7, 2024, the Company issued (i) a warrant to purchase 8,750 shares of common stock with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 (“First Warrant”), (ii) a warrant to purchase 8,077 shares of common stock with an exercise price of $19.50 exercisable until the five-year anniversary of March 7, 2024 (“Second Warrant”). The Second Warrant was never fair valued and was cancelled and extinguished against payment of the March 2024 Convertible Note, and (iii) 7,000 shares of common stock as a commitment fee for the purchase of the March 2024 Convertible Note, which were earned in full as of March 7, 2024. On March 7, 2024, the Company delivered such duly executed March 2024 Convertible Note, warrants and common stock to Mast Hill against delivery of such purchase price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company was obligated to make amortization payments in cash to Mast Hill toward the repayment of the March 2024 Convertible Note, as described in the March 2024 Convertible Note. As of December 31, 2024, the March 2024 Convertible Note was repaid in full.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the issuance of the March 2024 Convertible Note, the Company incurred debt issuance costs of $74,379 (including the issuance of 700 warrants as a finder’s fee) which was capitalized and was amortized into interest expense over the term of the March 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that all the warrants issued to Mast Hill and a third party as a finder’s fee met the definition of a derivative liability, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 9,450 warrants with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 was classified as derivative liability on March 7, 2024. The fair values of the 9,450 warrants with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 issued on March 7, 2024 were computed using the Black-Scholes option-pricing model with the following assumptions: stock price of $6.00, volatility of 85.24%, risk-free rate of 4.07%, annual dividend yield of 0% and expected life of 5 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC 470-20-25-2, proceeds from the sale of a debt instrument with stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds allocated to the warrants are accounted for as derivative liability. The remainder of the proceeds are allocated to the debt instrument portion of the transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded a total debt discount of $97,374 related to the original issue discount, common shares issued and warrants issued to Mast Hill, which was amortized over the term of the March 2024 Convertible Note.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>June 2024 Convertible Note</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On June 5, 2024, the Company entered into securities purchase agreements with Mast Hill for the issuance of 13.0% senior secured promissory notes in the aggregate principal amount of $2,845,000 (collectively, the “June 2024 Convertible Note”) convertible into shares 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 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).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Mast 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. As of March 31, 2025, the Second Warrant was not fair valued since the Company believed the Second Warrant would be cancelled and extinguished against payment of the June 2024 Convertible Note on June 5, 2025. 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company received net cash amount of $881,210 from the June 2024 Convertible Note financing after using the proceeds to pay off all previously issued convertible notes of $1,661,540, and to pay finder’s fee of $120,000 and lender’s costs of $40,000 related to this financing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company was obligated to make amortization payments in cash to Mast Hill toward the repayment of the June 2024 Convertible Note, as provided in the following table:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 25%"><b>Payment Date:</b></td> <td style="padding-bottom: 1.5pt; white-space: nowrap; width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 74%"><b>Payment Amount:</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">December 5, 2024</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$284,500 plus accrued interest through December 5, 2024</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="white-space: nowrap">January 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$284,500 plus accrued interest through January 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">February 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$379,336 plus accrued interest through February 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="white-space: nowrap">March 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$474,167 plus accrued interest through March 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">April 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$474,167 plus accrued interest through April 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="white-space: nowrap">May 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$569,000 plus accrued interest through May 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">June 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">The entire remaining outstanding balance of the June 2024 Convertible Note</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the issuance of the June 2024 Convertible Note, the Company incurred debt issuance costs of $224,221 (including the issuance of 5,333 warrants as a finder’s fee) which was capitalized and had been amortized into interest expense over the term of the June 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that all the warrants issued to Mast Hill and a third party as a finder’s fee meet the definition of a derivative liability, as the Company cannot avoid a net cash settlement under certain circumstances. On March 31, 2025 and June 5, 2024, management determined the probability of failing to make an amortization payment when due to be remote and as such the fair value of the 80,000 warrants with an exercise price of $7.50 exercisable until June 5, 2029, which warrant shall be cancelled and extinguished against payment of the June 2024 Convertible Note, had been estimated to be zero. Accordingly, the fair value of the 72,000 warrants with an exercise price of $9.75 exercisable until June 5, 2029 was classified as derivative liability on June 5, 2024. The fair values of the 72,000 warrants with an exercise price of $9.75 exercisable until June 5, 2029 issued on June 5, 2024 were computed using the Black-Scholes option-pricing model with the following assumptions: stock price of $10.39, volatility of 85.72%, risk-free rate of 4.31%, annual dividend yield of 0% and expected life of 5 years.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In accordance with ASC 470-20-25-2, proceeds from the sale of a debt instrument with stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds allocated to the warrants are accounted for as derivative liability. The remainder of the proceeds are allocated to the debt instrument portion of the transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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 convertible debt (See Note 12). However, on June 5, 2024 and December 14, 2024, management determined the probability of failing to make an amortization payment when due to be remote and as such the fair value of the embedded conversion feature had been estimated to be zero. On December 15, 2024, Mast Hill waived all amortization payments required to be made under the June 2024 Convertible Note. On June 5, 2025, the Second Warrant was not cancelled and was retained by Mast Hill. Accordingly, the initial fair value of the Second Warrant of $621,353 was classified as derivative liability on June 5, 2025 and recorded as interest expense – amortization of debt discount.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded a total debt discount of $1,460,343 related to the original issue discount, common shares issued and warrants issued to Mast Hill, which had been amortized over the term of the June 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On 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 $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 share. The Pre-Funded Warrants were classified as a component of permanent equity on the accompanying consolidated balance sheets as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holder to receive a fixed number of shares of common stock upon exercise. All of the shares underlying the Pre-Funded Warrants have been included in the weighted-average number of shares of common stock used to calculate net loss per share, basic and diluted, attributable to the Company’s common stockholders because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date of the Pre-Funded Warrants. Based on the Company’s assess, this arrangement was accounted for as a modification of debt and, as such, $838,794 related to the waiver fee and Pre-Fund Warrants issued to Mast Hill were expensed.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On 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. The Company recorded a loss on extinguishment of debt of $9,076,587 as a result of the Waiver, representing the value of common stock will be issued upon conversion in excess of the common stock issuable under the original terms of the June 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>July 2025 Convertible Note</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 3, 2025, the Company issued two convertible promissory notes (“July 2025 Convertible Note”) to two accredited investors on identical terms. The July 2025 Convertible Note has a principal amount of $200,000, bears a one-time interest charge of $60,000, and matures nine months from the date of issuance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As 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 $26,800 related to the common stock issued to the two investors, which will be amortized over the term of the July 2025 Convertible Note (See Note 16 - Common Shares Issued as Convertible Note Payable Commitment Fee).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The convertible notes payable as of December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31,<br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31,<br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Principal amount</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">745,950</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">2,556,777</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Less: unamortized debt issuance costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-780">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(93,425</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(8,932</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(349,579</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Convertible note payable, net</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">737,018</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,113,773</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In subsequent period, Mast Hill converted its June 2024 Convertible Note in the principal amount of $545,949 into 545,949 shares of common stock of the Company at a per share price of $1.00 (See Note 23 - Common Shares Issued for Debt Conversion).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">For the years ended December 31, 2025 and 2024, amortization of debt discount and debt issuance costs related to convertible note payable amounted to $1,082,226 (including the initial fair value of the Second Warrant of $621,353) and $1,291,814, respectively, which have been included in interest expense — amortization of debt discount and debt issuance costs on the accompanying consolidated statements of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">For the years ended December 31, 2025 and 2024, interest expense related to convertible note payable amounted to $320,282 and $325,486, respectively, which have been included in interest expense — other on the accompanying consolidated statements of operations and comprehensive loss.</p> 0.13 1500000 5000 15366 67.5 67.5 22.5 1500000 1425000 75000 8333 67.5 7033 48 5000 175162 667 9000 67.5 9000 67.5 29.4 88.8 3.76 0 5 349654 0.13 500000 1667 5122 67.5 67.5 22.5 500000 475000 25000 2778 67.5 2344 48 1667 74204 222 3000 67.5 3000 67.5 21.3 88.52 4.37 0 5 89191 0.13 700000 4666 12834 22.5 22.5 350000 332500 17500 3500 37.5 2917 27 2333 350000 332500 17500 3500 37.5 2917 27 2333 95349 560 7560 37.5 7560 37.5 11.55 89.7 4.75 0 5 128748 0.13 700000 7000 16827 15 15 700000 665000 35000 8750 30 8077 19.5 7000 74379 700 9450 30 9450 30 6 85.24 4.07 0 5 97374 0.13 2845000 26800 146667 11.25 11.25 2845000 2702750 142250 66667 9.75 80000 7.5 26800 881210 1661540 120000 40000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company was obligated to make amortization payments in cash to Mast Hill toward the repayment of the June 2024 Convertible Note, as provided in the following table:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 25%"><b>Payment Date:</b></td> <td style="padding-bottom: 1.5pt; white-space: nowrap; width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 74%"><b>Payment Amount:</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">December 5, 2024</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$284,500 plus accrued interest through December 5, 2024</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="white-space: nowrap">January 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$284,500 plus accrued interest through January 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">February 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$379,336 plus accrued interest through February 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="white-space: nowrap">March 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$474,167 plus accrued interest through March 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">April 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$474,167 plus accrued interest through April 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="white-space: nowrap">May 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">$569,000 plus accrued interest through May 5, 2025</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="white-space: nowrap">June 5, 2025</td> <td style="white-space: nowrap; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td style="white-space: nowrap">The entire remaining outstanding balance of the June 2024 Convertible Note</td></tr> </table> $284,500 plus accrued interest through December 5, 2024 $284,500 plus accrued interest through January 5, 2025 $379,336 plus accrued interest through February 5, 2025 $474,167 plus accrued interest through March 5, 2025 $474,167 plus accrued interest through April 5, 2025 $569,000 plus accrued interest through May 5, 2025 The entire remaining outstanding balance of the June 2024 Convertible Note 224221 5333 80000 80000 7.5 2029-06-05 72000 9.75 72000 9.75 10.39 85.72 4.31 0 621353 1460343 150000 150000 0.01 838794 1 9076587 2010827 2010827 1 200000 60000 1 5000 26800 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The convertible notes payable as of December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31,<br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31,<br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Principal amount</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">745,950</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">2,556,777</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Less: unamortized debt issuance costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-780">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(93,425</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(8,932</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(349,579</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Convertible note payable, net</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">737,018</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,113,773</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 745950 2556777 93425 8932 349579 737018 2113773 545949 545949 1 1082226 621353 1291814 320282 325486 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 12 – <span style="text-decoration:underline">DERIVATIVE LIABILITY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As stated in Note 11, June 2024 Convertible Note, the Company determined that the convertible note payable contains an embedded derivative feature in the form of a conversion provision which is adjustable based on future prices of the Company’s common stock. In accordance with ASC 815-10-25, each derivative feature is initially recorded at its fair value using the Black-Scholes option valuation method and then re-value at each reporting date, with changes in the fair value reported in the statements of operations. However, on June 5, 2024 and December 14, 2024, management determined the probability of failing to make an amortization payment when due was remote and as such the fair value of the embedded conversion feature had been estimated to be zero. On December 15, 2024, Mast Hill waived all amortization payments required to be made under the June 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 23, 2023, the Company issued 9,000 warrants with an exercise price of $67.50 exercisable until May 23, 2028 to Mast Hill and 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 9,000 warrants was classified as a derivative liability on May 23, 2023. On December 31, 2024, the estimated fair value of the 9,000 warrants was $3,714. The estimated fair value of the warrants was computed as of December 31, 2024 using Black-Scholes option-pricing model, with the following assumptions: stock price of $3.26, volatility of 97.00%, risk-free rate of 4.27%, annual dividend yield of 0% and expected life of 3.4 years. In March 2025, 8,333 warrants held by Mast Hill were cashless exercised. On December 31, 2025, the estimated fair value of the rest of 667 warrants was $11. The estimated fair value of the warrants was computed as of December 31, 2025 using Black-Scholes option-pricing model, with the following assumptions: stock price of $1.20, volatility of 99.55%, risk-free rate of 3.47%, annual dividend yield of 0% and expected life of 2.4 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 6, 2023, the Company issued 3,000 warrants with an exercise price of $67.50 exercisable until July 6, 2028 to FirstFire and 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 3,000 warrants was classified as a derivative liability on July 6, 2023. On November 18, 2024, 2,778 warrants held by FirstFire were cashless exercised. On December 31, 2024, the estimated fair value of the rest of 222 warrants was $94. The estimated fair value of the warrants was computed as of December 31, 2024 using Black-Scholes option-pricing model, with the following assumptions: stock price of $3.26, volatility of 95.85%, risk-free rate of 4.27%, annual dividend yield of 0% and expected life of 3.5 years. On December 31, 2025, the estimated fair value of the 222 warrants was $4. The estimated fair value of the warrants was computed as of December 31, 2025 using Black-Scholes option-pricing model, with the following assumptions: stock price of $1.20, volatility of 98.29%, risk-free rate of 3.55%, annual dividend yield of 0% and expected life of 2.5 years.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 9, 2023, the Company issued 7,560 warrants with an exercise price of $37.50 exercisable until October 9, 2028 to Mast Hill and FirstFire and 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 7,560 warrants was classified as a derivative liability on October 9, 2023. On November 18, 2024, 3,500 warrants held by FirstFire were cashless exercised. On December 31, 2024, the estimated fair value of the rest of 4,060 warrants was $2,880. The estimated fair value of the warrants was computed as of December 31, 2024 using Black-Scholes option-pricing model, with the following assumptions: stock price of $3.26, volatility of 93.90%, risk-free rate of 4.27%, annual dividend yield of 0% and expected life of 3.8 years. On March 26, 2025, 3,500 warrants held by Mast Hill were cashless exercised. On December 31, 2025, the estimated fair value of the rest of 560 warrants was $30. The estimated fair value of the warrants was computed as of December 31, 2025 using Black-Scholes option-pricing model, with the following assumptions: stock price of $1.20, volatility of 96.27%, risk-free rate of 3.55%, annual dividend yield of 0% and expected life of 2.8 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 7, 2024, the Company issued 9,450 warrants with an exercise price of $30.00 exercisable until March 7, 2029 to Mast Hill and 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 9,450 warrants was classified as a derivative liability on March 7, 2024. On December 31, 2024, the estimated fair value of the 9,450 warrants was $8,191. The estimated fair value of the warrants was computed as of December 31, 2024 using Black-Scholes option-pricing model, with the following assumptions: stock price of $3.26, volatility of 90.43%, risk-free rate of 4.38%, annual dividend yield of 0% and expected life of 4.2 years. On April 3, 2025, 8,750 warrants held by Mast Hill were cashless exercised. On December 31, 2025, the estimated fair value of the 700 warrants was $82. The estimated fair value of the warrants was computed as of December 31, 2025 using Black-Scholes option-pricing model, with the following assumptions: stock price of $1.20, volatility of 98.70%, risk-free rate of 3.55%, annual dividend yield of 0% and expected life of 3.2 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 5, 2024, the Company issued 152,000 warrants to Mast Hill and a third party as a finder’s fee (See Note 11). 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. On December 31, 2024 and June 5, 2024, Management determined the probability of failing to make an amortization payment when due to be remote and as such the fair value of the 80,000 warrants with an exercise price of $7.50 exercisable until June 5, 2029, has been estimated to be zero. Accordingly, the fair value of the 72,000 warrants with an exercise price of $9.75 exercisable until June 5, 2029 was classified as a derivative liability on June 5, 2024. On December 31, 2024, the estimated fair value of the 72,000 warrants with an exercise price of $9.75 exercisable until June 5, 2029 as derivative liability was $112,666. The estimated fair value of the warrants was computed as of December 31, 2024 using Black-Scholes option-pricing model, with the following assumptions: stock price of $3.26, volatility of 88.64%, risk-free rate of 4.38%, annual dividend yield of 0% and expected life of 4.4 years. In April 2025, 66,667 warrants held by Mast Hill were cashless exercised. On December 31, 2025, the estimated fair value of the 5,333 warrants with an exercise price of $9.75 exercisable until June 5, 2029 was $1,854. The estimated fair value of the warrants was computed as of December 31, 2025 using Black-Scholes option-pricing model, with the following assumptions: stock price of $1.20, volatility of 101.69%, risk-free rate of 3.55%, annual dividend yield of 0% and expected life of 3.4 years. On June 5, 2025, the Second Warrant was not cancelled and was retained by Mast Hill. Accordingly, the initial fair value of the Second Warrant of $621,353 was classified as derivative liability on June 5, 2025 and recorded as interest expense – amortization of debt discount. On December 31, 2025, the estimated fair value of the 80,000 warrants with an exercise price of $7.50 exercisable until June 5, 2029 was $32,175. The estimated fair value of the warrants was computed as of December 31, 2025 using Black-Scholes option-pricing model, with the following assumptions: stock price of $1.20, volatility of 101.69%, risk-free rate of 3.55%, annual dividend yield of 0% and expected life of 3.4 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Increases or decreases in fair value of the derivative liability are included as a component of total other (expenses) income in the accompanying consolidated statements of operations and comprehensive loss. The changes to the derivative liability resulted in a decrease of $538,213 and $374,365 in the derivative liability and the corresponding increase in other income as a gain for the years ended December 31, 2025 and 2024, respectively.</p> 9000 67.5 9000 9000 3714 3.26 97 4.27 0 3.4 8333 667 11 1.2 99.55 3.47 0 2.4 3000 67.5 2028-07-06 3000 2778 222 94 3.26 95.85 4.27 0 3.5 222 4 1.2 98.29 3.55 0 2.5 7560 37.5 7560 3500 4060 2880 3.26 93.9 4.27 0 3.8 3500 560 30 1.2 96.27 3.55 0 2.8 9450 30 9450 9450 8191 3.26 90.43 4.38 0 4.2 8750 700 82 1.2 98.7 3.55 0 3.2 152000 80000 7.5 2029-06-05 72000 9.75 72000 9.75 112666 3.26 88.64 4.38 0 4.4 66667 5333 9.75 1854 1.2 101.69 3.55 0 3.4 621353 80000 7.5 32175 1.2 101.69 3.55 0 3.4 -538213 -374365 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 13 – <span style="text-decoration:underline">BRIDGE LOAN PAYABLE, NET</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On December 11, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Allen O Cage Jr., an individual, pursuant to which the 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 an original issue discount of $75,000. Accordingly, on December 11, 2025, Allen paid the purchase price of $300,000 to the Company for the bridge note. This bridge note shall not bear interest. The Company is required to make the following payments in cash to Allen under the bridge note: (i) $125,000 on February 15, 2026, (ii) $125,000 on March 15, 2026, and (iii) $125,000 on April 15, 2026. Upon the occurrence 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 <span style="-sec-ix-hidden: hidden-fact-781">five</span> (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 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 Purchase Agreement. The 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).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company recorded a total debt discount of $213,000 related to the original issue discount and common shares which the Company agreed to issue as a commitment fee to Allen, which will be amortized over the term of the bridge note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The bridge loan payable as of December 31, 2025 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">Principal amount</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">375,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Less: unamortized debt issuance costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(14,441</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(163,218</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Convertible note payable, net</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">197,341</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">For the year ended December 31, 2025, amortization of debt discount and debt issuance costs related to the bridge note amounted to $54,186, which have been included in interest expense — amortization of debt discount and debt issuance cost on the accompanying condensed consolidated statements of operations and comprehensive loss.</p> 2026-04-15 375000 75000 300000 125000 125000 125000 0.50 0.80 100000 100000 18846 213000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The bridge loan payable as of December 31, 2025 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">Principal amount</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">375,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Less: unamortized debt issuance costs</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(14,441</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(163,218</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Convertible note payable, net</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">197,341</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 375000 14441 163218 197341 54186 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b>NOTE 14 – <span style="text-decoration:underline">RELATED PARTY TRANSACTIONS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Services Provided by Related Party</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 $60,794 and $63,644 for the years ended December 31, 2025 and 2024, respectively, which have been included in professional fees on the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2025 and 2024, the accrued and unpaid services charge related to this director’s son amounted to $6,835 and $15,000, respectively, which have been included in accrued professional fees on the accompanying consolidated balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Accrued Liabilities and Other Payables – Related Parties</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b>  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In 2017, the Company acquired Genexosome’s subsidiary, which was dissolved in 2022, for a cash payment of $450,000. As of both December 31, 2025 and 2024, 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 parties on the accompanying consolidated balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">From time to time, Lab Services MSO paid shared expense on behalf of the Company. In addition, Lab Services MSO made a payment of $566,667 for equity method investment payable on behalf of the Company in 2024. 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, the Company and Lab Services MSO entered into a Redemption and Abandonment Agreement, whereby Lab Services MSO redeemed the 40% equity interest in Lab Services MSO held by the Company for cash and the surrender of its Series B Preferred Stock having a carrying value of $11,000,000. The aggregate cash amount to the Company for the redemption was $1,745,000. In addition, pursuant to the terms of the Redemption Agreement, all shares of the Company’s Series B Preferred Stock previously issued to SCBC Holdings LLC as partial consideration for the equity interests of Laboratory Services MSO, were permanently surrendered and relinquished to the Company for no additional consideration. The difference of $2,348,695 between the carrying value of the extinguished Series B Preferred Stock, the aggregate cash amount to the Company for the redemption, net of payables due to Lab Services MSO of $632,916, totaling $13,377,916, and the carrying value of the equity method investment of $11,029,221 was accounted for as an increase to additional paid-in capital (See Note 16 - Series B Convertible Preferred Stock Extinguished Related to Sale of Equity Method Investment). As of December 31, 2025 and 2024, the balance due to Lab Services MSO amounted to $0 and $632,916, respectively, which has been included in accrued liabilities and other payables — related parties on the accompanying consolidated balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Borrowings from Related Party</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Line of Credit </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 29, 2019, the Company entered into a Line of Credit Agreement (the “Line of Credit Agreement”) providing the Company with a $20 million line of credit (the “Line of Credit”) from Mr. Lu, the Company’s chairman of the Board of Directors. The Line of Credit allowed the Company to request loans thereunder and to use the proceeds of such loans for working capital and operating expense purposes until the facility matured on December 31, 2024. The loans are unsecured and are not convertible into equity of the Company. Loans drawn under the Line of Credit bear interest at an annual rate of 5% and each individual loan is payable three years from the date of issuance. The Company has a right to draw down on the line of credit and not at the discretion of Mr. Lu, the related party lender. The Company may, at its option, prepay any borrowings under the Line of Credit, in whole or in part at any time prior to maturity, without premium or penalty. The Line of Credit Agreement includes customary events of default. If any such event of default occurs, Mr. Lu may declare all outstanding loans under the Line of Credit to be due and payable immediately.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the year ended December 31, 2024, activity recorded for the Line of Credit is summarized in the following table:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">Outstanding principal under the Line of Credit at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">850,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Repayment of Line of Credit</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(400,000</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Reclassification of Line of Credit to advance from related party</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(450,000</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Outstanding principal under the Line of Credit at December 31, 2024</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-782">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the year ended December 31, 2024, the interest expense related to related party borrowing amounted to $42,445 and has been reflected as interest expense — related party on the accompanying consolidated statements of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Membership Interest Purchase Agreement</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 Mr. Lu desires to exercise the Option.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 18, 2026, the Company and Mr. Lu 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 RT9 for (i) $3,158,078 and (ii) the satisfaction, in full, of an approximately $5,900,000 balance due on an existing mortgage financing. This represents a total amended aggregated purchase price of approximately $9,000,000 (See Note 23 - Amended and Restated Membership Interest Purchase Agreement).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company received $3,158,078 and $3,108,106 from Mr. Lu as of December 31, 2025 and 2024, respectively, which was recorded as advance from pending sale of noncontrolling interest – related party on the accompanying consolidated balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Series D Convertible Preferred Stock Issued in Exchange of Series A Convertible Preferred Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 9, 2025, the Company entered into an exchange agreement with Wenzhao Lu, the Company’s chairman of the Board of Directors, pursuant to which Mr. Lu exchanged 9,000 shares of Series A Preferred Stock of the Company, having a carrying value of $9,000,000, for 5,000 shares of Series D Preferred Stock of the Company. The Company determined that the exchange of the Series A Preferred Stock for the Series D Preferred Stock resulted in the extinguishment of the Series A Preferred Stock. As a result, the difference between the carrying amount of the Series A Preferred Stock and the fair value of the Series D Preferred Stock of $162,473 was recognized as a deemed contribution in the year ended December 31, 2025 that increased additional paid-in capital and income available to common shareholders in calculating earnings per share (See Note 16 - Series D Convertible Preferred Stock Issued in Exchange of Series A Convertible Preferred Stock).