Avalon GloboCare Corp.

Previous wording

The following discussion and analysis of our financial condition and results of operations for the three months ended March 31, 2025 and 2024 should be read in conjunction with our condensed consolidated financial statements and related notes to those condensed consolidated financial statements that are included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis of our financial condition and results of operations for the three and six months ended June 30, 2025 and 2024 should be read in conjunction with our condensed consolidated financial statements and related notes to those condensed consolidated financial statements that are included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

We are a commercial-stage company dedicated to developing and delivering precision diagnostic consumer products and the advancement of intellectual property in cellular therapy. We are currently marketing the KetoAir™ breathalyzer device and plan to develop additional diagnostic uses of the breathalyzer technology. The KetoAir TM is registered with the U.S. Food and Drug Administration as a Class I medical device. In addition, we own and operate commercial real estate at our headquarters in Freehold, NJ.

Current wording

We are developer of precision diagnostic consumer products and the advancement of intellectual property in cellular therapy. We are currently marketing the KetoAir™ breathalyzer device, which is owned and manufactured by Qi Diagnostics Limited, and plan to develop additional diagnostic uses of the breathalyzer technology. The KetoAir TM is registered with the U.S. Food and Drug Administration as a Class I medical device. We also continue to focus on advancing our intellectual property portfolio through existing patent applications. In addition, we own and operate commercial real estate at our headquarters in Freehold, NJ.

Previous wording

We had the following areas of focus in the three months ended March 31, 2025 and 2024:

Current wording

We had the following areas of focus in the three and six months ended June 30, 2025 and 2024:

Previous wording

We are focused on bringing forward intellectual property through joint patent filings with the Massachusetts Institute of Technology (“MIT”). We completed a sponsored research and co-development project with MIT led by Professor Shuguang Zhang as Principal Investigator. Using the unique QTY code protein design platform, six water-soluble variant cytokine receptors have been successfully designed and tested to show binding affinity to the respective cytokines. We currently are focused on bringing forward the intellectual property associated with this program through joint patent submissions.

Current wording

We are focused on bringing forward the existing patent applications previously filed with the Massachusetts Institute of Technology (“MIT”). We completed a sponsored research and co-development project with MIT led by Professor Shuguang Zhang as Principal Investigator. Using the unique QTY code protein design platform, six water-soluble variant cytokine receptors have been successfully designed and tested in a laboratory to show binding affinity to the respective cytokines. We currently are focused on bringing forward the existing patent applications previously filed as part of this program. We also continue to bring forward the existing patent application previously filed with Arbele related to CAR-T cellular therapy technologies.

Previous wording

In order to preserve cash and focus on and product commercialization, we have currently suspended all research and development efforts related to cellular therapy in order to redirect our funding efforts to our core business strategies outlined above.

Current wording

Inorder to preserve cash and focus on and product commercialization, we have currently suspended all research and development efforts related to cellular therapy in order to redirect our funding efforts to our core business strategies outlined above.

Previous wording

In addition, we owncommercial real estate that houses our headquarters in Freehold, New Jersey. These condensed consolidated financial statements have been prepared assuming that we 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.

Current wording

These condensed consolidated financial statements have been prepared assuming that we 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.

Previous wording

As reflected in the accompanying condensed consolidated financial statements, we had working capital deficit of approximately $11,655,000 at March 31, 2025 and had incurred recurring net losses and generated negative cash flow from operating activities of approximately $2,482,000 and $1,802,000 for the three months ended March 31, 2025, respectively.

Current wording

As reflected in the accompanying condensed consolidated financial statements, we had working capital deficit of approximately $14,132,000 at June 30, 2025 and had incurred recurring net losses and generated negative cash flow from operating activities of approximately $15,941,000 and $3,028,000 for the six months ended June 30, 2025, respectively.

Previous wording

We have a limited operating history and our continued growth is dependent upon the continuation of generating rental revenue from our income-producing real estate property in New Jersey, generating revenue for selling of Keto Air, and obtaining additional financing to fund future obligations and pay liabilities arising from ordinary course business operations. In addition, the current cash balance cannot be projected to cover our operating expenses for the next twelve months from the release date of this Quarterly Report on Form 10-Q. These matters raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital, implement our business plan, and generate sufficient revenues. There are no assurances that we will be successful in our efforts to generate sufficient revenues, maintain sufficient cash balance or report profitable operations or to continue as a going concern. We plan on raising capital through the sale of equity to implement our business plan. However, there is no assurance these plans will be realized and that any additional financings will be available to us on satisfactory terms and conditions, or at all.

