GAXOS.AI INC.

Previous wording

Comparison of Our Results of Operations for the Three Months Ended March 31, 2025 and 2024.**

Current wording

Comparison of Our Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024.**

Previous wording

During the three months ended March 31, 2025, we generated revenues of $23,732 primarily from revenues generated, through RNK Health, for providing non-clinical services to support patient care of $22,552. Additionally, during the three months ended March 31, 2025, we generated revenues of $1,124 from the sale of health coaching packages to our customers, revenue of $51 from subscription services, and revenue of $5 from in-app games items. Health coaching packages consist of a series of lab tests and personal health coaching sessions. During the three months ended March 31, 2024, we generated revenue of $19. Once we achieve a critical mass of users, we plan to offer new features and to charge fees in order to generate revenues from these added features.

Current wording

During the three months ended June 30, 2025, we generated revenues of $170,971 primarily from revenues generated, through RNK Health, for providing non-clinical services to support patient care of $170,398. Additionally, during the three months ended June 30, 2025, we generated revenues of $0 from the sale of health coaching packages to our customers, revenue of $556 from subscription services, and revenue of $18 from in-app games items. Health coaching packages consist of a series of lab tests and personal health coaching sessions. During the three months ended June 30, 2024, we generated no revenue. Once we achieve a critical mass of users, we plan to offer new features and to charge fees in order to generate revenues from these added features.

Previous wording

During the three months ended March 31, 2025 and 2024, we incurred operating expenses of $1,415,427 and $1,043,858, respectively, an increase of $371,569, or 35.6%. Operating expenses consisted of the following:

Current wording

During the three months ended June 30, 2025 and 2024, we incurred operating expenses of $1,153,665 and $854,503, respectively, an increase of $299,162, or 35.0%. During the six months ended June 30, 2025 and 2024, we incurred operating expenses of $2,569,092 and $1,898,361, respectively, an increase of $670,731, or 35.3%. Operating expenses consisted of the following:

Previous wording

We capitalize all development and production service payments to third-party developers as internal-use software development costs and licenses once we reach the application development stage. During the three months ended March 31, 2025 and 2024, we reported research and development fees of $220,989 and $182,329, respectively, an increase of $38,660, or 21.2%. The increase is primarily due to an increase in outside development costs incurred in connection with the development of Gaxos Health platforms offset by a decrease in outside development costs incurred in connection with the development of Gaxos Games. We expect research and development expenses to increase in the future as development of Gaxos Games, Gaxos Health and RNK Health accelerates.

Current wording

During the six months ended June 30, 2025 and 2024, we reported research and development fees of $464,009 and $431,670, respectively, an increase of $32,339, or 7.5%. The increase is primarily due to an increase in outside development costs incurred in connection with the development of Gaxos Health and RNK Health platforms, offset by a decrease in outside development costs incurred in connection with the development of Gaxos Games. We expect research and development expenses to increase in the future as development of Gaxos Games, Gaxos Health and RNK Health accelerates.

Previous wording

For the three months ended March 31, 2025 and 2024, general and administrative expenses consisted of the following:

Current wording

For the three and six months ended June 30, 2025 and 2024, general and administrative expenses consisted of the following:

Previous wording

During the three months ended March 31, 2025 and 2024, compensation and related benefits amounted to $588,985 and $363,484, respectively, an increase of $225,501, or 62.0%. The increase during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily attributable to the increase in executive officer bonuses paid of $250,000, offset by a decrease in employee compensation and related benefits of $24,499.

Current wording

During the six months ended June 30, 2025 and 2024, compensation and related benefits amounted to $773,738 and $517,062, respectively, an increase of $256,676, or 49.6%. The increase during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily attributable to the increase in executive officer bonuses paid of $250,000 and an increase in stock-based compensation of $10,478 from accretion of stock option expense, offset by a decrease in employee compensation and related benefits of $3,802.