</p> 60794 63644 6835 15000 450000 100000 100000 0.40 566667 0.40 11000000 1745000 2348695 632916 13377916 11029221 0 632916 20000000 0.05 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the year ended December 31, 2024, activity recorded for the Line of Credit is summarized in the following table:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">Outstanding principal under the Line of Credit at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">850,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Repayment of Line of Credit</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(400,000</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Reclassification of Line of Credit to advance from related party</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(450,000</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Outstanding principal under the Line of Credit at December 31, 2024</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-782">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 850000 400000 450000 42445 0.30 3000000 0.70 7000000 1 3158078 5900000 9000000 3158078 3108106 9000 9000000 5000 162473 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 15 – <span style="text-decoration:underline">INCOME TAXES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is governed by the Income Tax Law of the PRC and the U.S. Internal Revenue Code of 1986, as amended. Under the Income Tax Laws of PRC, Chinese companies are generally subject to an income tax at an effective rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. The Company has a cumulative deficit from its foreign subsidiary of $3,485,177 as of December 31, 2025, which is included in the consolidated accumulated deficit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s loss before income taxes includes the following components:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">United States loss before income taxes</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">18,175,072</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">7,639,148</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">China loss before income taxes</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">85,904</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">264,246</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 2.5pt">Total loss before income taxes</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">18,260,976</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">7,903,394</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Components of income taxes expense (benefit) consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b> </b></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Current:</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">U.S. federal</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-783">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-784">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">U.S. state and local</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-785">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-786">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">China</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-787">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-788">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total current income taxes expense</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-789">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-790">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Deferred:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; width: 78%; text-align: left">U.S. federal</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(3,585,262</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(4,874</td> <td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">U.S. state and local</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,213,867</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,650</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">China</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">77,641</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">93,437</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total deferred income taxes (benefit)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(4,721,488</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">86,913</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Change in valuation allowance</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">4,721,488</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(86,913</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 2.5pt">Total income taxes expense</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-791">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-792">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes the differences between the U.S. statutory rate and the Company’s effective tax rate for the years ended December 31, 2025 and 2024:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">U.S. federal rate</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">21.0</td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">21.0</td> <td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">U.S. state rate</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">7.1</td> <td style="text-align: left">%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">6.4</td> <td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Permanent difference</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(4.2</td> <td style="text-align: left">)%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1.3</td> <td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Non-US rate differential</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">0.0</td> <td style="text-align: left">%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">0.1</td> <td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">True ups</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1.9</td> <td style="text-align: left">%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(27.3</td> <td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">U.S. valuation allowance</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(25.9</td> <td style="padding-bottom: 1.5pt; text-align: left">)%</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">1.1</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total provision for income taxes</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">0.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">0.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the years ended December 31, 2025 and 2024, the Company did not incur any income taxes expense since it did not generate any taxable income in those periods. The Company’s foreign entity did not pay any income taxes during the years ended December 31, 2025 and 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">The Company’s components of deferred taxes as of December 31, 2025 and 2024 were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Deferred tax assets</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 78%; text-align: left">Stock-based compensation</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,410,079</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,598,257</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Disallowed business interest deduction</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-793">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-794">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Research and development expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">81,638</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">106,783</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Accrued directors’ compensation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">102,166</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">104,977</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Accrued settlement</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">301,047</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">140,904</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Partnership investment</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-795">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,167,965</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Lease liability</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,687</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,687</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Capital loss limitation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,846,243</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">149,394</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Net operating loss carryforward</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">22,942,772</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">17,648,077</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left">Total deferred tax assets, gross</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">26,685,632</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">21,918,044</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Valuation allowance</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(26,506,126</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(21,784,638</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total deferred tax assets, net</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">179,506</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">133,406</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Deferred tax liabilities</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Fixed assets and intangible assets book/tax basis difference</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(179,506</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(133,406</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Right-of-use assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-796">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-797">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total deferred tax liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(179,506</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(133,406</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 2.5pt">Net deferred tax assets</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-798">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-799">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025 and 2024, the Company’s both federal and state net operating loss carryforwards amounted to $80,038,036 and $60,926,204, respectively. As of December 31, 2025, the Company has $77,550,482 of U.S. federal net operating loss carryovers that have no expiration date, and $2,487,555 of the federal net operating loss and state net operating loss carry-forwards begin to expire in 2035.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, the Company had net operating loss carryforwards in China of $1,776,321 that begin to expire in 2026.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Additionally, as of December 31, 2025, $61,847 of the future utilization of the net operating loss carryforward to offset future taxable income is subject to special tax rules which may limit their usage under IRS Section 382 (Change of Ownership) and possibly the Separate Return Limitation Year (“SRLY”) rules.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A full valuation allowance has been provided against the Company’s deferred tax assets at December 31, 2025 as the Company believes it is more likely than not that sufficient taxable income will not be generated to realize these temporary differences. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has been notified and assessed an IRS Section 6038 penalty of $10,000 for failure to file a foreign entity tax disclosure. The Company has appealed the penalty and awaits the Internal Revenue Service’s review of the appeal. There is no assurance such appeal will be successful.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has not been audited by any jurisdiction since its inception. The Company is open for audit by the U.S. Internal Revenue Service and U.S. state tax jurisdictions from 2022 to 2025, and open for audit by the Chinese Ministry of Finance from 2021 to 2025.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There were no material uncertain tax positions as of December 31, 2025 and 2024. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense, if any. The Company does not have any significant uncertain tax positions or events leading to uncertainty in a tax position.</p> 0.25 3485177 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s loss before income taxes includes the following components:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">United States loss before income taxes</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">18,175,072</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">7,639,148</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">China loss before income taxes</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">85,904</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">264,246</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 2.5pt">Total loss before income taxes</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">18,260,976</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">7,903,394</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 18175072 7639148 85904 264246 18260976 7903394 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Components of income taxes expense (benefit) consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><b> </b></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Current:</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">U.S. federal</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-783">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-784">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">U.S. state and local</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-785">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-786">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">China</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-787">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-788">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total current income taxes expense</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-789">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-790">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Deferred:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; width: 78%; text-align: left">U.S. federal</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(3,585,262</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(4,874</td> <td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">U.S. state and local</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,213,867</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,650</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">China</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">77,641</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">93,437</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total deferred income taxes (benefit)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(4,721,488</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">86,913</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Change in valuation allowance</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">4,721,488</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(86,913</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 2.5pt">Total income taxes expense</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-791">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-792">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> -3585262 -4874 -1213867 -1650 77641 93437 -4721488 86913 -4721488 86913 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes the differences between the U.S. statutory rate and the Company’s effective tax rate for the years ended December 31, 2025 and 2024:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">U.S. federal rate</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">21.0</td> <td style="width: 1%; text-align: left">%</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">21.0</td> <td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">U.S. state rate</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">7.1</td> <td style="text-align: left">%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">6.4</td> <td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Permanent difference</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(4.2</td> <td style="text-align: left">)%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1.3</td> <td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Non-US rate differential</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">0.0</td> <td style="text-align: left">%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">0.1</td> <td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">True ups</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1.9</td> <td style="text-align: left">%</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(27.3</td> <td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">U.S. valuation allowance</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(25.9</td> <td style="padding-bottom: 1.5pt; text-align: left">)%</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">1.1</td> <td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total provision for income taxes</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">0.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">0.0</td> <td style="padding-bottom: 2.5pt; text-align: left">%</td></tr> </table> 0.21 0.21 0.071 0.064 -0.042 -0.013 0 0.001 0.019 -0.273 -0.259 0.011 0 0 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">The Company’s components of deferred taxes as of December 31, 2025 and 2024 were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Deferred tax assets</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 78%; text-align: left">Stock-based compensation</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,410,079</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,598,257</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Disallowed business interest deduction</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-793">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-794">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Research and development expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">81,638</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">106,783</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Accrued directors’ compensation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">102,166</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">104,977</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Accrued settlement</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">301,047</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">140,904</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Partnership investment</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-795">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,167,965</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Lease liability</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,687</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,687</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Capital loss limitation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,846,243</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">149,394</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Net operating loss carryforward</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">22,942,772</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">17,648,077</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left">Total deferred tax assets, gross</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">26,685,632</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">21,918,044</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Valuation allowance</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(26,506,126</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(21,784,638</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total deferred tax assets, net</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">179,506</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">133,406</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Deferred tax liabilities</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Fixed assets and intangible assets book/tax basis difference</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(179,506</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(133,406</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Right-of-use assets</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-796">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-797">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Total deferred tax liabilities</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(179,506</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(133,406</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 2.5pt">Net deferred tax assets</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-798">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-799">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 1410079 1598257 81638 106783 102166 104977 301047 140904 2167965 1687 1687 1846243 149394 22942772 17648077 26685632 21918044 26506126 21784638 179506 133406 179506 133406 179506 133406 80038036 60926204 77550482 2487555 1776321 61847 $10,000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 16 – <span style="text-decoration:underline">EQUITY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Series A Convertible Preferred Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company designated up to 15,000 shares of its previously undesignated preferred stock as Series A Preferred Stock. Each share of Series A Preferred Stock has a par value of $0.0001 per share and a stated value equal to $1,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The shares of Series A Preferred Stock have identical terms and include the terms as set forth below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Dividends.</i> Holders of Series A Preferred Stock (each, a “Series A Holder” and collectively, the “Series A Holders”) are entitled to receive, and the Company shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-common-stock basis, disregarding for such purpose any conversion limitations set forth in the Series A Certificate of Designations) to and in the same form as dividends actually paid on shares of the Company’s common stock when, as and if such dividends are paid on shares of the common stock. No other dividends shall be paid on shares of Series A Preferred Stock. The Company will not pay any dividends on its common stock unless the Company simultaneously complies with the terms set forth in the Series A Certificate of Designations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Liquidation.</i> Upon any dissolution, liquidation or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the Series A Holders will be entitled to receive out of the assets available for distribution to the 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 A Preferred Stock, (ii) ratably with any class or series of stock ranking on liquidation on parity with the Series A Preferred Stock and (iii) in preference and priority to the holders of the shares of the Company’s common stock, an amount equal to 100% of the Series A Stated Value, and no more, in proportion to the full and preferential amount that all shares of the Series A Preferred Stock are entitled to receive. The Company shall mail written notice of any Liquidation not less than twenty (20) days prior to the payment date stated therein, to each Series A Holder.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Conversion.</i> Each share of Series A Preferred Stock shall be convertible, at any time and from time to time from and after the later of (i) the date of the stockholder approval as described above, in accordance with the Nasdaq Stock Market Listing Rules, and (ii) the nine (9) month anniversary of the Closing (the “Initial Conversion Date”), at the option of the Series A Holder, into that number of shares of common stock (subject to the limitations set forth in Series A Certificate of Designations, determined by dividing the Stated Value of such share of Series A Preferred Stock by the conversion price (as defined below)). The Series A Holders may effect conversions by providing the Company with the form of conversion notice attached as Annex A to the Series A Certificate of Designations. The Series A Holders may convert such shares into shares of the Company’s common stock at a conversion price per share equal to the greater of (i) one hundred fifty dollars ($150.0) and (ii) ninety percent (90%) of the closing price of the Company’s common stock on Nasdaq on the day prior to receipt of a conversion notice, subject to adjustment for stock splits and similar matters. In addition, following the Initial Conversion Date, each Series A Holder agrees that it shall not be entitled to in any calendar month, sell a number of Series A conversion shares into the open market in an amount exceeding more than ten percent (10%) of the number of Series A conversion shares issuable upon conversion of the Series A Preferred Stock then held by such Series A Holder.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Conversion Price Adjustment:</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Stock Dividends and Stock Splits.</i> If the Company, at any time while the Series A Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents (which, for avoidance of doubt, shall not include any shares of common stock issued by the Company upon conversion of, or payment of a dividend on, the Series A Preferred Stock), (ii) subdivides outstanding shares of common stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price of the Series A Preferred Stock shall be multiplied by a fraction of which the numerator shall be the number of shares of common stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of common stock outstanding immediately after such event. Any of the foregoing adjustments shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Fundamental Transaction.</i> If, at any time while the Series A Preferred Stock is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind (a “Person”), (ii) the Company (and all of its subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of the Company’s common stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding common stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the common stock or any compulsory share exchange pursuant to which the common stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than fifty percent (50%) of the outstanding shares of common stock (not including any shares of common stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, the Series A Holder shall have the right to receive, for each conversion share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation set forth in the Series A Certificate of Designations on the conversion of the Series A Preferred Stock), the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and/or any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of common stock for which the Series A Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to the limitations set forth in the Series A Certificate of Designations on the conversion of the Series A Preferred Stock). For purposes of any such conversion, the determination of the conversion price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of common stock in such Fundamental Transaction, and the Company shall apportion the conversion price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of common stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Series A Holder shall be given the same choice as to the Alternate Consideration it receives upon such Fundamental Transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Voting Rights.</i> The Series A Holders will have no voting rights, except as otherwise required by the Delaware General Corporation Law. Notwithstanding the foregoing, as long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock in the Series A Certificate of Designations, (b) increase the number of authorized shares of Series A Preferred Stock, (c) authorize or issue an additional class or series of capital stock that ranks senior to the Series A Preferred Stock with respect to the distribution of assets on liquidation or (d) enter into any agreement with respect to any of the foregoing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Fractional Shares.</i> No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series A Preferred Stock. As to any fraction of a share of Company common stock which a Series A Holder would otherwise be entitled to upon such conversion, the Company will, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the conversion price or round up to the next whole share. Notwithstanding the foregoing, nothing shall prevent any Series A Holder from converting fractional shares of Series A Preferred Stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2024, 9,000 shares of Series A Preferred Stock were issued and outstanding. On January 9, 2025, the Company entered into an exchange agreement with Wenzhao Lu, the Company’s chairman of the Board of Directors, pursuant to which Mr. Lu exchanged 9,000 shares of Series A Preferred Stock of the Company for 5,000 shares of Series D Preferred Stock of the Company (See Note 16 - Series D Convertible Preferred Stock Issued in Exchange of Series A Convertible Preferred Stock). As of December 31, 2025, there were no shares of Series A Preferred Stock remain outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Series B Convertible Preferred Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company designated up to 15,000 shares of its previously undesignated preferred stock as Series B Preferred Stock. Each share of Series B Preferred Stock has a par value of $0.0001 per share and a stated value equal to $1,000.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The shares of Series B Preferred Stock have identical terms and include the terms as set forth below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Dividends.</i> The holders of Series B Preferred Stock (each, a “Series B Holder” and collectively, the “Series B Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of Series B Preferred Stock equal (on an as-if-converted-to-common-stock basis, disregarding for such purpose any conversion limitations set forth in the Series B Certificate of Designations) to and in the same form as dividends actually paid on shares of the Company’s common stock when, as and if such dividends are paid on shares of the common stock. No other dividends shall be paid on shares of Series B Preferred Stock. The Company will not pay any dividends on its common stock unless the Company simultaneously complies with the terms set forth in the Series B Certificate of Designations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Rank.</i> The Series B Preferred Stock will rank subordinate to the shares of the Company’s Series A Preferred Stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Liquidation. </i>Upon any Liquidation, the Series B Holders will 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 B 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 B Preferred Stock and (iii) in preference and priority to the holders of the shares of common stock, an amount equal to one hundred percent (100%) of the Series B Stated Value and no more, in proportion to the full and preferential amount that all shares of the Series B Preferred Stock are entitled to receive. The Company shall mail written notice of any such Liquidation not less than twenty (20) days prior to the payment date stated therein, to each Series B Holder.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Conversion.</i> Each share of Series B Preferred Stock shall be convertible, at any time and from time to time from and after the later of (i) the date of the stockholder approval and (ii) February 9, 2024 (the “Lock Up Period”), at the option of the Series B Holder thereof, into that number of shares of common stock (subject to the limitations set forth in Series B Certificate of Designations determined by dividing the Series B Stated Value of such share of Series B Preferred Stock by the conversion price of the Series B Preferred Stock). Series B Holders may effectuate conversions by providing the Company with the form of conversion notice attached as Annex A to the Series B Certificate of Designations. The Series B Preferred Stock will be convertible into shares of the Company’s common stock at a conversion price per share equal to $56.70, subject to the adjustments set forth in the Series B Certificate of Designations. Notwithstanding the foregoing or the transactions contemplated by the Amended MIPA, until the consummation of the Lock Up Period, the Series B Holders shall not, directly or indirectly, sell, transfer or otherwise dispose of any Series B Preferred Stock issued upon conversion of the Series B conversion shares or pursuant to the Equity Earnout Payment (the “Restricted Securities”) without Company’s prior written consent; provided, however, the Series B Holders may sell, transfer or otherwise dispose of Restricted Securities to an Affiliate, as defined in the Amended MIPA, of a Series B Holder without Company’s prior written consent; provided, further, that such Series B Holder provide prompt written notice to Company of such transfer, including the name and contact information of the Affiliate transferee, and such Affiliate transferee agrees in writing to be bound by the terms of the transaction documents contemplated by the Amended MIPA to which the Series B Holder is a party (which agreement shall also be provided to Company with such notice). After the expiration of the Lock Up Period, the Series B Holder agrees that it and any of its Affiliate transferees shall not be entitled to in any calendar month, sell a number of shares of Company common stock into the open market in an amount exceeding more than ten percent (10%) of the total number of shares of Company common stock issuable upon conversion of the Company common stock then held by the Seller and its Affiliates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Conversion Price Adjustment:</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Stock Dividends and Stock Splits.</i> If the Company, at any time while the Series B Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents (which, for avoidance of doubt, shall not include any shares of common stock issued by the Company upon conversion of, or payment of a dividend on, the Series B Preferred Stock), (ii) subdivides outstanding shares of common stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price of the Series B Preferred Stock shall be multiplied by a fraction of which the numerator shall be the number of shares of common stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of common stock outstanding immediately after such event. Any of the foregoing adjustments shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Fundamental Transaction.</i> If, at any time while the Series B Preferred Stock is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of the Company’s common stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding common stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the common stock or any compulsory share exchange pursuant to which the common stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a Fundamental Transaction, then, at the closing of such Fundamental Transaction, without any action on the part of the Series B Holder, the Series B Holder shall have the right to receive, for each conversion share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in the Series B Certificate of Designations on the conversion of the Series B Preferred Stock), the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and/or any Alternate Consideration receivable as a result of such Fundamental Transaction by a holder of the number of shares of common stock for which the Series B Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to the limitations set forth in the Series B Certificate of Designations on the conversion of the Series B Preferred Stock). For purposes of any such conversion, the determination of the conversion price of the Series B Preferred Stock shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of common stock in such Fundamental Transaction, and the Company shall apportion the conversion price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of common stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Series B Holder shall be given the same choice as to the Alternate Consideration it receives upon such Fundamental Transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Voting Rights</i>. The Series B Holders will have no voting rights, except as otherwise required by the Delaware General Corporation Law. Notwithstanding the foregoing, in addition, as long as any shares of Series B Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series B Preferred Stock, voting as a separate class, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock in the Series B Certificate of Designations, (b) increase the number of authorized shares of Series B Preferred Stock, (c) except with respect to the Series A Preferred Stock, authorize or issue an additional class or series of capital stock that ranks senior to the Series B Preferred Stock with respect to the distribution of assets on liquidation or (d) enter into any agreement with respect to any of the foregoing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Fractional Shares.</i> No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series B Preferred Stock. As to any fraction of a share which a Series B Holder would otherwise be entitled to upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the conversion price or round up to the next whole share. Notwithstanding the foregoing, nothing shall prevent any Series B Holder from converting fractional shares of Series B Preferred Stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2024, 11,000 shares of Series B Preferred Stock were issued and outstanding. 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, the Company and Lab Services MSO entered into a Redemption and Abandonment Agreement, whereby Lab Services MSO redeemed the 40% equity interest in Lab Services MSO held by the Company for cash and the surrender of its Series B Preferred Stock having a carrying value of $11,000,000. Pursuant to the terms of the Redemption Agreement, all shares of the Company’s Series B Preferred Stock previously issued to SCBC Holdings LLC as partial consideration for the equity interests of Lab Services MSO, were permanently surrendered and relinquished to the Company for no additional consideration (See Note 16 - Series B Convertible Preferred Stock Extinguished Related to Sale of Equity Method Investment). As of December 31, 2025, there were no shares of Series B Preferred Stock remain outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Series C Convertible Preferred Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On 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. Each share of Series C Preferred Stock has a stated value of $1,000.