Current wording

We have a limited operating history and our continued growth is dependent upon the continuation of generating rental revenue from our income-producing real estate property in New Jersey, generating revenue for selling of Keto Air, and obtaining additional financing to fund future obligations and pay liabilities arising from ordinary course business operations. In addition, the current cash balance cannot be projected to cover our operating expenses for the next twelve months from the release date of this Quarterly Report on Form 10-Q. These matters raise substantial doubt about our ability tocontinue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital, implement our business plan, and generate sufficient revenues. There are no assurances that we will be successful in our efforts to generate sufficient revenues, maintain sufficient cash balance or report profitable operations or to continue as a going concern. We plan on raising capital through the sale of equity to implement our business plan. However, there is no assurance these plans will be realized and that any additional financings will be available to us on satisfactory terms and conditions, or at all.

Previous wording

Significant estimates during the three months ended March 31, 2025 and 2024 include the useful life of investment in real estate and intangible assets, the assumptions used in assessing impairment of long-term assets, the valuation of deferred tax assets and the associated valuation allowances, the valuation of stock-based compensation, and the assumptions used to determine fair value of warrants and embedded conversion features of convertible note payable.

Current wording

Significant estimates during the three and six months ended June 30, 2025 and 2024 include the useful life of investment in real estate and 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, and the assumptions used to determine fair value of warrants and embedded conversion features of convertible note payable.

Previous wording

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

Current wording

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

Previous wording

For the three months ended March 31, 2025, we had real property rental revenue of $349,800, as compared to $314,588 for the three months ended March 31, 2024, an increase of $35,212, or 11.2%. The increase was primarily attributable to the increase in the number of tenants occupying the building in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. We expect that our revenue from real property rent will remain at its current level with minimal increase in the near future.

Current wording

For the three months ended June 30, 2025, we had real property rental revenue of $350,406, as compared to $327,887 for the three months ended June 30, 2024, representing an increase of $22,519, or 6.9%. For the six months ended June 30, 2025, we had real property rental revenue of $700,206, as compared to $642,475 for the six months ended June 30, 2024, representing an increase of $57,731, or 9.0%. The increase was primarily attributable to the increase in the number of tenants occupying the building in the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024. We expect that our revenue from real property rental will remain at its current level with minimal increase in the near future.

Previous wording

For the three months ended March 31, 2025, our real property operating expenses amounted to $280,390, as compared to $263,126 for the three months ended March 31, 2024, an increase of $17,264, or 6.6%. The increase was primarily attributable to an increase in utilities of approximately $23,000, offset by a decrease in other miscellaneous items of approximately $6,000.

Current wording

For the three months ended June 30, 2025, our real property operating expenses amounted to $251,077, as compared to $285,488 for the three months ended June 30, 2024, representing a decrease of $34,411, or 12.1%. The decrease was primarily attributable to a decrease in repairs and maintenance of approximately $36,000, offset by an increase in other miscellaneous items of approximately $2,000.

Previous wording

Our real property operating income for the three months ended March 31, 2025 was $69,410, representing an increase of $17,948, or 34.9%, as compared to $51,462 for the three months ended March 31, 2024. The increase was primarily attributable to the increase in real property rental revenue as described above. We expect our real property operating income will remain at its current level with minimal increase in the near future.

Current wording

Our real property operating income for the three months ended June 30, 2025 was $99,329, representing an increase of $56,930, or 134.3%, as compared to $42,399 for the three months ended June 30, 2024. Our real property operating income for the six months ended June 30, 2025 was $168,739, representing an increase of $74,878, or 79.8%, as compared to $93,861 for the six months ended June 30, 2024. The increase was primarily attributable to the increase in real property rental revenue and the decrease in real property operating expenses as described above. We expect our real property operating income will remain at its current level with minimal increase in the near future.

Previous wording

For the three months ended March 31, 2025, we had income from our investment in Lab Services MSO of $392,677, which consists of our share of Lab Services MSO’s net income of $503,833 and amortization of identifiable intangible assets acquired from Lab Services MSO acquisition of $111,156. We sold our ownership of 40% of Lab Services MSO on February 26, 2025.

Current wording

For the six months ended June 30, 2025, we had income from our investment in Lab Services MSO of $392,677, which consisted of our share of Lab Services MSO’s net income of $503,833 and amortization of identifiable intangible assets acquired from Lab Services MSO acquisition of $111,156. We sold our ownership of 40% of Lab Services MSO on February 26, 2025.