Previous wording

During the three months ended March 31, 2025 and 2024, we incurred professional fees of $232,890 and $274,688, respectively, a decrease of $41,798, or 15.2%, primarily attributable to a decrease in advisory fees of $79,945 and a decrease in investor relations fees of $30,000, offset by an increase in legal fees of $32,679, an increase in accounting fees of $22,122, and an increase in stock-based consulting fees attributable to the accretion of stock-based consulting fees related to issuance of stock options to consultants of $13,348

Current wording

During the six months ended June 30, 2025 and 2024, we incurred professional fees of $358,847 and $560,361, respectively, a decrease of $201,514, or 36.0%, primarily attributable to a decrease in advisory fees of $181,695, a decrease in investor relations fees of $30,450 and a decrease in legal fees of $9,290, offset by an increase in accounting fees of $16,287, and an increase in stock-based consulting fees attributable to the accretion of stock-based consulting fees related to issuance of stock options to consultants of $3,634

Previous wording

Other general and administrative expenses consist of advertising and marketing expenses, office expenses, insurance, listing fees, computer and interest expenses, travel expenses, amortization expense, and other general business expenses. During the three months ended March 31, 2025 and 2024, we incurred other general and administrative expenses of $372,563 and $223,357, respectively, an increase of $149,206, or 66.8%. This increase was primarily attributable to an increase in advertising and marketing fees of $142,295 in connection with the marketing of our RNK Health services.

Current wording

During the three months ended June 30, 2025 and 2024, we incurred other general and administrative expenses of $599,936 and $165,911, respectively, an increase of $434,025, or 261.6%. This increase was primarily attributable to an increase in advertising and marketing fees of $362,455 in connection with the marketing of our RNK Health services, an increase in amortization expense of $42,400, and an increase in other general and administrative expenses of $29,170.

Previous wording

During the three months ended March 31, 2025 and 2024, we reported a loss from operations of $1,391,695 and $1,043,839, respectively, an increase of $347,856, or 33.3%. The increase in loss from operations was due to an increase in general and administrative expenses and an increase in research and development expenses as discussed above.

Current wording

During the three months ended June 30, 2025 and 2024, we reported a loss from operations of $982,694 and $854,503, respectively, an increase of $128,191, or 15.0%. The increase in loss from operations was due to an increase in general and administrative expenses, offset by a decrease in research and development expenses, and an increase in revenues as discussed above.

Previous wording

During the three months ended March 31, 2025 and 2024, we reported other income of $159,633 and $131,694, respectively, which consisted of interest income and a realized gain on short-term investments in both years.

Current wording

During the three months ended June 30, 2025 and 2024, we reported other income of $158,122 and $45,265, respectively, which consisted of interest income and realized and unrealized gains on short-term investments.

Previous wording

During the three months ended March 31, 2025 and 2024, our net loss amounted to $1,232,062 and $912,145, respectively, an increase of $319,917, or 35.1%. During the three months ended March 31, 2025 and 2024, we adjusted net loss for the net loss of subsidiary attributable to noncontrolling interest by $40,262 and $0, respectively Accordingly, during the three months ended March 31, 2025 and 2024, our net loss attributable to common shareholders was $1,191,800, or $0.17 per common share (basic and diluted) and $912,145, or $0.91 per common share (basic and diluted), respectively, a decrease of $279,655, or 30.7%.

Current wording

During the three months ended June 30, 2025 and 2024, our net loss amounted to $824,572 and $809,238, respectively, an increase of $15,334, or 1.9%. During the three months ended June 30, 2025 and 2024, we adjusted net loss for the net loss of subsidiary attributable to noncontrolling interest by $75,184 and $0, respectively Accordingly, during the three months ended June 30, 2025 and 2024, our net loss attributable to common shareholders was $749,388, or $0.11 per common share (basic and diluted) and $809,238, or $0.72 per common share (basic and diluted), respectively, a decrease of $59,850, or 7.4%.

Previous wording

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On March 31, 2025, we had a cash balance of $2,571,340, had short-term investments of $12,116,298, and had working capital of $14,666,345. During the three months ended March 31, 2025, we used net cash in operations of $1,297,485.

Current wording

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On June 30, 2025, we had a cash balance of $1,718,964, had short-term investments of $12,326,666, and had working capital of $13,992,440. During the six months ended June 30, 2025, we used net cash in operations of $2,014,345.

Previous wording

For the three months ended March 31, 2025, net cash used in operations was $1,297,485, which primarily resulted from our net loss of $1,232,062, adjusted for the add back of amortization expense of $29,749, stock-based compensation to employees and consultants of $32,880, and a realized gain on short-term investments of $(11,445), and changes in operating asset and liabilities such as an increase in accounts receivable of $4,871, an increase in prepaid expenses and other current assets of $210,977, a decrease in accounts payable of $17,118, an increase in accrued expenses of $117,481, and a decrease in deferred revenues of $1,122.

Current wording

For the six months ended June 30, 2025, net cash used in operations was $2,014,345, which primarily resulted from our net loss of $2,056,634, adjusted for the add back of amortization expense of $86,311, stock-based compensation to employees and consultants of $63,353, and a realized and unrealized gain on short-term investments of $(22,665), and changes in operating asset and liabilities such as an increase in accounts receivable of $9,368, an increase in prepaid expenses and other current assets of $179,285, a decrease in accounts payable of $88,074, an increase in accrued expenses of $192,577, and a decrease in deferred revenues of $560.