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Holders of the Series C Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Each 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 beneficial ownership limitation of 19.99% was amended to 4.99%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025 and 2024, 3,800 and 3,500 shares of Series C Preferred Stock were issued and outstanding, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Series D Convertible Preferred Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Holders of the Series D Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Each share of Series D Preferred Stock shall be convertible into common stock (the “Series D Conversion Shares”) at a conversion per share equal to $2.41, at the option of the holder, at any time after the Company has obtained shareholder approval for the issuance 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, 5,000 shares of Series D Preferred Stock were issued and outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Series E Convertible Preferred Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The 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) <i>pari passu</i> 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) <i>pari passu</i> with Series C Convertible Preferred Stock of the Company with respect to its rights, preferences and restrictions, and (iv) <i>pari passu</i> the Series D Convertible Preferred Stock of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Holders of the Series E Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law. Notwithstanding the foregoing, in addition, as long as any shares of Series E Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Series E Preferred Stock, voting as a separate class, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock in this Certificate of Designation, (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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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. 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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition, the Company shall not issue any shares of Common Stock upon conversion of the Series E Preferred Stock or otherwise pursuant to the terms of the Series E Certificate of Designation if the issuance of such shares of Common Stock would exceed the aggregate number 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 required, which opinion shall be reasonably satisfactory to the Required Holders (as defined in the Series E Certificate of Designation).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 12, 2025, the Company issued 19,500 shares of its Series E Convertible Preferred Stock as consideration for the purchase of 100% of equity interest of RPM. The Series E Preferred Stock is convertible into shares of the Company’s common stock at a conversion price per share equal to $1.50, subject to certain conditions which include, among others, limiting the number of shares of Series E Preferred Stock that can convert if such conversion would exceed the aggregate number of shares of Common Stock which the Company may issue upon such conversion without breaching the Company’s obligations under the NASDAQ listing rules and regulations (See Note 4).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluated the features of the Series E Convertible Preferred Stock under ASC 480, and classified them as permanent equity because the Series E Convertible Preferred Stock is not mandatorily or contingently redeemable at the stockholder’s option and the liquidation preference that exists does not fall within the guidance of SEC Accounting Series Release No. 268 – <i>Presentation in Financial Statements of “Redeemable Preferred Stocks”</i> (“ASR 268”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, 19,500 shares of Series D Preferred Stock were issued and outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Series D Convertible Preferred Stock Issued in Exchange of Series A Convertible Preferred Stock</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 9, 2025, the Company entered into an exchange agreement with Wenzhao Lu, the Company’s chairman of the Board of Directors, pursuant to which Mr. Lu exchanged 9,000 shares of Series A Preferred Stock of the Company, having a carrying value of $9,000,000, for 5,000 shares of Series D Preferred Stock of the Company. The Company determined that the exchange of the Series A Preferred Stock for the Series D Preferred Stock resulted in the extinguishment of the Series A Preferred Stock. As a result, the difference between the carrying amount of the Series A Preferred Stock and the fair value of the Series D Preferred Stock of $162,473 was recognized as a deemed contribution in the year ended December 31, 2025 that increased additional paid-in capital and income available to common shareholders in calculating earnings per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Each share of Series D Preferred Stock is convertible into common stock of the Company (the “Series D Conversion Shares”) at a conversion per share equal to $2.41, which approximated the market price at the date of transaction, at the option of the holder, at any time after the Company has obtained shareholder approval for the issuance of the Series D Conversion Shares pursuant to the rules of the Nasdaq Stock Market.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluated the features of the Series D Preferred Stock under ASC 480, and classified them as permanent equity because the Series D Preferred Stock is not mandatorily or contingently redeemable at the stockholder’s option and the liquidation preference that exists does not fall within the guidance of SEC Accounting Series Release No. 268 – <i>Presentation in Financial Statements of “Redeemable Preferred Stocks”</i> (“ASR 268”).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Series B Convertible Preferred Stock Extinguished Related to Sale of Equity Method Investment</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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, the Company and Lab Services MSO entered into a Redemption and Abandonment Agreement, whereby Lab Services MSO redeemed the 40% equity interest in Lab Services MSO held by the Company for cash and the surrender of its Series B Preferred Stock having a carrying value of $11,000,000. The aggregate cash amount to the Company for the redemption was $1,745,000. In addition, pursuant to the terms of the Redemption Agreement, all shares of the Company’s Series B Preferred Stock previously issued to SCBC Holdings LLC as partial consideration for the equity interests of Laboratory Services MSO, were permanently surrendered and relinquished to the Company for no additional consideration. The difference of $2,348,695 between the carrying value of the extinguished Series B preferred stock, the aggregate cash amount to the Company for the redemption, net of payables due to Lab Services MSO of $632,916, totaling $13,377,916, and the carrying value of the equity method investment of $11,029,221 was accounted for as an increase to additional paid-in capital.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Series C Convertible Preferred Stock Sold for Cash</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">During the year ended December 31, 2024, the Company sold an aggregate of 3,500 shares of Series C Convertible Preferred stock and received proceeds of $3,500,000. Each share of Series C Convertible Preferred Stock is convertible into common stock of the Company (the “Conversion Shares”) at a conversion per share equal to $2.41, which approximated the market price at the date of transaction, 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 Conversion Shares pursuant to the rules of the Nasdaq Stock Market (the “Shareholder Approval”) and (ii) the one year anniversary of the date of the first issuance of any shares of the Series C Convertible Preferred Stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2025, the Company sold 300 shares of Series C Convertible Preferred Stock and received net proceeds of $290,000 after deducting offering expenses of $10,000. Each share of Series C Convertible Preferred Stock is convertible into common stock of the Company (the “Conversion Shares”) at a conversion per share equal to $2.41, which approximated the market price at the date of transaction. The Company is not required to issue any of the Company’s common stock upon conversion of the Series C Convertible Preferred Stock until the shareholder approval for such issuance is obtained by the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluated the features of the Series C Convertible Preferred Stock under ASC 480, and classified them as permanent equity because the Series C Convertible Preferred Stock is not mandatorily or contingently redeemable at the stockholder’s option and the liquidation preference that exists does not fall within the guidance of SEC Accounting Series Release No. 268 – <i>Presentation in Financial Statements of “Redeemable Preferred Stocks”</i> (“ASR 268”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares Issued as Convertible Note Payable Commitment Fee</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">During the year ended December 31, 2024, the Company issued a total of 33,800 shares of its common stock as commitment fee for the purchase of March 2024 Convertible Note and June 2024 Convertible Note. These shares were valued at $320,546, the fair market value on the grant dates using the reported closing share prices on the dates of grant, and the Company recorded it as debt discount.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In July 2025, the Company issued a total of 10,000 shares of its common stock as commitment fee for the purchase of July 2025 Convertible Note. These shares were valued at $26,800, 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 11 - <i>July 2025 Convertible Note</i>).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Common Shares Sold for Cash</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2023, the Company entered into a sales agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (“Roth”) under which the Company may offer and sell from time to time shares of its common stock having an aggregate offering price of up to $3.5 million. During the year ended December 31, 2024, Roth sold an aggregate of 281,843 shares of common stock at an average price of $10.14 per share to investors and the Company recorded net proceeds of $2,544,311, net of commission and other offering costs of $313,541. </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares and Warrants Sold for Cash</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 14, 2025, the Company entered into that certain securities purchase agreement (the “Securities Purchase Agreement”), with an accredited investor, Brown Stone Capital Ltd. (the “Brown Stone”), pursuant to which the Company agreed to issue and sell to Brown Stone, upon the terms and conditions set forth in the Securities Purchase Agreement, 121,200 shares of the Company’s common stock and pre-funded warrants to purchase 354,300 shares of the Company’s common stock, in exchange for $475,500. The total number of shares of the Company’s common stock issuable pursuant to the pre-funded warrants is 354,300 shares. The closing of the transaction occurred on July 17, 2025, which is when the Company received net proceeds of $450,500 after deducting offering expenses of $25,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the pre-funded warrants was $832,576 and was based on the Black-Scholes pricing model. Input assumptions used were as follows: stock price per share of $2.35, a risk-free interest rate of 4.01%; expected volatility of 91.10%; expected life of 5 years; and expected dividend yield of 0%. $354,297 of the total gross proceeds was allocated to the warrants based on the relative fair value allocation method, which has been reflected in shareholders’ equity. The warrants were classified in shareholders’ equity as the number of shares were fixed and determinable, and no other provisions precluded equity treatment. $121,203 of the total gross proceeds was allocated as the value of common shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The direct costs related to the issuance of the common shares and pre-funded warrants were $25,000. These direct costs were recorded as an offset against gross proceeds with $18,628 being recorded in additional paid-in capital and $6,372 being recorded in common shares on a relative fair value basis.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares Issued for Services</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2024, the Company issued a total of 145,153 shares of its common stock for services rendered. These shares were valued at $530,350, 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 $470,350 for the year ended December 31, 2024 and reduced accrued liabilities of $60,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2025, the Company issued a total of 606,494 shares of its common stock for services rendered and to be rendered. These shares were valued at $1,880,786, 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 $1,829,871 for the year ended December 31, 2025 and reduced accrued liabilities of $42,385 and recorded prepaid expense of $8,530 as of December 31, 2025 which will be amortized over the rest of corresponding service periods.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Common Shares Issued for Warrant Exercise</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On November 18, 2024, pursuant to the terms of related warrant agreements, the Company issued 42,381 shares of its common stock upon cashless exercise of warrants.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March and April 2025, pursuant to the terms of related warrant agreements, the Company issued an aggregate of 429,181 shares of its common stock upon cashless exercise of warrants.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Common Shares Issued for Adjustment for 1:15 Reverse Split</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company issued 206,033 shares of its common stock, resulting from the rounding up of the fractional shares at the one-for-fifteen reverse stock split effected on October 28, 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Pre-Funded Warrants Issued for Debt Modification</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On December 15, 2024, 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. 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 share. The Pre-Funded Warrants were classified as a component of permanent equity as they are freestanding financial instrument that is immediately exercisable, does not embody an obligation for the Company to repurchase its own shares and permit the holder to receive a fixed number of shares of common stock upon exercise.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares Issued for Debt Conversion</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 29, 2025, the Company and the June 2024 Convertible Note holder entered into that certain waiver, pursuant to which, during the period from June 1, 2025 through December 31, 2025, the investor converted its June 2024 Convertible Note in the principal amount of $2,010,827 and unpaid interest of $233,795 into 2,244,622 shares of common stock of the Company at a per share price of $1.00 (See Note 11).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Options</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at December 31, 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td colspan="14" style="border-bottom: Black 1.5pt solid; text-align: center">Options Outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Options Exercisable</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td colspan="2" style="border-bottom: Black 1.5pt solid">Range of Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number<br/> Outstanding at <br/> December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Life (Years)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number<br/> Exercisable at <br/> December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted<br/> Average<br/> Exercise <br/>Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%">$</td> <td style="width: 44%; text-align: left">2.93 – 31.20</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">15,419</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">2.82</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">6.49</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">15,419</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">6.49</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left">48.75 – 123.00</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">18,117</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1.23</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">79.87</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">18,117</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">79.87</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>$</td> <td style="text-align: left; padding-bottom: 1.5pt">154.50 – 228.00</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">7,633</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt; text-align: right">4.00</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">225.72</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">7,633</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">225.72</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left; padding-bottom: 2.5pt">2.93 – 228.00</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">41,169</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; text-align: right">2.34</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">79.43</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">41,169</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">79.43</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Stock option activity for the years ended December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Options</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Outstanding at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">56,880</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">149.03</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,265</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">4.13</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Expired</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(14,666</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(275.14</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Outstanding at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">52,479</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">85.45</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,665</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">3.26</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Expired / cancelled / forfeited</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(13,975</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(87.50</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Outstanding at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">41,169</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">79.43</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Options exercisable at December 31, 2025</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">41,169</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">79.43</td> <td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The aggregate intrinsic value of both stock options outstanding and stock options exercisable at December 31, 2025 was $0.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair values of options granted during the year ended December 31, 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 year ended December 31, 2025 was $6,115.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair values of options granted during the year ended December 31, 2024 were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: volatility of 83.10% - 96.36%, risk-free rate of 3.47% - 4.79%, annual dividend yield of 0%, and expected life of 3.00 - 5.00 years. The aggregate fair value of the options granted during the year ended December 31, 2024 was $28,694.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the years ended December 31, 2025 and 2024, stock-based compensation expense (adjustment) associated with stock options granted amounted to $(13,409) and $51,159, of which, $14,829 and $19,878, respectively, was recorded as compensation and related benefits, and $(28,238) and $31,281 was recorded as professional fees, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of the status of the Company’s nonvested stock options granted as of December 31, 2025 and changes during the years ended December 31, 2025 and 2024 is presented below:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Options</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Nonvested at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">5,311</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">23.55</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,265</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">4.13</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(9,633</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(10.31</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Nonvested at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">5,943</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">11.54</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,665</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">3.26</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Cancelled</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,853</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(27.40</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(6,755</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(3.92</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Nonvested at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-800">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right"><div style="-sec-ix-hidden: hidden-fact-801">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Warrants (Except Pre-Funded Warrants)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at December 31, 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td colspan="14" style="border-bottom: Black 1.5pt solid; text-align: center">Warrants Outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Warrants Exercisable</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td colspan="2" style="border-bottom: Black 1.5pt solid">Range of Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">Number<br/> Outstanding at <br/> December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Remaining Contractual Life (Years)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">Number <br/> Exercisable <br/> at December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted <br/> Average <br/> Exercise <br/>Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%">$</td> <td style="width: 44%; text-align: left">7.50 – 37.50</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">86,593</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">3.42</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">8.01</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">86,593</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">8.01</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left">67.50</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">889</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2.42</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">67.50</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">889</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">67.50</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>$</td> <td style="text-align: left; padding-bottom: 1.5pt">187.50</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">8,264</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt; text-align: right">1.30</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">187.50</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">8,264</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">187.50</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left; padding-bottom: 2.5pt">7.50 – 187.50</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">95,746</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; text-align: right">3.23</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">24.06</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">95,746</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">24.06</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Stock warrant activity for the years ended December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of<br/> Warrants</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Outstanding at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">43,035</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">75.53</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Issued</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">169,527</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">10.28</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cancelled (*)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(23,288</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(32.85</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Exercised</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(6,278</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(50.77</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">182,996</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">21.37</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Exercised</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(87,250</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(18.41</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Outstanding and exercisable at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">95,746</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">24.06</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in; text-align: left">*</td> <td style="text-align: justify">Second Warrant, which was issued on May 23, 2023, July 6, 2023, October 9, 2023, and March 7, 2024, was cancelled in June 2024. Second Warrant, which was issued on June 5, 2024, is still outstanding as of December 31, 2025 and 2024.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The aggregate intrinsic value of both stock warrants outstanding and stock warrants exercisable at December 31, 2025 was $0.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Warrants Issued in March 2024</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In connection with the issuance of March 2024 Convertible Note (See Note 11), the Company issued (i) a warrant to purchase 8,750 shares of common stock with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 (“First Warrant”), (ii) a warrant to purchase 8,077 shares of common stock with an exercise price of $19.50 (“Second Warrant”), which warrant was never fair valued and was cancelled and extinguished against payment of the March 2024 Convertible Note, to Mast Hill; and issued a warrant to purchase 700 shares of common stock with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 to a third party as a finder’s fee.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that all the warrants issued to Mast Hill and a third party as a finder’s fee meet the definition of a derivative liability, as the Company cannot avoid a net cash settlement under certain circumstances. The fair value of the 9,450 warrants with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 was classified as a derivative liability on March 7, 2024. The fair values of the 9,450 warrants with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 issued on March 7, 2024 were computed using the Black-Scholes option-pricing model with the following assumptions: stock price of $6.00, volatility of 85.24%, risk-free rate of 4.07%, annual dividend yield of 0% and expected life of 5 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The warrants with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 issued to Mast Hill to purchase 8,750 shares of the Company’s common stock were treated as a discount on the convertible note payable and were valued at $20,374 and were amortized over the term of the March 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The warrants with an exercise price of $30.00 exercisable until the five-year anniversary of March 7, 2024 issued to a third party as a finder’s fee to purchase 700 shares of the Company’s common stock were treated as convertible debt issuance costs and were valued at $1,679 and were amortized over the term of the March 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Warrants Issued in June 2024</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the issuance of June 2024 Convertible Note (See Note 11), the Company issued (i) a warrant to purchase 66,667 shares of common stock with an exercise price of $9.75 exercisable until the five-year anniversary of June 5, 2024 (“First Warrant”), (ii) a warrant to purchase 80,000 shares of common stock with an exercise price of $7.50 exercisable until the five-year anniversary of June 5, 2024 (“Second Warrant”), which warrant shall be cancelled and extinguished against payment of the June 2024 Convertible Note, to Mast Hill; and issued a warrant to purchase 5,333 shares of common stock with an exercise price of $9.75 exercisable until the five-year anniversary of June 5, 2024 to a third party as a finder’s fee.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Based upon the Company’s analysis of the criteria contained in ASC 815, the Company determined that all the warrants issued to Mast Hill and a third party as a finder’s fee meet the definition of a derivative liability, as the Company cannot avoid a net cash settlement under certain circumstances. On March 31, 2025 and June 5, 2024, management determined the probability of failing to make an amortization payment when due to be remote and as such the fair value of the 80,000 warrants with an exercise price of $7.50 exercisable until the five-year anniversary of June 5, 2024, which warrant shall be cancelled and extinguished against payment of the June 2024 Convertible Note, has been estimated to be zero. Accordingly, the fair value of the 72,000 warrants with an exercise price of $9.75 exercisable until the five-year anniversary of June 5, 2024 was classified as a derivative liability on June 5, 2024. The fair values of the 72,000 warrants with an exercise price of $9.75 exercisable until the five-year anniversary of June 5, 2024 issued on June 5, 2024 were computed using the Black-Scholes option-pricing model with the following assumptions: stock price of $10.39, volatility of 85.72%, risk-free rate of 4.31%, annual dividend yield of 0% and expected life of 5 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The warrants with an exercise price of $9.75 exercisable until the five-year anniversary of June 5, 2024 issued to Mast Hill to purchase 66,667 shares of the Company’s common stock were treated as a discount on the convertible note payable and were valued at $418,194 and were amortized over the term of the June 2024 Convertible Note.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The warrants with an exercise price of $9.75 exercisable until the five-year anniversary of June 5, 2024 issued to a third party as a finder’s fee to purchase 5,333 shares of the Company’s common stock were treated as convertible debt issuance costs and were valued at $39,221 and were amortized over the term of the June 2024 Convertible Note.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Warrants Cancelled in June 2024</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As of June 5, 2024, the Company paid in full of its outstanding May 2023 Convertible Note, July 2023 Convertible Note, October 2023 Convertible Note, and March 2024 Convertible Note and cancelled 23,288 warrants since these convertible notes were fully extinguished.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Warrants Exercised </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On November 18, 2024, 6,278 warrants were cashless exercised.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March and April 2025, 87,250 warrants were cashless exercised.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">A summary of the status of the Company’s nonvested stock warrants issued as of December 31, 2025 and changes during the years ended December 31, 2025 and 2024 was presented below:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Warrants</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Nonvested at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">15,211</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">39.90</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Issued</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">169,527</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">10.28</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cancelled</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(23,288</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(32.85</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(81,450</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(12.10</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Nonvested at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">80,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">7.50</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(80,000</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(7.50</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Nonvested at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-802">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right"><div style="-sec-ix-hidden: hidden-fact-803">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Pre-Funded Warrants</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The number of pre-funded warrants outstanding as of December 31, 2025 is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">Description</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number Outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Pre-funded warrants issued in December 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">150,000</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">0.01</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Pre-funded warrants issued in July 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">354,300</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">0.0001</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Outstanding at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">504,300</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">0.0030</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">A summary of pre-funded warrant activity during the years ended December 31, 2025 and 2024 is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Pre-Funded Warrants</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding at January 1, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-804">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-805">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 78%; text-align: left; padding-bottom: 1.5pt">Pre-funded warrants issued</td> <td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; width: 8%; text-align: right">150,000</td> <td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td> <td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="width: 1%; padding-bottom: 1.5pt; text-align: left">$</td> <td style="width: 8%; padding-bottom: 1.5pt; text-align: right">0.01</td> <td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">150,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">0.01</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Pre-funded warrants issued</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">354,300</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">0.0001</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Outstanding at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">504,300</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">0.0030</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 100000000 10000000 15000 0.0001 1000 1 150 0.90 0.10 0.50 -0.50 1 9000 9000 9000 5000 0 15000 0.0001 1000 1 56.7 0.10 0.50 11000 11000 0.40 11000000 10000 0.0001 1000 1 2.41 0.1999 0.1999 0.0499 3800 3800 3500 3500 5000 0.0001 1000 1 2.41 0.0499 5000 5000 19500 0.0001 1000 1 1.5 0.0499 19500 1 1.5 19500 19500 9000 9000000 5000 162473 2.41 0.40 11000000 1745000 2348695 632916 13377916 11029221 3500 3500000 2.41 300 290000 10000 2.41 33800 320546 10000 26800 3500000 281843 10.14 2544311 313541 121200 354300 475500 354300 450500 25000 832576 2.35 0.0401 0.911 P5Y 0 354297 121203 25000 18628 6372 145153 470350 60000 1880786 1829871 42385 42381 429181 206033 150000 0.01 2010827 233795 2244622 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at December 31, 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td colspan="14" style="border-bottom: Black 1.5pt solid; text-align: center">Options Outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Options Exercisable</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td colspan="2" style="border-bottom: Black 1.5pt solid">Range of Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number<br/> Outstanding at <br/> December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Life (Years)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number<br/> Exercisable at <br/> December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted<br/> Average<br/> Exercise <br/>Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%">$</td> <td style="width: 44%; text-align: left">2.93 – 31.20</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">15,419</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">2.82</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">6.49</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">15,419</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">6.49</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left">48.75 – 