Previous wording

For the three months ended March 31, 2024, we had income from our investment in Lab Services MSO of $107,469, which consists of our share of Lab Services MSO’s net income of $274,202 and amortization of identifiable intangible assets acquired from Lab Services MSO acquisition of $166,733.

Current wording

For the six months ended June 30, 2024, we had loss from our investment in Lab Services MSO of $221,868 which consisted of our share of Lab Services MSO’s net income of $111,598 and amortization of identifiable intangible assets acquired from Lab Services MSO acquisition of $333,466.

Previous wording

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

Current wording

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

Previous wording

As a result of the foregoing, for the three months ended March 31, 2025, loss from operations amounted to $1,806,775, as compared to $843,062 for the three months ended March 31, 2024, representing an increase of $963,713, or 114.3%.

Current wording

As a result of the foregoing, for the three months ended June 30, 2025, loss from operations amounted to $3,887,987, as compared to $1,504,363 for the three months ended June 30, 2024, representing an increase of $2,383,624, or 158.4%. As a result of the foregoing, for the six months ended June 30, 2025, loss from operations amounted to $5,694,762, as compared to $2,347,425 for the six months ended June 30, 2024, representing an increase of $3,347,337, or 142.6%.

Previous wording

Other (expense) income mainly includes third party and related party interest expense, change in fair value of derivative liability, and other miscellaneous expense.

Current wording

Other (expense) income mainly includes third party and related party interest expense, change in fair value of derivative liability, loss on extinguishment of debt, and other miscellaneous income (expense).

Previous wording

Other expense, net, totaled $675,336 for the three months ended March 31, 2025, as compared to $524,451 for the three months ended March 31, 2024, an increase of $150,885, or 28.8%, which was primarily attributable to an increase in third party interest expense of approximately $52,000, mainly driven by the increase in amortization of debt discount and debt issuance costs of approximately $42,000 and the increased interest expense of approximately $10,000 from third party debts, a decrease in gain from change in fair value of derivative liability of approximately $146,000, offset by a decrease in interest expense – related party of approximately $11,000, and a decrease in other expense of approximately $36,000.

Current wording

Other expense, net, totaled $9,570,611 for the three months ended June 30, 2025, as compared to $627,663 for the three months ended June 30, 2024, representing an increase of $8,942,948, or 1,424.8%, which was primarily attributable to an increase in third party interest expense of approximately $260,000, mainly driven by the increase in amortization of debt discount and debt issuance costs of approximately $246,000 and the increased interest expense of approximately $14,000 from third party debts, and an increase in loss on extinguishment of debt of approximately $9,077,000 resulted from the reduction in the conversion price, offset by an increase in gain from change in fair value of derivative liability of approximately $381,000, a decrease in interest expense – related party of approximately $10,000, and a decrease in other expense of approximately $3,000.

Previous wording

We did not have any income taxes expense for the three months ended March 31, 2025 and 2024 since we incurred losses in these periods.

Current wording

We did not have any income taxes expense for the three and six months ended June 30, 2025 and 2024 since we incurred losses in these periods.

Previous wording

As a result of the factors described above, our net loss was $2,482,111 for the three months ended March 31, 2025, as compared to $1,367,513 for the three months ended March 31, 2024, an increase of $1,114,598, or 81.5%.

Current wording

As a result of the factors described above, our net loss was $13,458,598 for the three months ended June 30, 2025, as compared to $2,132,026 for the three months ended June 30, 2024, representing an increase of $11,326,572, or 531.3%.

Previous wording

The net loss attributable to our common shareholders (after taking into effect $162,473 in deemed contribution) was $2,319,638, or $1.43 per share (basic and diluted), for the three months ended March 31, 2025, as compared to $1,367,513, or $1.86 per share (basic and diluted), for the three months ended March 31, 2024, an increase of $952,125, or 69.6%.

Current wording

The net loss attributable to our common shareholders (after taking into effect $162,473 in deemed contribution) was $15,778,236, or $8.33 per share (basic and diluted), for the six months ended June 30, 2025, as compared to $3,499,539, or $4.72 per share (basic and diluted), for the six months ended June 30, 2024, representing an increase of $12,278,697, or 350.9%.