Previous wording

For the three months ended March 31, 2024, net cash used in operations was $1,099,417, which primarily resulted from our net loss of $912,145, adjusted for the add back of amortization expense of $8,683, stock-based compensation to employees of $15,806, and a realized gain on short-term investments of $119,715, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current assets of $335,781, an increase in accounts payable of $177,268, and an increase in accrued expenses of $66,469.

Current wording

For the six months ended June 30, 2024, net cash used in operations was $1,837,867, which primarily resulted from our net loss of $1,721,383, adjusted for the add back of amortization expense of $22,846, stock-based compensation to employees of $49,241, and a realized gain on short-term investments of $119,715, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current assets of $191,699, an increase in accounts payable of $81,779, and an increase in accrued expenses of $40,292.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $10,529,274, which resulted from the purchase of short-term investments of $12,171,293 primarily consisting of corporate bonds, the purchase of software intangible assets of $500,000, and an increase in capitalized internal-use software development costs of $22,800, offset by proceeds received from the sale of short-term investments of $2,164,819.

Current wording

For the six months ended June 30, 2025, net cash used in investing activities was $10,664,790, which resulted from the purchase of short-term investments of $13,313,986 primarily consisting of corporate bonds and other equity securities, the purchase of software intangible assets of $500,000, and an increase in capitalized internal-use software development costs of $44,900, offset by proceeds received from the sale of short-term investments of $3,194,096.

Previous wording

For the three months ended March 31, 2024, net cash provided by investing activities was $349,602, which resulted from proceeds received from the sale of short-term investments of $2,616,619, offset by cash used for the purchase of short-term investments of $2,095,707, an increase in capitalized internal-use software development costs of $21,310, and the purchase of an intangible asset of $150,000.

Current wording

For the six months ended June 30, 2024, net cash provided by investing activities was $147,604, which resulted from proceeds received from the sale of short-term investments of $2,617,205, offset by cash used for the purchase of short-term investments of $2,096,293, the purchase of equity securities of $199,998, an increase in capitalized internal-use software development costs of $23,310, and the purchase of an intangible asset of $150,000.

Previous wording

For the three months ended March 31, 2025, we did not have any cash flows from financing activities.

Current wording

For the six months ended June 30, 2025, we did not have any cash flows from financing activities.

Previous wording

For the three months ended March 31, 2024, net cash provided by financing activities was $3,037,382. On March 13, 2024, we entered into a securities purchase agreement with an institutional investor for the issuance and sale in a private placement of (i) 108,000 shares of the Company’s common stock (the “Common Stock”), (ii) pre-funded warrants to purchase 520,367 shares of Common Stock, (iii) series A warrants to purchase up to 628,367 shares of Common Stock, and (iv) series B warrants to purchase up to 628,367 shares Common Stock. The purchase price of each share of Common Stock and associated warrants was $5.57 and the purchase price of each pre-funded warrant and associated warrants was $5.569. The private placement closed on March 15, 2024 and the aggregate net proceeds of $3,056,984, after deducting placement agent fees and expenses and offering expenses payable by the Company. Additionally, during the three months ended March 31, 2024, we purchased and cancelled 6,846 treasury shares for $19,602, or at an average price of $2.86 per share.

Current wording

For the six months ended June 30, 2024, net cash provided by financing activities was $3,037,486. On March 13, 2024, we entered into a securities purchase agreement with an institutional investor for the issuance and sale in a private placement of (i) 108,000 shares of the Company’s common stock (the “Common Stock”), (ii) pre-funded warrants to purchase 520,367 shares of Common Stock, (iii) series A warrants to purchase up to 628,367 shares of Common Stock, and (iv) series B warrants to purchase up to 628,367 shares Common Stock. The purchase price of each share of Common Stock and associated warrants was $5.57 and the purchase price of each pre-funded warrant and associated warrants was $5.569. The private placement closed on March 15, 2024 and the aggregate net proceeds of $3,056,984, after deducting placement agent fees and expenses and offering expenses payable by the Company. Additionally, during the six months ended June 30, 2024, we purchased and cancelled 6,846 treasury shares for $19,602, or at an average price of $2.86 per share.

Previous wording

For the three months ended March 31, 2025 and 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

Current wording

For the six months ended June 30, 2025 and 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.