123.00</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">18,117</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1.23</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">79.87</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">18,117</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">79.87</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>$</td> <td style="text-align: left; padding-bottom: 1.5pt">154.50 – 228.00</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">7,633</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt; text-align: right">4.00</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">225.72</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">7,633</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">225.72</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left; padding-bottom: 2.5pt">2.93 – 228.00</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">41,169</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; text-align: right">2.34</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">79.43</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">41,169</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">79.43</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 2.93 31.2 15419 P2Y9M25D 6.49 15419 6.49 48.75 123 18117 P1Y2M23D 79.87 18117 79.87 154.5 228 7633 P4Y 225.72 7633 225.72 2.93 228 41169 P2Y4M2D 79.43 41169 79.43 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Stock option activity for the years ended December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Options</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Outstanding at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">56,880</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">149.03</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,265</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">4.13</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Expired</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(14,666</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(275.14</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Outstanding at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">52,479</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">85.45</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,665</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">3.26</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Expired / cancelled / forfeited</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(13,975</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(87.50</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Outstanding at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">41,169</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">79.43</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Options exercisable at December 31, 2025</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">41,169</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">79.43</td> <td style="text-align: left"> </td></tr> </table> 56880 149.03 10265 4.13 14666 275.14 52479 85.45 2665 3.26 13975 87.5 41169 79.43 41169 79.43 0 1.051 0.0429 0 P3Y 6115 0.831 0.0347 0.0479 0 P3Y P5Y -51159 14829 19878 28238 31281 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of the status of the Company’s nonvested stock options granted as of December 31, 2025 and changes during the years ended December 31, 2025 and 2024 is presented below:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Options</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Nonvested at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">5,311</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">23.55</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">10,265</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">4.13</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(9,633</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(10.31</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Nonvested at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">5,943</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">11.54</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Granted</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,665</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">3.26</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Cancelled</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,853</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(27.40</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(6,755</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(3.92</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Nonvested at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-800">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right"><div style="-sec-ix-hidden: hidden-fact-801">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">A summary of the status of the Company’s nonvested stock warrants issued as of December 31, 2025 and changes during the years ended December 31, 2025 and 2024 was presented below:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Warrants</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Nonvested at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">15,211</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">39.90</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Issued</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">169,527</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">10.28</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cancelled</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(23,288</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(32.85</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(81,450</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(12.10</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Nonvested at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">80,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">7.50</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Vested</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(80,000</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(7.50</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Nonvested at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-802">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right"><div style="-sec-ix-hidden: hidden-fact-803">-</div></td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 5311 23.55 10265 4.13 9633 10.31 5943 11.54 2665 3.26 1853 27.4 6755 3.92 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at December 31, 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td colspan="14" style="border-bottom: Black 1.5pt solid; text-align: center">Warrants Outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Warrants Exercisable</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td colspan="2" style="border-bottom: Black 1.5pt solid">Range of Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">Number<br/> Outstanding at <br/> December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Remaining Contractual Life (Years)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">Number <br/> Exercisable <br/> at December 31, <br/> 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted <br/> Average <br/> Exercise <br/>Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%">$</td> <td style="width: 44%; text-align: left">7.50 – 37.50</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">86,593</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">3.42</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">8.01</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">86,593</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">8.01</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left">67.50</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">889</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2.42</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">67.50</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">889</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">67.50</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>$</td> <td style="text-align: left; padding-bottom: 1.5pt">187.50</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">8,264</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt; text-align: right">1.30</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">187.50</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">8,264</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">187.50</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>$</td> <td style="text-align: left; padding-bottom: 2.5pt">7.50 – 187.50</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">95,746</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt; text-align: right">3.23</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">24.06</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">95,746</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">24.06</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 7.5 37.5 86593 P3Y5M1D 8.01 86593 8.01 67.5 889 P2Y5M1D 67.5 889 67.5 187.5 8264 P1Y3M18D 187.5 8264 187.5 7.5 187.5 95746 P3Y2M23D 24.06 95746 24.06 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Stock warrant activity for the years ended December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of<br/> Warrants</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Outstanding at January 1, 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">43,035</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">75.53</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Issued</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">169,527</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">10.28</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cancelled (*)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(23,288</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(32.85</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Exercised</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(6,278</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(50.77</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">182,996</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">21.37</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Exercised</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(87,250</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">(18.41</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Outstanding and exercisable at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">95,746</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">24.06</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in; text-align: left">*</td> <td style="text-align: justify">Second Warrant, which was issued on May 23, 2023, July 6, 2023, October 9, 2023, and March 7, 2024, was cancelled in June 2024. Second Warrant, which was issued on June 5, 2024, is still outstanding as of December 31, 2025 and 2024.</td></tr> </table> 43035 75.53 169527 10.28 23288 32.85 6278 50.77 182996 21.37 87250 18.41 95746 24.06 0 8750 30 8077 19.5 700 30 9450 30 9450 30 6 0.8524 0.0407 0 P5Y 30 8750 20374 30 700 1679 66667 9.75 80000 7.5 5333 9.75 80000 7.5 72000 9.75 72000 9.75 10.39 0.8572 0.0431 0 P5Y 9.75 66667 418194 9.75 5333 39221 23288 6278 87250 15211 39.9 169527 10.28 23288 32.85 81450 12.1 80000 7.5 80000 7.5 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The number of pre-funded warrants outstanding as of December 31, 2025 is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">Description</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number Outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Pre-funded warrants issued in December 2024</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 8%; text-align: right">150,000</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">0.01</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Pre-funded warrants issued in July 2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">354,300</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">0.0001</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Outstanding at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">504,300</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">0.0030</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 150000 0.01 354300 0.0001 504300 0.003 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">A summary of pre-funded warrant activity during the years ended December 31, 2025 and 2024 is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Number of Pre-Funded Warrants</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding at January 1, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-804">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-805">-</div></td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 78%; text-align: left; padding-bottom: 1.5pt">Pre-funded warrants issued</td> <td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; width: 8%; text-align: right">150,000</td> <td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td> <td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="width: 1%; padding-bottom: 1.5pt; text-align: left">$</td> <td style="width: 8%; padding-bottom: 1.5pt; text-align: right">0.01</td> <td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding at December 31, 2024</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">150,000</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">0.01</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Pre-funded warrants issued</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">354,300</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td> <td style="padding-bottom: 1.5pt; text-align: right">0.0001</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Outstanding at December 31, 2025</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td> <td style="border-bottom: Black 4pt double; text-align: right">504,300</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left">$</td> <td style="padding-bottom: 2.5pt; text-align: right">0.0030</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 150000 0.01 150000 0.01 354300 0.0001 504300 0.003 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 17 - <span style="text-decoration:underline">STATUTORY RESERVE AND RESTRICTED NET ASSETS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s PRC subsidiary, Avalon Shanghai, is restricted in its ability to transfer a portion of its net asset to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends. The Company did not make any appropriation to statutory reserve for Avalon Shanghai during the years ended December 31, 2025 and 2024 as it incurred net loss in the periods. As of both December 31, 2025 and 2024, the restricted amount as determined pursuant to PRC statutory laws totaled $6,578.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Relevant PRC laws and regulations restrict the Company’s PRC subsidiary, Avalon Shanghai, from transferring a portion of its net assets, equivalent to its statutory reserve and its share capital, to the Company’s shareholders in the form of loans, advances or cash dividends. Only PRC entity’s accumulated profit may be distributed as dividend to the Company’s shareholders without the consent of a third party. As of both December 31, 2025 and 2024, total restricted net assets amounted to $1,206,578.</p> 0.10 0.50 6578 6578 6578 1206578 1206578 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 18 – <span style="text-decoration:underline">NONCONTROLLING INTEREST</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, Dr. Yu Zhou, former director and former co-chief executive officer of Genexosome, who owns 40% of the equity interests of Genexosome, which is not under the Company’s control. During the years ended December 31, 2025 and 2024, the Company did not allocate any net loss to the noncontrolling interest holder due to its inability to satisfy these deficits.</p> 0.40 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 19 – <span style="text-decoration:underline">CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the requirements of Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiary exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of consolidated subsidiary shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiary (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiary in the form of loans, advances or cash dividends without the consent of a third party.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company performed a test on the restricted net assets of consolidated subsidiary in accordance with such requirement and concluded that it was not applicable to the Company as the restricted net assets of the Company’s PRC subsidiary did not exceed 25% of the consolidated net assets of the Company, therefore, the condensed financial statements for the parent company have not been required.</p> 0.25 0.25 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 20 - <span style="text-decoration:underline">CONCENTRATIONS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Suppliers</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No supplier accounted for 10% or more of the Company’s purchase during the years ended December 31, 2025 and 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 21 – <span style="text-decoration:underline">SEGMENT INFORMATION</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the businesses internally.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 12, 2025, the Company purchased 100% of RPM. During the year ended December 31, 2025, the management reporting structure was composed of two strategic business units, mainly organized by services, led by the Company’s <span style="-sec-ix-hidden: hidden-fact-818">Chief Executive Officer</span>, who is its CODM. Using the accounting guidance on segment reporting, the Company determined that its two operating segments were aligned with its two reportable segments corresponding to its strategic business units.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2024, the management reporting structure was composed of one strategic business unit, mainly organized by services, led by the Company’s Chief Executive Officer, who is its CODM. Using the accounting guidance on segment reporting, the Company determined that its one operating segment was aligned with its one reportable segment corresponding to its strategic business unit.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On 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 our investment and on February 26, 2025, the Company and Lab Services MSO entered into a Redemption and Abandonment Agreement, whereby Lab Services MSO redeemed the 40% equity interest in Lab Services MSO held by the Company. Beginning in February 2025, the Company no longer offers laboratory services. During the year ended December 31, 2025, the Company operated in two reportable business segments: (1) the AI generated polishing segment (which commenced on December 12, 2025), and (2) laboratory testing services segment (which ended on February 26, 2025) since Lab Services MSO’s operating results were regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. During the year ended December 31, 2024, the Company operated in one reportable business segment: laboratory testing services segment since Lab Services MSO’s operating results were regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. The Company regularly reviewed the operating results and performance of Lab Services MSO, which was the Company’s equity method investee.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accounting policies for the segments are the same as those described in Note 3. Our reportable segments are aligned principally around the differences in services. Income from equity method investment – Lab Services MSO is calculated by subtracting amortization of intangible assets acquired from acquisition from the Company’s share of Lab Services MSO’s net income; and AI generated publishing income is calculated by subtracting AI generated publishing cost of revenue and AI generated publishing operating expenses from AI generated publishing revenue. The assets and certain expenses related to corporate activities are not allocated to the segments. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Discontinued operations are not included in the applicable reportable segments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Information with respect to these reportable business segments for the years ended December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; text-align: center">Year Ended December 31, 2025</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Lab</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">AI</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Services</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Generated</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Corporate /</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">MSO</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Polishing</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Income from equity method investment - Lab Services MSO</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">392,677</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-806">-</div></td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-807">-</div></td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">392,677</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other operating expenses</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-808">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(94,553</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(7,889,483</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(7,984,036</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other (expense) income:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Interest expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-809">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-810">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,456,694</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,456,694</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Loss on extinguishment of debt</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-811">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-812">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(9,076,587</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(9,076,587</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Other income</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-813">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">100</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">605,667</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">605,767</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net income (loss)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">392,677</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(94,453</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(17,817,097</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(17,518,873</td> <td style="text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="10" style="border-bottom: Black 1.5pt solid; text-align: center">Year Ended December 31, 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Lab</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Services</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Corporate /</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">MSO</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 67%; text-align: left">Loss from equity method investment - Lab Services MSO</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(846,588</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-814">-</div></td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(846,588</td> <td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other operating expenses</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-815">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(3,994,662</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(3,994,662</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other expense:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Interest expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-816">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,659,745</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,659,745</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Other expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-817">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(538,609</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(538,609</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Net loss</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(846,588</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(6,193,016</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(7,039,604</td> <td style="text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap">Identifiable long-lived tangible assets at December 31, 2025 and 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Corporate/Other</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">727</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,298</td> <td style="width: 1%; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap">Identifiable long-lived tangible assets at December 31, 2025 and 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">China</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">727</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,298</td> <td style="width: 1%; text-align: left"> </td></tr> </table> 1 During the year ended December 31, 2025, the management reporting structure was composed of two strategic business units, mainly organized by services, led by the Company’s Chief Executive Officer, who is its CODM. Using the accounting guidance on segment reporting, the Company determined that its two operating segments were aligned with its two reportable segments corresponding to its strategic business units. 2 2 1 1 0.40 0.40 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Information with respect to these reportable business segments for the years ended December 31, 2025 and 2024 was as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; text-align: center">Year Ended December 31, 2025</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Lab</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">AI</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Services</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Generated</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Corporate /</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">MSO</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Polishing</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Income from equity method investment - Lab Services MSO</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">392,677</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-806">-</div></td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-807">-</div></td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">392,677</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other operating expenses</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-808">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(94,553</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(7,889,483</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(7,984,036</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other (expense) income:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Interest expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-809">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-810">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,456,694</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,456,694</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Loss on extinguishment of debt</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-811">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-812">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(9,076,587</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(9,076,587</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Other income</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-813">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">100</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">605,667</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">605,767</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net income (loss)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">392,677</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(94,453</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(17,817,097</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(17,518,873</td> <td style="text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="10" style="border-bottom: Black 1.5pt solid; text-align: center">Year Ended December 31, 2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Lab</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Services</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Corporate /</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">MSO</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 67%; text-align: left">Loss from equity method investment - Lab Services MSO</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(846,588</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-814">-</div></td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(846,588</td> <td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other operating expenses</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-815">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(3,994,662</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(3,994,662</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other expense:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left">Interest expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-816">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,659,745</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(1,659,745</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left">Other expense</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-817">-</div></td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(538,609</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(538,609</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Net loss</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(846,588</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(6,193,016</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">(7,039,604</td> <td style="text-align: left">)</td></tr> </table> 392677 392677 94553 7889483 7984036 1456694 1456694 -9076587 -9076587 100 605667 605767 392677 -94453 -17817097 -17518873 -846588 -846588 3994662 3994662 1659745 1659745 -538609 -538609 -846588 -6193016 -7039604 <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap">Identifiable long-lived tangible assets at December 31, 2025 and 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">Corporate/Other</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">727</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,298</td> <td style="width: 1%; text-align: left"> </td></tr> </table> 727 1298 <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap">Identifiable long-lived tangible assets at December 31, 2025 and 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2025</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center">December 31, <br/> 2024</td> <td style="white-space: nowrap; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%">China</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">727</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">1,298</td> <td style="width: 1%; text-align: left"> </td></tr> </table> 727 1298 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 22 – <span style="text-decoration:underline">COMMITMENTS AND CONTINGENCIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Litigation</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">From time to time, the Company is subject to ordinary routine litigation incidental to its normal business operations. The Company is not currently a party to, and its property is not subject to, any material legal proceedings, except as set forth below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 28, 2019, Research Institute at Nationwide Children’s Hospital (“Research Institute”) filed a Complaint in the United States District Court for the Southern District of Ohio Eastern Division against Dr. Zhou, Li Chen, the Company and Genexosome with various claims against the Company and Genexosome including misappropriation of trade secrets in violation of the Defend Trade Secrets Act of 2016 and violation of Ohio Uniform Trade Secrets Act. The Company, Genexosome and the Research Institute entered into a Settlement Agreement dated June 7, 2022 (the “Settlement Date”) whereby the Company agreed to pay the Research Institute $450,000 on each of the sixty-day, one year and two-year anniversaries of the Settlement Date. In addition, the Company agreed to pay the Research Institute 30% of the Company’s initial pre-tax profit of $3,333,333, 20% of the Company’s second pre-tax profit of $3,333,333 and 10% of the Company’s third pre-tax profit of $3,333,333. The parties provided a mutual release as well. As of December 31, 2025 and 2024, the accrued litigation settlement amounted to $363,450 and $373,450, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Operating Leases Commitment</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is a party to leases for office space. These lease agreements expire through December 2026. Rent expense under all operating leases amounted to approximately $97,000 and $127,000 for the years ended December 31, 2025 and 2024, respectively. Supplemental cash flow information related to leases for the years ended December 31, 2025 and 2024 is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Cash paid for amounts included in the measurement of lease liabilities:</td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left; padding-left: 5.4pt">Operating cash flows paid for operating lease</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">81,650</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">125,076</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Right-of-use assets obtained in exchange for lease obligation:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 5.4pt">Operating lease</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">127,486</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-819">-</div></td> <td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The following table summarizes the maturity of lease liabilities under operating lease as of December 31, 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">For the Year Ending December 31:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Operating Lease</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">2026</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">6,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2027 and thereafter</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-820">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total lease payments</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">6,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Amount of lease payments representing interest</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-821">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total present value of operating lease liabilities</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">6,000</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 450000 0.30 3333333 0.20 3333333 0.10 3333333 363450 373450 97000 127000 Supplemental cash flow information related to leases for the years ended December 31, 2025 and 2024 is as follows:<table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">Years Ended December 31,</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2025</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2024</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Cash paid for amounts included in the measurement of lease liabilities:</td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left; padding-left: 5.4pt">Operating cash flows paid for operating lease</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">81,650</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">125,076</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Right-of-use assets obtained in exchange for lease obligation:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 5.4pt">Operating lease</td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right">127,486</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left">$</td> <td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-819">-</div></td> <td style="text-align: left"> </td></tr> </table> 81650 125076 127486 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The following table summarizes the maturity of lease liabilities under operating lease as of December 31, 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">For the Year Ending December 31:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Operating Lease</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 89%; text-align: left">2026</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">6,000</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2027 and thereafter</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-820">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total lease payments</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">6,000</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Amount of lease payments representing interest</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-821">-</div></td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total present value of operating lease liabilities</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">6,000</td> <td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 6000 6000 6000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 23 – <span style="text-decoration:underline">SUBSEQUENT EVENTS</span> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares Issued for Debt Conversion</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the period from January 1, 2026 through March 17, 2026, an investor converted its convertible note in the principal amount of $545,949 and unpaid interest of $5,525 into 551,474 shares of common stock of the Company at a per share price of $1.00.