Previous wording

Our reporting currency is the U.S. dollar. The functional currency of our parent company, AHS, Avalon RT 9, Avalon Lab, and Q&A Distribution is the U.S. dollar and the functional currency of Avalon Shanghai is the Chinese Renminbi (“RMB”). The financial statements of our subsidiary whose functional currency is the RMB are translated to U.S. dollars using period end rate of exchange for assets and liabilities, average rate of exchange for revenues, costs, and expenses and cash flows, and at historical exchange rate for equity. Net gains and losses resulting from foreign exchange transactions are included in the results of operations. As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $279 and a foreign currency translation loss of $2,920 for the three months ended March 31, 2025 and 2024, respectively. This non-cash gain/loss had the effect of decreasing/increasing our reported comprehensive loss in each respective period.

Current wording

Our reporting currency is the U.S. dollar. The functional currency of our parent company, AHS, Avalon RT 9, Avalon Lab, and Q&A Distribution is the U.S. dollar and the functional currency of Avalon Shanghai is the Chinese Renminbi (“RMB”). The financial statements of our subsidiary whose functional currency is the RMB are translated to U.S. dollars using period end rate of exchange for assets and liabilities, average rate of exchange for revenues, costs, and expenses and cash flows, and at historical exchange rate for equity. Net gains and losses resulting from foreign exchange transactions are included in the results of operations. As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $104 and $2,706 for the three months ended June 30, 2025 and 2024, respectively. As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $383 and a foreign currency translation loss of $214 for the six months ended June 30, 2025 and 2024, respectively. This non-cash gain/loss had the effect of decreasing/increasing our reported comprehensive loss in each respective period.

Previous wording

As a result of our foreign currency translation adjustment, we had comprehensive loss of $2,481,832 and $1,370,433 for the three months ended March 31, 2025 and 2024, respectively.

Current wording

As a result of our foreign currency translation adjustment, we had comprehensive loss of $13,458,494 and $2,129,320 for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

We have a limited operating history and our continued growth is dependent upon the continuation of generating rental revenue from our income-producing real estate property in New Jersey, generating revenue for selling of Keto Air, as well as obtaining additional financing to fund future obligations and pay liabilities arising from ordinary course business operations. In addition, the current cash balance cannot be projected to cover our operating expenses for the next twelve months from the release date of this report. These matters raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital, implement our business plan, and generate sufficient revenues. There are no assurances that we will be successful in our efforts to generate sufficient revenues, maintain sufficient cash balance or report profitable operations or to continue as a going concern. We plan to raise capital in the future through the sale of equity or debt to implement our business plan. However, there is no assurance these plans will be realized and that any additional financings will be available to us on satisfactory terms and conditions, if at all.

Current wording

We have a limited operating history and our continued growth is dependent upon the continuation of generating rental revenue from our income-producing real estate property in New Jersey, generating revenue for selling of Keto Air, as well as obtaining additional financing to fund future obligations and pay liabilities arising from ordinary course business operations. In addition, the current cash balance cannot be projected to cover our operating expenses for the next twelve months from the release date of this report. These matters raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital, implement our business plan, and generate sufficient revenues. There are no assurances that we will be successful in our efforts to generate sufficient revenues, maintain sufficient cash balance or report profitable operations or to continue as a going concern. We plan to raise capital in the future through the sale of equity or debt to implement our business plan. However, there is no assurance these plans will be realized and thatany additional financings will be available to us on satisfactory terms and conditions, if at all.

Previous wording

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations as they come due and otherwise operate on an ongoing basis. At March 31, 2025 and December 31, 2024, we had a cash balance of approximately $1,370,000 and $2,856,000, respectively. These funds are kept in financial institutions located as follows:

Current wording

Liquidity is the abilityof a company to generate funds to support its current and future operations, satisfy its obligations as they come due and otherwise operate on an ongoing basis. At June 30, 2025 and December 31, 2024, we had a cash balance of approximately $202,000 and $2,856,000, respectively. These funds are kept in financial institutions located as follows:

Previous wording

Our working capital deficit increased by $1,009,038 to $11,655,095 at March 31, 2025 from $10,646,057 at December 31, 2024. The increase in working capital deficit was primarily attributable to a decrease in cash of approximately $1,487,000, an increase in accrued professional fees of approximately $373,000 which was mainly attributable to the increase in professional services related to our potential merger with YOOV, an increase in advance from pending sale of noncontrolling interest – related party of approximately $220,000 resulting from advance received in connection with the membership interest purchase agreement entered into in November 2023 in three months ended March 31, 2025, and an increase in convertible note payable, net, of approximately $284,000 driven by the amortization of debt discount and debt issuance costs of approximately $284,000 in the three months ended March 31, 2025, offset by an increase in current portion of receivable from sale of equity method investment of $975,000 resulting from execution of the Redemption Agreement signed on February 26, 2025 as described elsewhere in this report, and a decrease in accrued liabilities and other payables – related parties of approximately $633,000 which was extinguished upon our sale of equity method investment in the first quarter of 2025.