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares Issued for Pre-Funded Warrants Exercise</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2026, the Company issued an aggregate of 354,257 shares of its common stock upon cashless exercise of pre-funded warrants.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares Issued for Services</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the period from January 1, 2026 through March 17, 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Shares Issued for Warrant Exercise</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Securities Purchase Agreements</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On February 11, 2026, the Company entered into a securities purchase agreement with an accredited investor pursuant to which the Company issued to the investor a promissory note in the principal amount of $233,910, (inclusive of a $26,910 original issuance discount) for gross proceeds of $207,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 19, 2026, the Company entered into a securities purchase agreement with an accredited investor pursuant to which the Company issued to the investor a promissory note in the principal amount of $233,910 (inclusive of a $26,910 original issuance discount) for gross proceeds of $207,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 26, 2026, the Company entered into securities purchase agreements with certain institutional investors for the issuance and sale in a private placement of (i) 490,197 shares of the Company’s common stock at a purchase price of $0.51 per share; (ii) 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 the Company’s common stock; (iii) Series A-1 warrants to purchase up to 6,372,550 shares of the Company’s common stock; and (iv) Series A-2 warrants to purchase up to 6,372,550 shares of the Company’s common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>Amendment to Unsecured Bridge Note</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 15, 2026, the Company entered into Amendment #2 (the “Note Amendment”) to unsecured bridge note dated December 11, 2025 in the original principal amount of $375,000. 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Amended and Restated Membership Interest Purchase Agreement</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As previously reported, on November 17, 2023, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with Wenzhao Lu, the Chairman of the Company’s Board of Directors, pursuant to which (i) Mr. Lu acquired from the Company 30% of the total outstanding membership interests of Avalon RT 9 for a cash purchase price of $3 million (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 million.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 18, 2026, the Company and Mr. Lu 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 (i) approximately $3.1 million, and (ii) the satisfaction, in full, of an approximately $5.9 million balance due on an existing mortgage financing. This represents a total amended aggregated purchase price of approximately $9 million.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Directors Resignation and Appointment</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On February 24, 2026, each of William B. Stilley, III, Wilbert J. Tauzin II and Tevi Troy informed the Company that they will be resigning from the Company’s Board of Directors (the “Board”) as well as the Company’s Board committees on which they respectively served effective as of February 24, 2026. Messrs. Stilley’s, Tauzin’s and Troy’s resignations were not the result of any disagreement with the Company, any matter related to the Company’s operations, policies or practices, the Company’s management or the Board.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On February 24, 2026, the Board appointed (i) Lourdes Felix as a member and Chair of the audit committee and member of the compensation committee; (ii) Michael Mathews as a member of the audit committee, the compensation committee and the nominating and corporate governance committee and Chair of the nominating and corporate governance committee; and (ii) Steven Sanders as lead independent director and Chair of the compensation committee. All of the foregoing appointments are effective as of February 24, 2026.</p> 545949 5525 551474 1 354257 505000 522800 1268672 233910 26910 207000 233910 26910 207000 490197 0.51 0.5099 5882353 6372550 6372550 375000 0.30 3000000 0.70 7000000 1 3100000 5900000 9 39221 109091 187000 748000 273493 282170 356616 499714 1495877 135055 11999 727 1265616 2158167 12808197 12808197 6937769 14220867 21904860 14720581 23400737 1472034 1832606 153772 153772 875638 1072553 363450 363450 171836 281063 100000 100000 89831 6000 3158078 27790 34156 150000 150000 197341 737018 1188700 6061077 4593051 14147114 56224 23515 56224 23515 4649275 14170629 0.0001 0.0001 10000000 10000000 2550 2550 3800 3800 2.55 2540000 3790000 0 0 8837527 19396 19396 19500 19500 19.396 14813253 14916753 0.0001 0.0001 100000000 100000000 13680790 13680790 13677323 13677323 1368 486 106067244 88376767 3467 3467 522500 522500 -112592608 -105934101 6578 6578 -242029 -241402 10071306 9230108 10071306 9230108 14720581 23400737 392677 105271 322552 315117 393702 795577 1428611 2377528 3060826 434725 292629 658141 601651 563000 1126000 1650000 1650000 153306 214724 296219 380437 2051879 3908516 4773005 6086616 -2051879 -3908516 -4773005 -5693939 65324 780602 254741 1064357 177763 82755 259792 164711 -1652 -561176 1275237 -446816 -9076587 -9076587 114502 2673 7283 1487 -126933 -9376095 -1782487 -9857352 -2178812 -13284611 -6555492 -15551291 -2178812 -13284611 -6555492 -15551291 -173987 -103015 -389418 -2178812 -13458598 -6658507 -15940709 -2178812 -13458598 -6658507 -15940709 162473 -2178812 -13458598 -6658507 -15778236 -0.14 -0.14 -6.14 -6.14 -0.53 -0.53 -8.12 -8.12 0 0 -0.08 -0.08 -0.01 -0.01 -0.21 -0.21 -0.14 -0.14 -6.22 -6.22 -0.54 -0.54 -8.33 -8.33 15792440 15792440 2162323 2162323 12397080 12397080 1894961 1894961 -2178812 -13458598 -6658507 -15940709 316 -104 627 -383 -2179128 -13458494 -6659134 -15940326 -2179128 -13458494 -6659134 -15940326 3800 3790000 5000 8837527 19500 14916753 4857476 486 88376767 -3467 -522500 -105934101 6578 -241402 9230108 354257 35 -35 1268672 127 -127 -723 -723000 300000 30 722970 551474 55 551419 551474 1281603 1281603 505000 50 522750 522800 490197 49 2756763 2756812 1861266 1861266 -311 -311 -4479695 -4479695 3077 3067000 5000 8837527 19500 14916753 8327076 832 96073376 -3467 -522500 -110413796 6578 -241713 11724057 2541353 254 254 -527 -527000 218672 22 526978 -5000 -8837527 2074689 208 8837319 -104 -103500 69000 7 103493 100000 10 137990 138000 200000 20 58180 58200 150000 15 60660 60675 269248 269248 -316 -316 -2178812 -2178812 2550 2540000 19396 14813253 13680790 1368 106067244 -3467 -522500 -112592608 6578 -242029 10071306 9000 9000000 11000 11000000 3500 3500000 1445979 145 72023525 -3467 -522500 -87673125 6578 -232000 7102623 186877 19 -19 22278 2 111230 111232 18853 18853 -9000 -9000000 5000 8837527 162473 -11000 -11000000 2348695 -8651305 9159 9159 279 279 -2482111 -2482111 3500 3500000 5000 8837527 1655134 166 74673916 -3467 -522500 -90155236 6578 -231721 -3891270 242304 24 -24 170000 17 746183 746200 157676 157676 -28085 -28085 285113 28 285085 285113 9076587 9076587 104 104 -13458598 -13458598 3500 3500000 5000 8837527 2352551 235 84911338 -3467 -522500 -103613834 6578 -231617 -7112273 -6555492 -15551291 1126905 302 1650000 34688 33628 703372 761698 392677 254741 1064357 1275237 -446816 -9076587 17332 -41612 264109 -407430 1295813 -29688 -33628 -3556055 -2788804 561000 95000 12158 233449 315393 95000 375000 200000 1564000 44000 341250 150000 149972 22336 254 3249412 492600 3360816 277636 -231956 -173555 -231956 -173555 41932 409 -69870 -2589314 109091 2658182 39221 68868 256175 493711 32445 34423 96600 42385 20306 1745000 632916 11000000 9000000 294001 1281603 176529 127 43 35 169743 127486 551474 285113 1250000 8837527 103500 1861266 62316 58200 138000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 1 – <span style="text-decoration:underline">ORGANIZATION AND NATURE OF OPERATIONS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Change 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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, 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On May 1, 2024, the Company formed a wholly owned subsidiary, Q&amp;A Distribution LLC (“Q&amp;A Distribution”), a Texas company. Q&amp;A Distribution is engaged in distribution of KetoAir device.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On 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 June 30, 2026.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On December 5, 2025, the Company formed a wholly owned subsidiary, Avalon Quantum AI, LLC (“Avalon Quantum AI”), a Nevada company.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On December 12, 2025, the Company acquired RPM Interactive, Inc., a Nevada corporation (“RPM”), in accordance with the terms 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”).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">As 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details of the Company’s subsidiaries which are included in these condensed consolidated financial statements as of June 30, 2026 are as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: bottom; width: 25%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name of Subsidiary</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Place and Date of<br/> Incorporation</span></td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; vertical-align: bottom; width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Percentage of <br/> Ownership</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 36%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Principal Activities</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon Healthcare System, Inc. (“AHS”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delaware <br/> May 18, 2015</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by<br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holding company for payroll and other expenses</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC<br/> April 29, 2016</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> AHS</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not considered an operating entity</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Genexosome Technologies Inc. (“Genexosome”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevada <br/> July 31, 2017</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">60% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No current activities to report; dormant</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon Laboratory Services, Inc. (“Avalon Lab”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delaware <br/> October 14, 2022</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No current activities to report; dormant</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q&amp;A Distribution LLC (“Q&amp;A Distribution”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Texas<br/> May 1, 2024</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distributes KetoAir device</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nexus MergerSub Limited (“Nexus”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">BVI <br/> February 21, 2025</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No current activities to report</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon Quantum AI, LLC (“Avalon Quantum AI”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevada <br/> December 5, 2025</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advanced Agentic AI systems, including automated video generation</span></td></tr> </table> 2014-07-28 1 1 0.40 0.40 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details of the Company’s subsidiaries which are included in these condensed consolidated financial statements as of June 30, 2026 are as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: bottom; width: 25%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name of Subsidiary</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Place and Date of<br/> Incorporation</span></td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; vertical-align: bottom; width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Percentage of <br/> Ownership</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt; vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 36%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Principal Activities</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon Healthcare System, Inc. (“AHS”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delaware <br/> May 18, 2015</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by<br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holding company for payroll and other expenses</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon (Shanghai) Healthcare Technology Co., Ltd. (“Avalon Shanghai”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC<br/> April 29, 2016</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> AHS</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not considered an operating entity</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Genexosome Technologies Inc. (“Genexosome”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevada <br/> July 31, 2017</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">60% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No current activities to report; dormant</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon Laboratory Services, Inc. (“Avalon Lab”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delaware <br/> October 14, 2022</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No current activities to report; dormant</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q&amp;A Distribution LLC (“Q&amp;A Distribution”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Texas<br/> May 1, 2024</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distributes KetoAir device</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="-keep: true"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nexus MergerSub Limited (“Nexus”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">BVI <br/> February 21, 2025</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No current activities to report</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Avalon Quantum AI, LLC (“Avalon Quantum AI”)</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevada <br/> December 5, 2025</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% held by <br/> ALBT</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advanced Agentic AI systems, including automated video generation</span></td></tr> </table> Delaware May 18, 2015 1 Holding company for payroll and other expenses PRC April 29, 2016 1 Not considered an operating entity Nevada July 31, 2017 0.60 No current activities to report; dormant Delaware October 14, 2022 1 No current activities to report; dormant Texas May 1, 2024 1 Distributes KetoAir device BVI February 21, 2025 1 No current activities to report Nevada December 5, 2025 1 Advanced Agentic AI systems, including automated video generation <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b>NOTE 2 – <span style="text-decoration:underline">BASIS OF PRESENTATION AND GOING CONCERN CONDITION</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis of Presentation</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. GAAP”). 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain 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 30, 2026.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain 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. The notes to the Condensed Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. Refer to Note 5 Discontinued Operations and Disposals for additional information on the Company’s discontinued operations.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Going Concern</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 marketing automation, 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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> 4093000 -6555000 -3556000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 3 – <span style="text-decoration:underline">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Use of Estimates</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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 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. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Significant 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash and Cash Equivalents</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2026 and December 31, 2025, the Company’s cash balances by geographic area were as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid"><span style="-keep: true">Country:</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">June 30, 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">December 31, 2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">United States</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">39,145</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">99.8</span></td><td style="width: 1%; text-align: left"><span style="-keep: true">%</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">108,599</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">99.5</span></td><td style="width: 1%; text-align: left"><span style="-keep: true">%</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">China</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">76</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">0.2</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">%</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">492</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">0.5</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">%</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total cash</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">39,221</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">100.0</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">%</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">109,091</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">100.0</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">%</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 <span style="-sec-ix-hidden: hidden-fact-829"><span style="-sec-ix-hidden: hidden-fact-830">no</span></span> cash equivalents at June 30, 2026 and December 31, 2025.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value of Financial Instruments and Fair Value Measurements</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b><i>Assets and liabilities measured at fair value on a recurring basis. </i></b>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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><i>Derivative liability. </i>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:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Significant<br/> Unobservable<br/> Inputs<br/> (Level 3)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%"><span style="-keep: true">Balance of derivative liability as of January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">34,156</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Loss from change in the fair value of derivative liability</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,275,237</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Reclassification of additional paid-in capital upon conversion</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,281,603</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Balance of derivative liability as of June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">27,790</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">ASC 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 instruments.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Credit Risk and Uncertainties</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The Company maintains a portion of its cash on deposits with bank and financial institution within the U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The Company has not experienced 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 <span style="-sec-ix-hidden: hidden-fact-831">no</span> balances in excess of the federally-insured limits.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Sale of Subsidiary</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. Mr. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Software and Platform</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company capitalizes costs to develop or purchase software and platform in accordance with ASC section 350-40, Intangibles — Goodwill and Other. Costs incurred to develop software and platform are expensed as incurred during the preliminary project stage. Software and 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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Stock Subscription Liability</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. 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 are issued.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Per Share Data</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Basic 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Three Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Six Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">Options to purchase common stock</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">44,501</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">44,501</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Warrants to purchase common stock</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">95,746</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">95,746</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Series C convertible preferred stock (*)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,058,091</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,452,282</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,058,091</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,452,282</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Series D convertible preferred stock (**)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-822"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,074,689</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-823"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,074,689</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Series E convertible preferred stock (***)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12,931,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-824"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12,931,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-825"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Convertible notes and related accrued interest (****)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-826"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">2,436,375</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-827"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">2,638,734</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Potentially dilutive securities</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">29,381,275</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,103,593</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">29,381,275</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,305,952</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(**)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(***)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(****)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Commitments and Contingencies</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Segment Reporting</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The Company’s <span style="-sec-ix-hidden: hidden-fact-828">Chief Executive Officer</span> 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. </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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, pursuant to which the Company sold to Mr. Lu 100% of the membership interests of Avalon RT 9. The Company determined that the assets and operations 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recent Accounting Standards</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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 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. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">In 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Use of Estimates</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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 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. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Significant 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash and Cash Equivalents</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2026 and December 31, 2025, the Company’s cash balances by geographic area were as follows:</span></p><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid"><span style="-keep: true">Country:</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">June 30, 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">December 31, 2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">United States</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">39,145</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">99.8</span></td><td style="width: 1%; text-align: left"><span style="-keep: true">%</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">108,599</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">99.5</span></td><td style="width: 1%; text-align: left"><span style="-keep: true">%</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">China</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">76</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">0.2</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">%</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">492</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">0.5</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">%</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total cash</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">39,221</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">100.0</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">%</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">109,091</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">100.0</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">%</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 <span style="-sec-ix-hidden: hidden-fact-829"><span style="-sec-ix-hidden: hidden-fact-830">no</span></span> cash equivalents at June 30, 2026 and December 31, 2025.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2026 and December 31, 2025, the Company’s cash balances by geographic area were as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid"><span style="-keep: true">Country:</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">June 30, 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">December 31, 2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">United States</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">39,145</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">99.8</span></td><td style="width: 1%; text-align: left"><span style="-keep: true">%</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">108,599</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">99.5</span></td><td style="width: 1%; text-align: left"><span style="-keep: true">%</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">China</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">76</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">0.2</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">%</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">492</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">0.5</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">%</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total cash</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">39,221</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">100.0</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">%</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">109,091</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">100.0</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">%</span></td></tr> </table> 39145 0.998 108599 0.995 76 0.002 492 0.005 39221 1 109091 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value of Financial Instruments and Fair Value Measurements</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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:</span></p><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.</span></td></tr></table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td></tr></table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white; border-spacing: 0px;"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b><i>Assets and liabilities measured at fair value on a recurring basis. </i></b>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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><i>Derivative liability. </i>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:</span></p><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Significant<br/> Unobservable<br/> Inputs<br/> (Level 3)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%"><span style="-keep: true">Balance of derivative liability as of January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">34,156</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Loss from change in the fair value of derivative liability</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,275,237</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Reclassification of additional paid-in capital upon conversion</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,281,603</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Balance of derivative liability as of June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">27,790</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.</span></p> The table below reflects the activity of derivative liability measured at fair value for the six months ended June 30, 2026:<table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Significant<br/> Unobservable<br/> Inputs<br/> (Level 3)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%"><span style="-keep: true">Balance of derivative liability as of January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">34,156</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Loss from change in the fair value of derivative liability</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,275,237</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Reclassification of additional paid-in capital upon conversion</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,281,603</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Balance of derivative liability as of June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">27,790</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 34156 -1275237 -1281603 27790 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Credit Risk and Uncertainties</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The Company maintains a portion of its cash on deposits with bank and financial institution within the U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The Company has not experienced 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 <span style="-sec-ix-hidden: hidden-fact-831">no</span> balances in excess of the federally-insured limits.</span></p> 250000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Sale of Subsidiary</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. Mr. 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.</span></p> 9000000 1861266 9000000 3158078 5800000 41922 7138734 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Software and Platform</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company capitalizes costs to develop or purchase software and platform in accordance with ASC section 350-40, Intangibles — Goodwill and Other. Costs incurred to develop software and platform are expensed as incurred during the preliminary project stage. Software and 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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Stock Subscription Liability</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. 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 are issued.</span></p> 141643 3.53 150000 150000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Per Share Data</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Basic 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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:</span></p><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Three Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Six Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">Options to purchase common stock</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">44,501</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">44,501</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Warrants to purchase common stock</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">95,746</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">95,746</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Series C convertible preferred stock (*)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,058,091</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,452,282</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,058,091</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,452,282</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Series D convertible preferred stock (**)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-822"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,074,689</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-823"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,074,689</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Series E convertible preferred stock (***)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12,931,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-824"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12,931,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-825"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Convertible notes and related accrued interest (****)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-826"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">2,436,375</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-827"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">2,638,734</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Potentially dilutive securities</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">29,381,275</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,103,593</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">29,381,275</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,305,952</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(**)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(***)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table><table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(****)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> 162473 3491000 150000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Three Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Six Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">Options to purchase common stock</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">44,501</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">44,501</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Warrants to purchase common stock</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">95,746</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">95,746</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Series C convertible preferred stock (*)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,058,091</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,452,282</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,058,091</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,452,282</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Series D convertible preferred stock (**)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-822"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,074,689</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-823"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,074,689</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Series E convertible preferred stock (***)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12,931,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-824"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12,931,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-825"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Convertible notes and related accrued interest (****)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-826"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">2,436,375</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-827"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">2,638,734</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Potentially dilutive securities</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">29,381,275</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,103,593</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">29,381,275</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,305,952</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(**)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(***)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%; border-spacing: 0px;"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(****)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td> </tr></table> 2189836 44501 2189836 44501 13202348 95746 13202348 95746 1058091 1452282 1058091 1452282 2074689 2074689 12931000 12931000 2436375 2638734 29381275 6103593 29381275 6305952 2.41 2.41 1.5 1 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Commitments and Contingencies</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Segment Reporting</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The Company’s <span style="-sec-ix-hidden: hidden-fact-828">Chief Executive Officer</span> 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. </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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, pursuant to which the Company sold to Mr. Lu 100% of the membership interests of Avalon RT 9. The Company determined that the assets and operations 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.</span></p> 0.40 0.40 The 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. 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recent Accounting Standards</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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 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. 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">In 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 4 – <span style="text-decoration:underline">PREPAID EXPENSE AND OTHER CURRENT ASSETS</span></b></span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2026 and December 31, 2025, prepaid expense and other current assets consisted of the following:</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="-keep: true"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30,<br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31, <br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Prepaid professional fees</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">124,682</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">67,139</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Prepaid directors’ and officers’ liability insurance premium</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">16,323</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">10,932</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Prepaid NASDAQ listing fee</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">28,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-832"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Deferred offering costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-833"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">84,652</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Finished goods</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">71,190</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">74,841</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Recoverable value-added tax</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">11,187</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">10,863</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Others</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">22,111</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">33,743</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Total</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">273,493</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">282,170</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2026 and December 31, 2025, prepaid expense and other current assets consisted of the following:</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="-keep: true"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30,<br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31, <br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Prepaid professional fees</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">124,682</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">67,139</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Prepaid directors’ and officers’ liability insurance premium</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">16,323</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">10,932</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Prepaid NASDAQ listing fee</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">28,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-832"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Deferred offering costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-833"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">84,652</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Finished goods</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">71,190</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">74,841</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Recoverable value-added tax</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">11,187</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">10,863</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Others</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">22,111</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">33,743</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Total</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">273,493</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">282,170</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 124682 67139 16323 10932 28000 84652 71190 74841 11187 10863 22111 33743 273493 282170 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b>NOTE 5 – <span style="text-decoration:underline">DISCONTINUED OPERATIONS AND DISPOSALS</span></b></span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The subsidiary comprises our real property operations segment. As a result of the planned disposition of the subsidiary, the real property operations segment met the criteria under ASC 205-20 to be classified as discontinued operations. Accordingly, the historical results of operations of the real property operations segment have been reflected as discontinued operations in our condensed consolidated financial statement for all periods prior to the Amended MIPA on February 18, 2026.</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="-keep: true">The table below outlines the gain on sale described above.</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="-keep: true"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="font-weight: bold"><span style="-keep: true">Carrying amount of assets and liabilities:</span></td><td><span style="-keep: true"> </span></td> <td colspan="2"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%"><span style="-keep: true">Cash</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">288,099</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Rent receivable</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">58,735</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Prepaid expense</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">7,331</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Deferred Leasing Costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">32,600</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Property and equipment, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,473</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Investment in real estate, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,904,683</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Accrued liabilities</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">78,154</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Tenants’ security deposit</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">77,033</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left"><span style="-keep: true">Total carrying amount (net)</span></td><td style="font-weight: bold"><span style="-keep: true"> </span></td> <td style="font-weight: bold; text-align: left"><span style="-keep: true"> </span></td><td style="font-weight: bold; text-align: right"><span style="-keep: true">7,138,734</span></td><td style="font-weight: bold; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="font: 8pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 8pt Times New Roman, Times, Serif"><span style="-keep: true"> </span></td><td style="font: 8pt Times New Roman, Times, Serif"><span style="-keep: true"> </span></td> <td style="font: 8pt Times New Roman, Times, Serif; text-align: left"><span style="-keep: true"> </span></td><td style="font: 8pt Times New Roman, Times, Serif; text-align: right"><span style="-keep: true"> </span></td><td style="font: 8pt Times New Roman, Times, Serif; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Consideration from sale of subsidiary</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">9,000,000</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 4pt"><span style="-keep: true">Gain on sale of subsidiary</span></td><td style="padding-bottom: 4pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,861,266</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="-keep: true"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true">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.</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details of the net loss from discontinued operations were as follows:</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Three Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Six Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">REAL PROPERTY RENTAL REVENUE</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">253,839</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">350,406</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">253,839</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">700,206</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">REAL PROPERTY OPERATING EXPENSES</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(153,903</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(251,077</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(153,903</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(531,467</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">REAL PROPERTY OPERATING INCOME</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">99,936</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">99,329</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">99,936</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">168,739</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">OTHER OPERATING EXPENSES:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Professional fees</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">45,617</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">47,402</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">45,617</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">106,766</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Compensation and related benefits</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">20,932</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">31,398</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">20,932</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">62,796</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Other Operating Expenses</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">66,549</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">78,800</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">66,549</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">169,562</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">INCOME (LOSS) FROM OPERATIONS</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">33,387</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">20,529</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">33,387</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(823</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">OTHER (EXPENSE) INCOME</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Interest expense - amortization of debt discount and debt issuance costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-849"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(29,807</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-850"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(59,614</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Interest expense - other</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(136,402</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(164,500</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(136,402</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(329,000</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Other (expense) income</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-851"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(209</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-852"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">19</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Other Expense, net</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(136,402</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(194,516</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(136,402</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(388,595</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">LOSS BEFORE INCOME TAXES</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(103,015</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(173,987</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(103,015</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(389,418</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">INCOME TAXES</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-853"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-854"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-855"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-856"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">NET LOSS</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(103,015</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(173,987</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(103,015</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(389,418</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the assets and liabilities of the discontinued operations:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31,<br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true">ASSETS</span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in"><span style="-keep: true">CURRENT ASSETS</span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; width: 76%"><span style="-keep: true">Cash</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-834"><span style="-keep: true">-</span></div></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">258,999</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Rent receivable</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-835"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">84,898</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Prepaid expense and other current assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-836"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">12,719</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Current Assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-837"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">356,616</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">NON-CURRENT ASSETS:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Property and equipment, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-838"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">3,478</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Investment in real estate, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-839"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,925,768</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Deferred leasing costs and other non-current assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-840"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">8,523</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Non-current Assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-841"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">6,937,769</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total Assets</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-842"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">7,294,385</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">LIABILITIES</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">CURRENT LIABILITIES:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Accrued liabilities and other payables</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-843"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">261,077</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Note payable, net</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-844"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">5,800,000</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Current Liabilities</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-845"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">6,061,077</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">NON-CURRENT LIABILITIES:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Deferred rental income</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-846"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">23,515</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Non-current Liabilities</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-847"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">23,515</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total Liabilities</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-848"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,084,592</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The above tables exclude intercompany payables that are eliminated within our condensed consolidated balance sheets.</span></p> 1 9000000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="-keep: true">The table below outlines the gain on sale described above.</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="-keep: true"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="font-weight: bold"><span style="-keep: true">Carrying amount of assets and liabilities:</span></td><td><span style="-keep: true"> </span></td> <td colspan="2"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%"><span style="-keep: true">Cash</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">288,099</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Rent receivable</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">58,735</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Prepaid expense</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">7,331</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Deferred Leasing Costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">32,600</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Property and equipment, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,473</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Investment in real estate, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,904,683</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Accrued liabilities</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">78,154</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Tenants’ security deposit</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">77,033</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left"><span style="-keep: true">Total carrying amount (net)</span></td><td style="font-weight: bold"><span style="-keep: true"> </span></td> <td style="font-weight: bold; text-align: left"><span style="-keep: true"> </span></td><td style="font-weight: bold; text-align: right"><span style="-keep: true">7,138,734</span></td><td style="font-weight: bold; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="font: 8pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 8pt Times New Roman, Times, Serif"><span style="-keep: true"> </span></td><td style="font: 8pt Times New Roman, Times, Serif"><span style="-keep: true"> </span></td> <td style="font: 8pt Times New Roman, Times, Serif; text-align: left"><span style="-keep: true"> </span></td><td style="font: 8pt Times New Roman, Times, Serif; text-align: right"><span style="-keep: true"> </span></td><td style="font: 8pt Times New Roman, Times, Serif; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Consideration from sale of subsidiary</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">9,000,000</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 4pt"><span style="-keep: true">Gain on sale of subsidiary</span></td><td style="padding-bottom: 4pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,861,266</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the assets and liabilities of the discontinued operations:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31,<br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true">ASSETS</span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in"><span style="-keep: true">CURRENT ASSETS</span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td colspan="2" style="text-align: right"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; width: 76%"><span style="-keep: true">Cash</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-834"><span style="-keep: true">-</span></div></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">258,999</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Rent receivable</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-835"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">84,898</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Prepaid expense and other current assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-836"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">12,719</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Current Assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-837"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">356,616</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">NON-CURRENT ASSETS:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Property and equipment, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-838"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">3,478</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Investment in real estate, net</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-839"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,925,768</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Deferred leasing costs and other non-current assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-840"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">8,523</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Non-current Assets</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-841"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">6,937,769</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total Assets</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-842"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">7,294,385</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">LIABILITIES</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">CURRENT LIABILITIES:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left"><span style="-keep: true">Accrued liabilities and other payables</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-843"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">261,077</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Note payable, net</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-844"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">5,800,000</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Current Liabilities</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-845"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">6,061,077</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">NON-CURRENT LIABILITIES:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Deferred rental income</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-846"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">23,515</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Non-current Liabilities</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-847"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">23,515</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total Liabilities</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-848"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">6,084,592</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 288099 58735 7331 32600 2473 6904683 78154 77033 7138734 9000000 1861266 1861266 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details of the net loss from discontinued operations were as follows:</span></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Three Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Six Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><span style="-keep: true">REAL PROPERTY RENTAL REVENUE</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">253,839</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">350,406</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">253,839</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">700,206</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">REAL PROPERTY OPERATING EXPENSES</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(153,903</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(251,077</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(153,903</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(531,467</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">REAL PROPERTY OPERATING INCOME</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">99,936</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">99,329</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">99,936</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">168,739</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">OTHER OPERATING EXPENSES:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Professional fees</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">45,617</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">47,402</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">45,617</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">106,766</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Compensation and related benefits</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">20,932</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">31,398</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">20,932</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">62,796</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Other Operating Expenses</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">66,549</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">78,800</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">66,549</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">169,562</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">INCOME (LOSS) FROM OPERATIONS</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">33,387</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">20,529</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">33,387</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(823</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">OTHER (EXPENSE) INCOME</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Interest expense - amortization of debt discount and debt issuance costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-849"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(29,807</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-850"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(59,614</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Interest expense - other</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(136,402</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(164,500</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(136,402</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(329,000</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Other (expense) income</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-851"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(209</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-852"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">19</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total Other Expense, net</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(136,402</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(194,516</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(136,402</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(388,595</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">LOSS BEFORE INCOME TAXES</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(103,015</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(173,987</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(103,015</span></td><td style="text-align: left"><span style="-keep: true">)</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(389,418</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">INCOME TAXES</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-853"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-854"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-855"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-856"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">NET LOSS</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(103,015</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(173,987</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(103,015</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">(389,418</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> </table> 253839 350406 253839 700206 153903 251077 153903 531467 99936 99329 99936 168739 45617 47402 45617 106766 20932 31398 20932 62796 66549 78800 66549 169562 33387 20529 33387 -823 29807 59614 136402 164500 136402 329000 -209 19 136402 194516 136402 388595 -103015 -173987 -103015 -389418 -103015 -173987 -103015 -389418 258999 84898 12719 356616 3478 6925768 8523 6937769 7294385 261077 5800000 6061077 23515 23515 6084592 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 6 – <span style="text-decoration:underline">INTANGIBLE ASSETS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 to goodwill. Goodwill is not amortized, but is tested for impairment at June 30, 2026. On 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2026 and December 31, 2025, intangible assets consisted of the following:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Useful Life</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31,<br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 66%; text-align: left"><span style="-keep: true">Developed technology</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 9%; text-align: center"><span style="-keep: true">1 Year</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,230,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,230,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Trade name</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: center"><span style="-keep: true">1 Year</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">22,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">22,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Software and platform</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: center"><span style="-keep: true">3 Years</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">233,449</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-857"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Goodwill</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">12,808,197</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">12,808,197</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">15,293,646</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">15,060,197</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: accumulated amortization</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,219,833</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(93,833</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">14,073,813</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">14,966,364</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the three months ended June 30, 2026 and 2025, amortization expense amounted to $563,000 and <span style="-sec-ix-hidden: hidden-fact-859">$0</span>, respectively. For the six months ended June 30, 2026 and 2025, amortization expense amounted to $1,126,000 and <span style="-sec-ix-hidden: hidden-fact-860">$0</span>, respectively.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortization of intangible assets, excluding software and platform, which have not yet been placed in service as of June 30, 2026, attributable to future periods is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid"><span style="-keep: true">For the Twelve-month Period Ending June 30:</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Amortization<br/> Amount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">2027</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">1,032,167</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">2028 and thereafter</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-858"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,032,167</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 12808197 12808197 215412 233449 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2026 and December 31, 2025, intangible assets consisted of the following:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Useful Life</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31,<br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 66%; text-align: left"><span style="-keep: true">Developed technology</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 9%; text-align: center"><span style="-keep: true">1 Year</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,230,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,230,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Trade name</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: center"><span style="-keep: true">1 Year</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">22,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">22,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Software and platform</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: center"><span style="-keep: true">3 Years</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">233,449</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-857"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Goodwill</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">12,808,197</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">12,808,197</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">15,293,646</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">15,060,197</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: accumulated amortization</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,219,833</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(93,833</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">14,073,813</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">14,966,364</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> P1Y 2230000 2230000 P1Y 22000 22000 P3Y 233449 12808197 12808197 15293646 15060197 1219833 93833 14073813 14966364 563000 1126000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortization of intangible assets, excluding software and platform, which have not yet been placed in service as of June 30, 2026, attributable to future periods is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid"><span style="-keep: true">For the Twelve-month Period Ending June 30:</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Amortization<br/> Amount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">2027</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">1,032,167</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">2028 and thereafter</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-858"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,032,167</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 1032167 1032167 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b>NOTE 7 – <span style="text-decoration:underline">CONVERTIBLE NOTE PAYABLE</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>June 2024 Convertible Note</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On June 5, 2024, the Company entered into securities purchase agreements with Mast Hill for the issuance of 13.0% senior secured promissory notes in the aggregate principal amount of $2,845,000 (collectively, the “June 2024 Convertible Note”) convertible into shares 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 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).