Current wording

Our working capital deficit increased by $3,486,262 to $14,132,319 at June 30, 2025 from $10,646,057 at December 31, 2024. The increase in working capital deficit was primarily attributable to a decrease in cash of approximately $2,655,000, an increase in accrued professional fees of approximately $972,000 which was mainly attributable to the increase in professional services related to our potential merger with YOOV, an increase in accrued payroll liability and compensation of approximately $232,000, an increase in advance from pending sale of noncontrolling interest – related party of approximately $150,000 resulting from advance received in connection with the membership interest purchase agreement entered into in November 2023 in six months ended June 30, 2025, an increase in stock subscription liability of $150,000 resulting from the securities purchase agreement signed in June 2025, and an increase in convertible note payable, net, of approximately $323,000 driven by the amortization of debt discount and debt issuance costs of approximately $443,000 in the six months ended June 30, 2025 which was offset by the conversion of principal of approximately $120,000 into our common stock in the six months ended June 30, 2025, offset by an increase in prepaid expense and other current assets of approximately $347,000 mainly due to the increase in prepaid professional fees of approximately $271,000 and the increase in deferred offering costs of approximately $85,000, a decrease in accrued liabilities and other payables of approximately $128,000 driven by payments made to our vendors in the six months ended June 30, 2025, and a decrease in accrued liabilities and other payables – related parties of approximately $633,000 which was extinguished upon our sale of equity method investment in the first quarter of 2025.

Previous wording

Because the exchange rate conversion is different for the condensed consolidated balance sheets and the condensed consolidated statements of cash flows, the changes in assets and liabilities reflectedon the condensed consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the condensed consolidated balance sheets.

Current wording

Because the exchange rate conversion is different for the condensed consolidated balance sheets and the condensed consolidated statements of cash flows, the changes in assets and liabilities reflected on the condensed consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the condensed consolidated balance sheets.

Previous wording

Cash Flows for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Current wording

Cash Flows for the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

Previous wording

The following summarizes the key components of our cash flows for the three months ended March 31, 2025 and 2024:

Current wording

The following summarizes thekey components of our cash flows for the six months ended June 30, 2025 and 2024:

Previous wording

Net cash flow used in operating activities for the three months ended March 31, 2025 was $1,801,926, which primarily reflected our consolidated net loss of approximately $2,482,000, and the non-cash item adjustments, primarily consisting of income from equity method investment of approximately $393,000, offset by amortization of debt issuance costs and debt discount of approximately $314,000, and change in fair market value of derivative liability of approximately $114,000, and the changes in operating assets and liabilities, primarily consisting of an increase in accrued liabilities and other payables of approximately $556,000, mainly due to the increase in services related to our potential merger with YOOV in the three months ended March 31, 2025.

Current wording

Net cash flow used in operating activities for the six months ended June 30, 2025 was $3,027,822, which primarily reflected our consolidated net loss of approximately $15,941,000, and the non-cash item adjustments, primarily consisting of income from equity method investment of approximately $393,000, and change in fair market value of derivative liability of approximately $447,000, and the changes in operating assets and liabilities, primarily consisting ofan increase in prepaid expense and other assets of approximately $255,000 which wasmainly due to the increase in prepaid professional fees of approximately $237,000, offset by an increase in accrued liabilities and other payables of approximately $1,221,000 which was mainly driven by the increase in professional services related to our potential merger with YOOV in the six months ended June 30, 2025, and the non-cash item adjustments, primarily consisting of credit loss provision of $1,650,000 due to the increase in allowance for credit loss related to our receivable from sale of equity method investment in the second quarter of 2025 as discussed in elsewhere in this report, stock-based compensation and service expense of approximately $762,000, amortization of debt issuance costs and debt discount of approximately $1,124,000, and loss on extinguishment of debt of approximately $9,077,000 resulted from the reduction in the conversion price.

Previous wording

Net cash flow used in operating activities for the three months ended March 31, 2024 was $915,709, which primarily reflected our consolidated net loss of approximately $1,368,000, and the non-cash items adjustment, primarily consisting of income from equity method investment of approximately $107,000, offset by distribution of earnings from equity method investment of approximately $161,000, and amortization of debt issuance costs and debt discount of approximately $272,000, and the changes in operating assets and liabilities, primarily consisting of a decrease in rent receivable of approximately $113,000 driven by our collection efforts.