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Mast 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On 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 $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 share. </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In December 2024, the Company repaid June 2024 Convertible Note principal amount of $288,223 in cash.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>July 2025 Convertible Note</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On July 3, 2025, the Company issued two convertible promissory notes (“July 2025 Convertible Note”) to two accredited investors on identical terms. The July 2025 Convertible Note has a principal amount of $200,000, bears a one-time interest charge of $60,000, and matures nine months from the date of issuance.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">As 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">In March 2026, the Company repaid in full the July 2025 Convertible Note.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The convertible notes payable as of June 30, 2026 and December 31, 2025 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31, <br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Principal amount</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-861"><span style="-keep: true">-</span></div></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">745,950</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: unamortized debt discount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-862"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(8,932</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Convertible note payable, net</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-863"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">737,018</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For 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 loss. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For 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 loss. 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.</span></p> 0.13 2845000 26800 146667 11.25 11.25 2845000 2702750 142250 66667 9.75 80000 7.5 26800 150000 150000 0.01 1 288223 2010827 2010827 1 545950 545950 1 200000 60000 1 5000 26800 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The convertible notes payable as of June 30, 2026 and December 31, 2025 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31, <br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Principal amount</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-861"><span style="-keep: true">-</span></div></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">745,950</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: unamortized debt discount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-862"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(8,932</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Convertible note payable, net</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-863"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">737,018</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 745950 8932 737018 0 780602 621353 621353 8932 1064357 621353 621353 0 82755 23192 164711 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 8 – <span style="text-decoration:underline">BRIDGE LOAN PAYABLE, NET</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On December 11, 2025, the Company entered into a securities purchase agreement with Allen O Cage Jr., an individual, pursuant to which the Company issued an unsecured bridge note with a maturity date of April 15, 2026, in the principal sum of $375,000. The bridge note carried an original issue discount of $75,000. Accordingly, on December 11, 2025, Allen paid the purchase price of $300,000 to the Company for the bridge note. This bridge note did not bear interest. The Company was required to make the following payments in cash to Allen under the bridge note: (i) $125,000 on February 15, 2026, (ii) $125,000 on March 15, 2026, and (iii) $125,000 on April 15, 2026. Upon the occurrence 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). </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 was remote and as such the fair value of the embedded conversion feature had been estimated to be zero.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 was amortized over the term of the bridge note.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In March and April 2026, the Company repaid in full the bridge note.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The bridge loan payable as of June 30, 2026 and December 31, 2025 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31, <br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Principal amount</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-864"><span style="-keep: true">-</span></div></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">375,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Less: unamortized debt issuance costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-865"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(14,441</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: unamortized debt discount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-866"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(163,218</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Convertible note payable, net</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-867"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">197,341</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">For 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">For 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.</span></p> 2026-04-15 375000 75000 300000 125000 125000 125000 0.50 P5D 0.80 100000 100000 18846 213000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The bridge loan payable as of June 30, 2026 and December 31, 2025 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">December 31, <br/> 2025</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Principal amount</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-864"><span style="-keep: true">-</span></div></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">375,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Less: unamortized debt issuance costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-865"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(14,441</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: unamortized debt discount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-866"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(163,218</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Convertible note payable, net</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-867"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">197,341</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 375000 14441 163218 197341 9200 177659 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 9 – <span style="text-decoration:underline">NOTE PAYABLE, NET</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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 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. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On March 25, 2026, the Company entered into a Business Loan and Security Agreement (the “Business Loan Agreement”) with Agile Lending LLC, pursuant to which the Company obtained a loan from the investor in the principal amount of $787,500 (the “Business Loan”), with net proceeds to the Company of $750,000, following the payment of an administration fee of $37,500, with a total repayment amount of $1,134,000, including interest charges of $346,500 (assuming all payments are made on time and the Business Loan is not prepaid) repayable in 30 weekly installments of $37,800 with a maturity date of October 22, 2026. Pursuant to the Business Loan Agreement, the Company granted the investor a continuing security interest in certain collateral (as defined in the Business Loan Agreement). In connection with the Business Loan, the Company issued the investor a Confessed Judgement Secured Promissory Note (the “Secured Note”) 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. On 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). The Company 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On 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: (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 Dune Note shall be paid on December 1, 2026.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On 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) $62,500 shall be paid on each of September 1, 2026, October 1, 2026 and November 1, 2026 and (ii) the total remaining balance of the FirstFire Note shall be paid on December 1, 2026.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The note payable as of June 30, 2026 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">Principal amount</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">1,414,070</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Less: unamortized debt issuance costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(29,761</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: unamortized debt discount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(195,609</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Note payable, net</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,188,700</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For 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 $196,100 which have been included in interest expense - other on the accompanying condensed consolidated statements of operations and comprehensive loss.</span></p> 467820 414000 53820 56138 288176 39297 2027-02-15 34000 787500 750000 37500 1134000 346500 37800 2026-10-22 787500 2026-10-22 37800 26250 11550 200000 58200 200000 250000 50000 200000 2026-12-01 0.1875 46875 0.10 62500 62500 62500 250000 50000 200000 2026-12-01 0.1875 46875 0.10 62500 62500 62500 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The note payable as of June 30, 2026 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">June 30, <br/> 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">Principal amount</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">1,414,070</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Less: unamortized debt issuance costs</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">(29,761</span></td><td style="text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Less: unamortized debt discount</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(195,609</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Note payable, net</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,188,700</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 1414070 29761 195609 1188700 56124 68150 177763 196100 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b>NOTE 10 – <span style="text-decoration:underline">DERIVATIVE LIABILITY</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. Accordingly, the fair value of the 667 warrants was classified as a derivative liability on May 23, 2023. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On 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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On 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 7). 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 based on certain specified events. On February 19, 2026, the exercise price was adjusted to $0.38 and number of shares underlying was adjusted to 1,558,543 based on certain specified events. On February 19, 2026, 408,332 warrants were cashless exercised. On 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 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 events. 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</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 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.</span></p> 667 67.5 667 667 3 0.29 138.06 4.14 0 1.9 222 67.5 2028-07-06 222 222 1 0.29 135.73 4.14 0 2 560 37.5 2028-10-09 560 560 8 0.29 135.24 4.14 0 2.3 700 30 2029-03-07 700 700 14 0.29 126.53 4.15 0 2.7 5333 9.75 2029-06-05 5333 5333 263 0.29 122.18 4.15 0 2.9 80000 7.5 80000 1 600000 0.38 1558543 408332 0.32 1405721 304529 1020710 0.21 122874 122874 27501 0.29 122.18 4.15 0 2.9 1652 -561176 1275237 -446816 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 11 – <span style="text-decoration:underline">RELATED PARTY TRANSACTIONS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b>Services Provided by Related Party</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 $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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Accrued Liabilities and Other Payables – Related Parties</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b>  </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Membership Interest Purchase Agreement</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 Mr. Lu desires to exercise the Option.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On February 18, 2026, the Company and Mr. Lu 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 RT9 for $9.0 million, the fair market value on transaction date. The Company recorded proceeds in excess of its carrying value (approximately $1.9 million) to additional paid-in capital as a result of the capital transaction with related party under applicable SEC regulations.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company received $3,158,078 from Mr. Lu as of December 31, 2025, which was recorded as advance from pending sale of subsidiary – 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 <span style="-sec-ix-hidden: hidden-fact-868">$0</span>.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exchange Agreement</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On 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. Lu on May 6, 2026 following shareholder approval at which time the shares of Series D Preferred Stock were cancelled.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Office Space from Related Party</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Commencing 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.</span></p> 40382 15597 55382 30794 0 6835 450000 100000 100000 0.40 0.30 3000000 0.70 7000000 1 9000000 1900000 3158078 3158078 9000000 2074689 5000 1000 4000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 12 – <span style="text-decoration:underline">EQUITY</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Series C Convertible Preferred Stock</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On 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. Each share of Series C Preferred Stock has a stated value of $1,000.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders of the Series C Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each 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 beneficial ownership limitation of 19.99% was amended to 4.99%.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">In May 2026, 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of June 30, 2026 and December 31, 2025, 2,550 and 3,800 shares of Series C Preferred Stock were issued and outstanding, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Series D Convertible Preferred Stock</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders of the Series D Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each share of Series D Preferred Stock shall be convertible into common stock (the “Series D Conversion Shares”) at a conversion per share equal to $2.41, at the option of the holder, at any time after the Company has obtained shareholder approval for the issuance 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On 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 total of shares of common stock Mr. Lu would have been entitled to receive upon conversion of his Series D Preferred Stock.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of June 30, 2026 and December 31, 2025, 0 and 5,000 shares of Series D Preferred Stock were issued and outstanding, respectively.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Series E Convertible Preferred Stock</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Holders of the Series E Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law. Notwithstanding the foregoing, in addition, as long as any shares of Series E Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Series E Preferred Stock, voting as a separate class, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock in this Certificate of Designation, (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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In addition, the Company shall not issue any shares of Common Stock upon conversion of the Series E Preferred Stock or otherwise pursuant to the terms of the Series E Certificate of Designation if the issuance of such shares of Common Stock would exceed the aggregate number 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 required, which opinion shall be reasonably satisfactory to the Required Holders (as defined in the Series E Certificate of Designation).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of June 30, 2026 and December 31, 2025, 19,396 and 19,500 shares of Series E Preferred Stock were issued and outstanding, respectively.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares and Warrants Sold for Cash from the February 2026 Private Offering</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2026, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional 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 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”); (iii) Series A-1 warrants to purchase up to 6,372,550 shares of Common Stock (the “Series A-1 Warrants,” and the shares issuable upon exercise thereof, the “Series A-1 Warrant Shares”) and (iv) Series A-2 warrants to purchase up to 6,372,550 shares of Common Stock (the “Series A-2 Warrants,” together with the Series A-1 Warrants, the “Warrants”) and the shares issuable upon exercise thereof, the “Series A-2 Warrant Shares,” together with the Series A-1 Warrant Shares, the “Warrant Shares”). The Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”. The total gross proceeds were $3,249,412.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As compensation to H.C. Wainwright &amp; 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. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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%; expected volatility of 108.52%; expected life of 5.0 years; and expected dividend yield of 0%.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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%; expected volatility of 147.59%; expected life of 1.5 years; and expected dividend yield of 0%.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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%; expected volatility of 108.52%; expected life of 5.0 years; and expected dividend yield of 0%.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Services</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During 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 rendered. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Pre-funded Warrant Cashless Exercise</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Warrant Cashless Exercise</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Pre-funded Warrant Cash Exercise</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Debt Conversion</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Accrued Bridge Loan Payable Commitment Fee</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In June 2026, the Company issued 100,000 shares of its common stock for accrued commitment fee for the purchase of bridge loan. These shares 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued upon Waiver to Enter into Note Agreement</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 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).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Options</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td colspan="13" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Options Outstanding</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Options Exercisable</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Range of<br/> Exercise<br/> Price</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number <br/> Outstanding <br/> at June 30, <br/> 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted Average <br/> Remaining <br/> Contractual Life<br/> (Years)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average<br/> Exercise <br/> Price</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number<br/> Exercisable at<br/> June 30, <br/> 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/>Price</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="width: 16%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.28 – 31.20</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 14%; text-align: right"><span style="-keep: true">2,164,219</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 15%; text-align: right"><span style="-keep: true">3.00</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 14%; text-align: right"><span style="-keep: true">0.31</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 12%; text-align: right"><span style="-keep: true">1,666,163</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 12%; text-align: right"><span style="-keep: true">0.32</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">48.75 – 123.00</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">18,117</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">0.73</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">79.87</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">18,117</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">79.87</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="padding-bottom: 1.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">154.50 – 228.00</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">7,500</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">3.57</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">226.43</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">7,500</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">226.43</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="padding-bottom: 2.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.28 – 228.00</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">2.98</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">1.74</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,691,780</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">2.17</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock option activity for the six months ended June 30, 2026 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number of <br/> Options</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%"><span style="-keep: true">Outstanding at January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">41,169</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">79.43</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="-keep: true">Granted</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,150,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">0.28</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Expired</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,333</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(44.48</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1.74</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">Options exercisable at June 30, 2026</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,691,780</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">2.17</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Options expected to vest</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">498,056</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.28</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The aggregate intrinsic value of stock options outstanding and stock options exercisable at June 30, 2026 was approximately $19,000 and $15,000, respectively.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A 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:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><span style="-keep: true">Number of<br/> Options</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">Nonvested at January 1, 2026</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-869"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-870"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 76%"><span style="-keep: true">Granted</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,150,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">0.28</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Vested</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,651,944</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(0.28</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Nonvested at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">498,056</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">0.28</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Warrants (Except Pre-Funded Warrants)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td colspan="13" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Warrants Outstanding</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Warrants Exercisable</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Range of <br/> Exercise <br/> Price</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number<br/> Outstanding at <br/> June 30, <br/> 2026</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted Average<br/> Remaining <br/> Contractual Life <br/> (Years)</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number<br/> Exercisable at<br/> June 30, <br/> 2026</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/>Price</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="width: 16%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.21 – 0.64</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 14%; text-align: right"><span style="-keep: true">13,186,602</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 15%; text-align: right"><span style="-keep: true">2.95</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 14%; text-align: right"><span style="-keep: true">0.51</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 12%; text-align: right"><span style="-keep: true">13,186,602</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 12%; text-align: right"><span style="-keep: true">0.51</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.75 – 37.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,593</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2.85</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">14.26</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,593</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">14.26</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">$</span></td> <td style="text-align: right"><span style="-keep: true">67.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">889</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1.93</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">67.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">889</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">67.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td> <td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">187.50</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">8,264</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">0.81</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">187.50</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">8,264</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">187.50</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="padding-bottom: 2.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.21 – 187.50</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">13,202,348</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">2.95</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.64</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">13,202,348</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.64</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock warrant activity for the six months ended June 30, 2026 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number of <br/> Warrants</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise<br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%"><span style="-keep: true">Outstanding at January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">95,746</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">24.06</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Repricing adjustment</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,776,445</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.33</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">Granted</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,063,728</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.51</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Exercised</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,733,571</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">(0.33</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">13,202,348</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.64</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="-keep: true">Exercisable at June 30, 2026</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.64</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The aggregate intrinsic value of both stock warrants outstanding and stock warrants exercisable at June 30, 2026 was approximately $10,000.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Warrants Issued in February 2026</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2026, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional 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 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”); (iii) Series A-1 warrants to purchase up to 6,372,550 shares of Common Stock (the “Series A-1 Warrants,” and the shares issuable upon exercise thereof, the “Series A-1 Warrant Shares”) and (iv) Series A-2 warrants to purchase up to 6,372,550 shares of Common Stock (the “Series A-2 Warrants,” together with the Series A-1 Warrants, the “Warrants”) and the shares issuable upon exercise thereof, the “Series A-2 Warrant Shares,” together with the Series A-1 Warrant Shares, the “Warrant Shares”). The Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 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.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As compensation to H.C. Wainwright &amp; 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. 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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These warrants were classified in shareholders’ equity as the number of shares were fixed and determinable, and no other provisions precluded equity treatment.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Warrants Exercised in February 2026</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2026, pursuant to the terms of related warrant agreements, 1,733,571 warrants were cashless exercised.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Pre-Funded Warrants</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The number of pre-funded warrants outstanding as of June 30, 2026 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap"><span style="-keep: true">Description</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number<br/> Outstanding</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Pre-funded warrants issued in December 2024</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">150,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">0.01</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Pre-funded warrants issued in February 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">3,341,000</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">0.0001</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">3,491,000</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.0005</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">A summary of pre-funded warrant activity during the six months ended June 30, 2026 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number of <br/> Pre-Funded <br/> Warrants</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%"><span style="-keep: true">Outstanding at January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">504,300</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">0.0030</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Pre-funded warrants granted</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">5,882,353</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.0001</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Pre-funded warrants exercised</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(2,895,653</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">(0.0001</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">3,491,000</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.0005</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Pre-funded Warrants Issued in February 2026</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2026, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional 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 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”); (iii) Series A-1 warrants to purchase up to 6,372,550 shares of Common Stock (the “Series A-1 Warrants,” and the shares issuable upon exercise thereof, the “Series A-1 Warrant Shares”) and (iv) Series A-2 warrants to purchase up to 6,372,550 shares of Common Stock (the “Series A-2 Warrants,” together with the Series A-1 Warrants, the “Warrants”) and the shares issuable upon exercise thereof, the “Series A-2 Warrant Shares,” together with the Series A-1 Warrant Shares, the “Warrant Shares”). The Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Pre-funded 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.</span></p> 100000000 100000000 10000000 10000000 10000 0.0001 1000 1 2.41 0.1999 0.1999 0.0499 723 300000 527 218672 2550 2550 3800 3800 5000 0.0001 1000 1 2.41 0.0499 2074689 5000 0 0 5000 5000 19500 0.0001 1000 1 1.5 0.0499 104 69000 19396 19396 19500 19500 490197 0.51 0.5099 5882353 6372550 6372550 3249412 0.51 P5Y 0.0499 0.0999 0.0001 0.0499 0.0999 0.07 0.01 0.05 318628 0.6375 6009845 1.09 0.0357 1.0852 P5Y 0 5328870 1.09 0.0342 1.4759 P1Y6M 0 294001 1.09 0.0357 1.0852 P5Y 0 3154455 94957 786601 763614 22987 655000 583475 454430 96600 32445 354257 354300 1268672 1733571 2541353 2541353 2541353 2541353 254 254 545950 5524 551474 1 100000 138000 138000 200000 58200 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td colspan="13" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Options Outstanding</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Options Exercisable</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Range of<br/> Exercise<br/> Price</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number <br/> Outstanding <br/> at June 30, <br/> 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted Average <br/> Remaining <br/> Contractual Life<br/> (Years)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average<br/> Exercise <br/> Price</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number<br/> Exercisable at<br/> June 30, <br/> 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/>Price</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="width: 16%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.28 – 31.20</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 14%; text-align: right"><span style="-keep: true">2,164,219</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 15%; text-align: right"><span style="-keep: true">3.00</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 14%; text-align: right"><span style="-keep: true">0.31</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 12%; text-align: right"><span style="-keep: true">1,666,163</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 12%; text-align: right"><span style="-keep: true">0.32</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">48.75 – 123.00</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">18,117</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">0.73</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">79.87</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">18,117</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">79.87</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="padding-bottom: 1.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">154.50 – 228.00</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">7,500</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">3.57</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">226.43</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">7,500</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">226.43</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="padding-bottom: 2.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.28 – 228.00</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">2.98</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">1.74</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1,691,780</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">2.17</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 0.28 31.2 2164219 P3Y 0.31 1666163 0.32 48.75 123 18117 P0Y8M23D 79.87 18117 79.87 154.5 228 7500 P3Y6M25D 226.43 7500 226.43 0.28 228 2189836 P2Y11M23D 1.74 1691780 2.17 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock option activity for the six months ended June 30, 2026 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number of <br/> Options</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%"><span style="-keep: true">Outstanding at January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">41,169</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">79.43</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="-keep: true">Granted</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2,150,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">0.28</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Expired</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,333</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(44.48</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">2,189,836</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">1.74</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">Options exercisable at June 30, 2026</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,691,780</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">2.17</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Options expected to vest</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">498,056</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.28</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> </table> 41169 79.43 2150000 0.28 1333 44.48 2189836 1.74 1691780 2.17 498056 0.28 19000 15000 1.2181 0.041 0 P1Y6M P3Y 360638 1.051 0.0429 0 P3Y 6115 248942 -28085 218483 4454 30459 32539 248942 -18926 218483 9312 30459 28238 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A 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:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><span style="-keep: true">Number of<br/> Options</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">Nonvested at January 1, 2026</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-869"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-870"><span style="-keep: true">-</span></div></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 76%"><span style="-keep: true">Granted</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2,150,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">0.28</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Vested</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,651,944</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(0.28</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Nonvested at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">498,056</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">0.28</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 2150000 0.28 1651944 0.28 498056 0.28 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td colspan="13" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Warrants Outstanding</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Warrants Exercisable</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Range of <br/> Exercise <br/> Price</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number<br/> Outstanding at <br/> June 30, <br/> 2026</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted Average<br/> Remaining <br/> Contractual Life <br/> (Years)</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Number<br/> Exercisable at<br/> June 30, <br/> 2026</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/>Price</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="width: 16%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.21 – 0.64</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 14%; text-align: right"><span style="-keep: true">13,186,602</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 15%; text-align: right"><span style="-keep: true">2.95</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 14%; text-align: right"><span style="-keep: true">0.51</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 12%; text-align: right"><span style="-keep: true">13,186,602</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 12%; text-align: right"><span style="-keep: true">0.51</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.75 – 37.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,593</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">2.85</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">14.26</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">6,593</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">14.26</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">$</span></td> <td style="text-align: right"><span style="-keep: true">67.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">889</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1.93</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">67.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">889</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">67.50</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td> <td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">187.50</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">8,264</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">0.81</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">187.50</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">8,264</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">187.50</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="padding-bottom: 2.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.21 – 187.50</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">13,202,348</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">2.95</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.64</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">13,202,348</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.64</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 0.21 0.64 13186602 P2Y11M12D 0.51 13186602 0.51 9.75 37.5 6593 P2Y10M6D 14.26 6593 14.26 67.5 889 P1Y11M4D 67.5 889 67.5 187.5 8264 P0Y9M21D 187.5 8264 187.5 0.21 187.5 13202348 P2Y11M12D 0.64 13202348 0.64 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock warrant activity for the six months ended June 30, 2026 was as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number of <br/> Warrants</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise<br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%"><span style="-keep: true">Outstanding at January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">95,746</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">24.06</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Repricing adjustment</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">1,776,445</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.33</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span style="-keep: true">Granted</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,063,728</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.51</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt"><span style="-keep: true">Exercised</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(1,733,571</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">(0.33</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">13,202,348</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.64</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="-keep: true">Exercisable at June 30, 2026</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">13,202,348</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.64</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> </table> 95746 24.06 1776445 0.33 13063728 0.51 1733571 -0.33 13202348 0.64 13202348 0.64 10000 490197 0.51 0.5099 5882353 6372550 6372550 0.51 P5Y 0.0499 0.0999 0.0001 0.0499 0.0999 0.07 0.01 0.05 318628 0.6375 1733571 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The number of pre-funded warrants outstanding as of June 30, 2026 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap"><span style="-keep: true">Description</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number<br/> Outstanding</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left"><span style="-keep: true">Pre-funded warrants issued in December 2024</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">150,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">0.01</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Pre-funded warrants issued in February 2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">3,341,000</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">0.0001</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">3,491,000</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.0005</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 150000 0.01 3341000 0.0001 3491000 0.0005 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">A summary of pre-funded warrant activity during the six months ended June 30, 2026 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Number of <br/> Pre-Funded <br/> Warrants</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Weighted <br/> Average <br/> Exercise <br/> Price</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%"><span style="-keep: true">Outstanding at January 1, 2026</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">504,300</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">0.0030</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Pre-funded warrants granted</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">5,882,353</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">0.0001</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Pre-funded warrants exercised</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(2,895,653</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="-keep: true">(0.0001</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"><span style="-keep: true">Outstanding at June 30, 2026</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">3,491,000</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true">$</span></td><td style="padding-bottom: 2.5pt; text-align: right"><span style="-keep: true">0.0005</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 504300 0.003 5882353 0.0001 -2895653 -0.0001 3491000 0.0005 490197 0.51 0.5099 5882353 6372550 6372550 0.0001 0.0499 0.0999 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 13 - <span style="text-decoration:underline">STATUTORY RESERVE AND RESTRICTED NET ASSETS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company’s PRC subsidiary, Avalon Shanghai, is restricted in its ability to transfer a portion of its net asset to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends. The Company did not make any appropriation to statutory reserve for Avalon Shanghai during the years ended December 31, 2025 and 2024 as it incurred net loss in the periods. As of both June 30, 2026 and December 31, 2025, the restricted amount as determined pursuant to PRC statutory laws totaled $6,578.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Relevant PRC laws and regulations restrict the Company’s PRC subsidiary, Avalon Shanghai, from transferring a portion of its net assets, equivalent to its statutory reserve and its share capital, to the Company’s shareholders in the form of loans, advances or cash dividends. Only PRC entity’s accumulated profit may be distributed as dividend to the Company’s shareholders without the consent of a third party. As of both June 30, 2026 and December 31, 2025, total restricted net assets amounted to $1,206,578.</span></p> 0.10 0.50 6578 6578 1206578 1206578 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 14 – <span style="text-decoration:underline">CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant to the requirements of Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiary exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of consolidated subsidiary shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiary (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiary in the form of loans, advances or cash dividends without the consent of a third party.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company performed a test on the restricted net assets of consolidated subsidiary in accordance with such requirement and concluded that it was not applicable to the Company as the restricted net assets of the Company’s PRC subsidiary did not exceed 25% of the consolidated net assets of the Company, therefore, the condensed financial statements for the parent company have not been required.</span></p> 0.25 0.25 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 15 - <span style="text-decoration:underline">CONCENTRATIONS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Suppliers</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">No supplier accounted for 10% or more of the Company’s purchase during the three and six months ended June 30, 2026 and 2025.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 16 – <span style="text-decoration:underline">COMMITMENTS AND CONTINGENCIES</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Litigation</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From time to time, the Company is subject to ordinary routine litigation incidental to its normal business operations. The Company is not currently a party to, and its property is not subject to, any material legal proceedings, except as set forth below.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On October 28, 2019, Research Institute at Nationwide Children’s Hospital (“Research Institute”) filed a Complaint in the United States District Court for the Southern District of Ohio Eastern Division against Dr. Zhou, Li Chen, the Company and Genexosome with various claims against the Company and Genexosome including misappropriation of trade secrets in violation of the Defend Trade Secrets Act of 2016 and violation of Ohio Uniform Trade Secrets Act. The Company, Genexosome and the Research Institute entered into a Settlement Agreement dated June 7, 2022 (the “Settlement Date”) whereby the Company agreed to pay the Research Institute $450,000 on each of the sixty-day, one year and two-year anniversaries of the Settlement Date. In addition, the Company agreed to pay the Research Institute 30% of the Company’s initial pre-tax profit of $3,333,333, 20% of the Company’s second pre-tax profit of $3,333,333 and 10% of the Company’s third pre-tax profit of $3,333,333. The parties provided a mutual release as well. As of both June 30, 2026 and December 31, 2025, the accrued litigation settlement amounted to $363,450.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Operating Leases Commitment</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company is a party to leases for office space. These lease agreements expire through February 2029. Rent expense under all operating leases amounted to approximately $43,000 and $59,000 for the six months ended June 30, 2026 and 2025, respectively.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Supplemental cash flow information related to leases for the six months ended June 30, 2026 and 2025 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Six Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true">Cash paid for amounts included in the measurement of lease liabilities:</span></td><td><span style="-keep: true"> </span></td> <td colspan="2"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td colspan="2"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 76%; text-align: left"><span style="-keep: true">Operating cash flows paid for operating lease</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">38,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">45,563</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Right-of-use assets obtained in exchange for lease obligation:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Operating lease</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">169,743</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">127,486</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the lease term and discount rate for the Company’s operating leases as of June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Operating <br/> Lease</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">Weighted average remaining lease term (in years)</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2.09</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="-keep: true">Weighted average discount rate</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12.0</span></td><td style="text-align: left"><span style="-keep: true">%</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the maturity of lease liabilities under operating leases as of June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: left"><span style="-keep: true">For the Twelve-month Period Ending June 30:</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Operating <br/> Lease</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">2027</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">101,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">2028</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">51,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">2029</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">8,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">2030 and thereafter</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-871"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Total lease payments</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">160,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Amount of lease payments representing interest</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(13,945</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total present value of operating lease liabilities</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">146,055</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Current portion</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">89,831</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Long-term portion</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">56,224</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">146,055</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 450000 0.30 3333333 0.20 3333333 0.10 3333333 363450 363450 43000 59000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Supplemental cash flow information related to leases for the six months ended June 30, 2026 and 2025 is as follows:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">Six Months Ended June 30,</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2026</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="-keep: true">2025</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom"> <td><span style="-keep: true">Cash paid for amounts included in the measurement of lease liabilities:</span></td><td><span style="-keep: true"> </span></td> <td colspan="2"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td colspan="2"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; width: 76%; text-align: left"><span style="-keep: true">Operating cash flows paid for operating lease</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">38,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">45,563</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">Right-of-use assets obtained in exchange for lease obligation:</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-align: left"><span style="-keep: true">Operating lease</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">169,743</span></td><td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">127,486</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> </table> 38000 45563 169743 127486 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the lease term and discount rate for the Company’s operating leases as of June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td><span style="-keep: true"> </span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Operating <br/> Lease</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">Weighted average remaining lease term (in years)</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td><td style="width: 9%; text-align: right"><span style="-keep: true">2.09</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="-keep: true">Weighted average discount rate</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">12.0</span></td><td style="text-align: left"><span style="-keep: true">%</span></td></tr> </table> P2Y1M2D 0.12 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table summarizes the maturity of lease liabilities under operating leases as of June 30, 2026:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: left"><span style="-keep: true">For the Twelve-month Period Ending June 30:</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center"><span style="-keep: true">Operating <br/> Lease</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left"><span style="-keep: true">2027</span></td><td style="width: 1%"><span style="-keep: true"> </span></td> <td style="width: 1%; text-align: left"><span style="-keep: true">$</span></td><td style="width: 9%; text-align: right"><span style="-keep: true">101,000</span></td><td style="width: 1%; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true">2028</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">51,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">2029</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">8,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">2030 and thereafter</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-871"><span style="-keep: true">-</span></div></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Total lease payments</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true">160,000</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Amount of lease payments representing interest</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">(13,945</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true">)</span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Total present value of operating lease liabilities</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">146,055</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="-keep: true"> </span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true"> </span></td><td style="text-align: right"><span style="-keep: true"> </span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><span style="-keep: true">Current portion</span></td><td><span style="-keep: true"> </span></td> <td style="text-align: left"><span style="-keep: true">$</span></td><td style="text-align: right"><span style="-keep: true">89,831</span></td><td style="text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt"><span style="-keep: true">Long-term portion</span></td><td style="padding-bottom: 1.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="-keep: true"> </span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-keep: true">56,224</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><span style="-keep: true">Total</span></td><td style="padding-bottom: 2.5pt"><span style="-keep: true"> </span></td> <td style="border-bottom: Black 4pt double; text-align: left"><span style="-keep: true">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-keep: true">146,055</span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="-keep: true"> </span></td></tr> </table> 101000 51000 8000 160000 13945 146055 89831 56224 146055 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 17 – <span style="text-decoration:underline">SUBSEQUENT EVENTS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Series F Convertible Preferred Stock</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 2, 2026, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock with the Secretary of State of the State of Delaware, designating 5,000 shares of the Company’s authorized preferred stock as Series F Convertible Preferred Stock, par value $0.0001 per share (the “Series F Preferred Stock”). The material terms of the Series F Preferred Stock are summarized below.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Stated Value and Ranking.</i> Each share of Series F Preferred Stock has a stated value of $1,000. The Series F Preferred Stock ranks (i) senior to the Company’s common stock and any other class or series of capital stock hereafter created that by its terms ranks junior to the Series F Preferred Stock, and (ii) junior to any other class or series of capital stock of the Company.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Dividends. </i>No dividends are payable on the Series F Preferred Stock, except for stock dividends or distributions for which adjustments are made to the conversion price.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Voting Rights.</i> Holders of Series F Preferred Stock have no voting power except as otherwise required by the Delaware General Corporation Law. However, for so long as any shares of Series F Preferred Stock are outstanding, the Company may not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series F Preferred Stock, voting as a separate class, (a) alter or change adversely the powers, preferences or rights of the Series F Preferred Stock, (b) increase the number of authorized shares of Series F Preferred Stock, or (c) enter into any agreement with respect to any of the foregoing.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Liquidation Preference.</i> Upon any liquidation, dissolution or winding-up of the Company, holders of Series F Preferred Stock are entitled to receive, prior to any distribution to holders of common stock, an amount equal to 100% of the stated value per share.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Conversion Rights. </i>Each share of Series F Preferred Stock is convertible, at the option of the holder, at any time after the Shareholder Approval is obtained, into shares of common stock at a conversion price of $0.50 per share, subject to adjustment. No fractional shares of common stock will be issued upon conversion; in lieu thereof, the Company will pay cash or round up to the next whole share, at the Company’s option. The conversion of the Series F Preferred Stock is subject to a beneficial ownership limitation of 4.99% of the outstanding shares of common stock. The Company is not required to issue any shares of common stock upon conversion of the Series F Preferred Stock until the Shareholder Approval is obtained.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Anti-Dilution Adjustments</i>. The conversion price is subject to proportional adjustment in the event of stock dividends, stock splits, reverse stock splits, combinations, reclassifications and similar events. In the event of any recapitalization, reorganization, consolidation, merger or sale of all or substantially all of the Company’s assets, holders of Series F Preferred Stock will be entitled to receive, upon conversion, the same kind and amount of stock, securities or other assets or property that holders of common stock would receive in connection with such transaction.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Mandatory Redemption</i>. The Company is required to redeem 25% of the then outstanding shares of Series F Preferred Stock on each of October 1, 2026, November 1, 2026, December 1, 2026 and January 1, 2027, at a redemption price per share equal to 125% of the stated value. A holder may elect to convert shares subject to mandatory redemption into shares of common stock at any time prior to the applicable mandatory redemption date, and any shares so converted will reduce the number of shares subject to redemption on such date on a share-for-share basis.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On June 30, 2026, the Company entered into a securities purchase agreement with Allen O. Cage Jr., an individual accredited investor (the “Investor”), pursuant to which the Company agreed to issue and sell to the Investor (i) 400 shares of the Company’s Series F Preferred Stock, and (ii) 200,000 shares of the Company’s common stock as additional consideration for the Investor’s purchase of the Series F Preferred Stock, for an aggregate purchase price of $400,000. The transaction closed on July 2, 2026.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cashless Exercise of Pre-funded Warrants</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In July 2026, the Company issued 145,000 shares of its common stock upon cashless exercise of pre-funded warrants.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash Exercise of Pre-funded Warrants</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In July 2026, the Company issued 2,216,000 shares of its common stock upon the cash exercise of outstanding pre-funded warrants for aggregate proceeds of $222.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued as Commitment Fee</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In July 2026, the Company issued 200,000 shares of its common stock as commitment fee for the purchase of Series F Convertible Preferred Stock.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In July 2026, the Company issued 360,000 shares of its common stock as business loan commitment fee.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="-keep: true">On August 13, 2026, the Company issued 300,000 shares of its common stock as a loan commitment fee for the $250,000 promissory note issued to FirstFire Opportunities Fund, LLC on August 13, 2026.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Services</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During the period from July 1, 2026 through August 10, 2026, the Company issued a total of 2,375,000 shares of its common stock for services rendered and to be rendered.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares Issued for Series E Convertible Preferred Stock Conversion</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On August 5, 2026, the Company issued an aggregate of 673,480 share of its common stock upon conversion of 1,010.22 shares of its Series E Convertible Preferred Stock.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b>Name Change</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="background-color: white">On July 17, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended with the Secretary of State of the State of Delaware to change the name of the Company from “Avalon GloboCare Corp.” to “Change Agents Corporation” effective as of July 20, 2026 (the “Name Change”). In connection with the Name Change, the Company’s trading symbol for its common stock began trading on The Nasdaq Capital Market on July 22, 2026 under the symbol “CHGA”.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><b>Equity Purchase Agreement</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">On July 22, 2026, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Hudson Global Ventures, LLC, a Nevada limited liability company (the “Investor”). Pursuant to the Purchase Agreement, upon the terms and subject to the conditions set forth therein, the Company may, from time to time during the Commitment Period, in its sole discretion, require the Investor to purchase shares of the Company’s common stock, par value $0.0001 per shares (“Common Stock”) having an aggregate purchase price of up to $10,000,000 at a fixed purchase price per share of $0.30. The Commitment Period ends on the earliest of (i) the date on which the Investor has purchased shares equal to the $10,000,000 maximum commitment amount, (ii) 36 months after the date of the Purchase Agreement, (iii) written notice of termination by the Company to the Investor, subject to certain limitations, and (iv) certain bankruptcy-related events.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">In connection with the Purchase Agreement, the Company issued to the Investor a common stock purchase warrant (the “Warrant”) to purchase up to 925,925 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment as provided in the Warrant. The Warrant is exercisable at any time following stockholder approval of the shares issuable upon exercise of the Warrant (the “Stockholder Approval Date”) until 5:00 p.m. Eastern time on the date that is five years after the Stockholder Approval Date, subject to the terms and limitations set forth therein, including a 4.99% beneficial ownership limitation.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Business Loan and Security Agreement</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 24, 2026, the Company entered into a Business Loan and Security Agreement (the “Business Loan Agreement”) with a commercial funding source (the “Lender”), pursuant to which the Company obtained a loan from the Lender in the principal amount of $825,000 (the “Business Loan”), with net proceeds to the Company of $254,350, following the payment of an administration fee of $41,250 and repayment in full of the current loan from Agile Lending in the amount of $529,400, with a total repayment amount of $1,188,000, including interest charges of $363,000 (assuming all payments are made on time and the July 2026 Loan is not prepaid) repayable in 32 weekly installments of $37,125 with a maturity date of July 29, 2026. Pursuant to the Business Loan Agreement, the Company granted the Lender a continuing security interest in certain collateral (as defined in the Business Loan Agreement). In connection with the Business Loan, the Company issued Lender a Confessed Judgement Secured Promissory Note (the “Secured Note”) dated July 24, 2026 in the amount 825,000 with a maturity date of February 19, 2027.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Forbearance Letter Agreement</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 24, 2026, the Company entered into a Forbearance Letter Agreement with Agile Lending LLC under which it agreed to issue 360,000 shares of its common stock (the “Forbearance Shares”) in consideration of Agile Lending’s agreement to forbear the July 2026 payment and to not under the March 2026 Business Loan and Security Agreement between the Company and Agile Lending. The Company granted Agile Lending piggyback registration rights with respect to the Forbearance Shares.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b style="-keep: true">Original Issue Discount Promissory Note issued to FirstFire Opportunities Fund, LLC</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b style="-keep: true"> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true">On August 13, 2026, the Company issued promissory note to FirstFire 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 Company intends to use the $144,000 of the net proceeds of the FirstFire Note to repay that certain 7% promissory note in the original principal amount of $233,910 issued to anquish Funding Group Inc. and the remainder for working capital and general corporate purposes.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true">The FirstFire Note matures on February 13, 2027 and has a one-time interest charge equal to 18.75% of the principal amount, or $46,875,000, 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 “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 November 13, 2026, and December 13 2026, and January 13, 2027 and (ii) the total remaining balance of the FirstFire Note shall be paid on February 13, 2027.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true">The Company granted FirstFire a “most-favored nations” provision with respect to the issuance of any debt that is not convertible into common stock of the Company (or amends any non-convertible debt that was issued before the Issue Date). In addition, the Company agreed to use 25% of the net proceeds from an issuance of equity or debt or sale of assets to repay amounts outstanding under the FirstFire Note.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="-keep: true"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="-keep: true">In addition, if, at any time on or after the issue date of the FirstFire Note, and prior to the full repayment, the Companyr or any of its subsidiaries (the “Subsidiaries”) receives cash proceeds from the issuance of equity or debt or the sale of assets (including but not limited to real property) by the Company or any of the Borrower’s Subsidiaries, the FirstFIre shall have the right in its sole discretion to require the Company or the Subsidiaries to immediately apply up to 12.5% of such proceeds (net of outstanding legal fees of the Borrower, underwriter or broker-dealer expense and legal fee reimbursements, outstanding auditor fees of the Borrower, outstanding transfer agent fees of the Borrower, and fees of the SEC and FINRA in connection with such transaction, in each case if applicable) to repay all or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due under this Note.<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></span></p> 5000 0.0001 1000 1 0.5 0.0499 0.25 0.25 0.25 0.25 1.25 1.25 1.25 1.25 400 200000 400000 145000 2216000 222 200000 360000 300000 250000 2375000 673480 1010.22 0.0001 10000000 0.3 10000000 925925 0.01 0.0499 825000 254350 41250 529400 1188000 363000 37125 2026-07-29 825000 2027-02-19 360000 250000 50000 200000 144000 0.07 233910 2027-02-13 0.1875 46875000 0.10 62500 62500 62500 0.25 0.125 S-1/A 5000 5000 P5Y http://fasb.org/srt/2026#ChiefExecutiveOfficerMember http://fasb.org/srt/2026#ChiefExecutiveOfficerMember 0001630212 true Assumed the Series A convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $150.00 per share. Assumed the Series B convertible preferred stock was converted into shares of common stock of the Company at a conversion price of $56.70 per share. 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 years ended December 31, 2025. 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 year ended December 31, 2024. Second Warrant, which was issued on May 23, 2023, July 6, 2023, October 9, 2023, and March 7, 2024, was cancelled in June 2024. Second Warrant, which was issued on June 5, 2024, is still outstanding as of December 31, 2025 and 2024. 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.