Current wording

Net cash flow used in operating activities for the six months ended June 30, 2024 was $1,997,616, which primarily reflected our consolidated net loss of approximately $3,500,000, and the non-cash items adjustment, primarily consisting of change in fair market value of derivative liability of approximately $212,000, and the changes in operating assets and liabilities, primarily consisting of a decrease in accrued liabilities and other payables of approximately $151,000 resulting from payments made to our vendors in the first half of 2024, offset by a decrease in rent receivable of approximately $113,000 driven by our collection efforts, and the non-cash items adjustment, primarily consisting of stock-based compensation and service expense of approximately $150,000, loss from equity method investment of approximately $222,000, distribution of earnings from equity method investment of approximately $473,000, and amortization of debt issuance costs anddebt discount of approximately $837,000.

Previous wording

Net cash flow provided by investing activities was $95,000 for the three months ended March 31, 2025, as compared to $0 for the three months ended March 31, 2024. During the three months ended March 31, 2025, we received proceeds from sale of equity method investment of $95,000. There was no investing activity during the three months ended March 31, 2024.

Current wording

Net cash flow provided by investing activities was $95,000 for the six months ended June 30, 2025, as compared to net cash flow used in investing activities of $100,000 for the six months ended June 30, 2024. During the six months ended June 30, 2025, we received proceeds from sale of equity method investment of $95,000. During the six months ended June 30, 2024, we paid $100,000 for the acquisition of a 40% interest in Lab Services MSO.

Previous wording

Net cash flow provided by financing activities was $219,972 for the three months ended March 31, 2025, as compared to $936,772 for the three months ended March 31, 2024. During the three months ended March 31, 2025, we received advance from sale of noncontrolling interest in subsidiary of approximately $220,000. During the three months ended March 31, 2024, we received net proceeds from issuance of convertible debt and warrants of approximately $592,000 (net of original issue discount of $35,000 and cash paid for convertible note issuance costs of approximately $73,000), and advance from sale of noncontrolling interest in subsidiary of approximately $1,210,000, offset by repayments made for convertible debt of $866,000.

Current wording

Net cash flow provided by financing activities was $277,636 for the six months ended June 30, 2025, as compared to $2,010,577 for the six months ended June 30, 2024. During the six months ended June 30, 2025, we received proceeds from stock subscription of $150,000 and received advance from sale of noncontrolling interest in subsidiary of approximately $150,000, offset by payments made for offering costs of approximately $22,000. During the six months ended June 30, 2024, we received net proceeds from the issuance of convertible debts and warrants of approximately $3,110,000 (net of original issue discount of approximately $177,000 and cash paid for convertible note issuance costs of approximately $258,000), and an advance from the pending sale of a noncontrolling interest in a subsidiary of approximately $2,001,000, offset by repayments made for convertible debt of $3,100,000.

Previous wording

We ceased all operationsin China in 2022, with the exception of a small administrative office. We did not during the three months ended March 31, 2025, and do not expect in the foreseeable future, to generate any additional revenue from PRC operations. Thus, exchange rate fluctuations between the RMB and the U.S. dollar do not, and are not expected to, have a material effect on us. For the three months ended March 31, 2025 and 2024, we had an unrealized foreign currency translation gain of approximately $300 and an unrealized foreign currency translation loss of approximately $3,000, respectively, because of changes in the exchange rate.

Current wording

We ceased all operations in China in 2022, with the exception of a small administrative office. We did not during the three and six months ended June 30, 2025, and do not expect in the foreseeable future, to generate any additional revenue from PRC operations. Thus, exchange rate fluctuations between the RMB and the U.S. dollar do not, and are not expected to, have a material effect on us. For the three months ended June 30, 2025 and 2024, we had an unrealized foreign currency translation gain of approximately $100 and $2,700, respectively, because of changes in the exchange rate. For the six months ended June 30, 2025 and 2024, we had an unrealized foreign currency translation gain of approximately $400 and an unrealized foreign currency translation loss of approximately $200, respectively, because of changes in the exchange rate.

Previous wording

The effect of inflation on our revenues andoperating results was not significant for the three months ended March 31, 2025 and 2024.

Current wording

The effect of inflation on our revenues and operating results was not significant for the three and six months ended June 30, 2025 and 2024.