What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-13 compared with 2025-04-30 · 558 added, 457 removed, 761 unchanged (57% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Information

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with ABVC BioPharma, Inc.

and its subsidiaries (“we”, “us”, “our”, or the “Company”) condensed

unaudited financial statements and the notes thereto contained elsewhere in this report.

and its subsidiaries (“we”, “us”, “our”, or the “Company”)

condensed unaudited financial statements and the notes thereto contained elsewhere in this report.

Information in this Item 2, “Management’s

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Factors that cause

actual results or conditions to differ from those anticipated by these and other forward-looking statements include those more fully described

elsewhere in this report and in the “Risk Factors” section of our annual report on form 10-K.

actual results or conditions to differ from those anticipated by these and other forward-looking statements include those more fully

described elsewhere in this report and in the “Risk Factors” section of our annual report on form 10-K.

The Company disclaims any obligation to update

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This subsidiary has no activities since inception.

On May 10, 2025, ABVC transferred its 100%

ownership in BioKey to BioKey Cayman.

This reorganization did not have other impact to the consolidated financial statements.

Medicines derived from plants have a long history

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to identify drugs that it believes demonstrate efficacy and safety based on the Company’s internal qualifications.

Once a drug is

shown to be a good candidate for further development and ultimately commercialization, BriVision licenses the drug or medical device from

the original researchers and begins to introduce the drugs clinical plan to highly respected principal investigators in the United States,

Australia and Taiwan.

In almost all cases, we have found that research institutions in each of those countries are eager to work with

the Company to move forward with Phase II clinical trials.

Institutions that have or are now conducting phase

II clinical trials in partnership with ABVC include:

is shown to be a good candidate for further development and ultimately commercialization, BriVision licenses the drug or medical device

from the original researchers and begins to introduce the drugs clinical plan to highly respected principal investigators in the United

States, Australia and Taiwan.

In almost all cases, we have found that research institutions in each of those countries are eager to work

with the Company to move forward with Phase II clinical trials.

Institutions that have or are now conducting

phase II clinical trials in partnership with ABVC include:

ABV-1504, Major Depressive Disorder (MDD), Phase II completed.

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Charles DeBattista M.D.

Schatzberg, MD, Stanford University Medical Center, Cheng-Ta Li, MD, Ph.D - Taipei Veterans General Hospital

Schatzberg, MD, Stanford University Medical Center, Cheng-Ta

Li, MD, Ph.D - Taipei Veterans General Hospital

ABV-1505, Adult Attention-Deficit Hyperactivity Disorder (ADHD), Phase II Part 1 completed.

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Keith McBurnett, Ph.D.

and Linda Pfiffner, Ph.D., University of California San Francisco (UCSF), School of Medicine.

Phase II, Part 2 clinical study sites include UCSF and 5 locations in Taiwan.

The Principal Investigators are Keith McBurnett, Ph.D.

and Linda Pfiffner, Ph.D., University of California San Francisco (UCSF), School of Medicine;

and Linda Pfiffner, Ph.D., University of

California San Francisco (UCSF), School of Medicine.

Phase II, Part 2 clinical study sites

include UCSF and 5 locations in Taiwan.

The Principal Investigators are Keith McBurnett,

and Linda Pfiffner, Ph.D., University of California San Francisco (UCSF), School of

Susan Shur-Fen Gau, M.D., National Taiwan University Hospital;

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Ton-Ping Su, M.D., Cheng Hsin General Hospital;

Cheng-Ta Li, M.D., Taipei Veterans General Hospital.

Cheng-Ta Li, M.D., Taipei Veterans General

Phase II, Part 2 began in the 1st quarter of 2022 at the 5 Taiwan sites.

The UCSF site joined the study in the 2nd quarter of 2023.

The subjects enrolled in the study has reached the number for interim analysis in December 2023, and the interim analysis of the study is in progress.

site joined the study in the 2nd quarter of 2023.

The subjects enrolled in the study has

reached the number for interim analysis in December 2023, and the interim analysis of the

study is in progress.

ABV-1601, Major Depression in Cancer Patients, Phase I/II, NCE drug Principal Investigator:

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- Cedars Sinai Medical Center (CSMC).

The Phase I clinical study will be initiated around the end of 2025.

Medical Device:

ABV-1701, Vitargus® in vitrectomy surgery, Phase II Study has been initiated in Australia and Thailand, Principal Investigator:

Duangnate Rojanaporn, M.D., Ramathibodi Hospital;

The Phase I clinical study will

be initiated around the end of 2025.

ABV-1701, Vitargus® in vitrectomy surgery, Phase II Study has been initiated

in Australia and Thailand, Principal Investigator:

Duangnate Rojanaporn, M.D., Ramathibodi

Thuss Sanguansak, M.D., Srinagarind Hospital of the two Thailand Sites and Professor/Dr.

Matthew Simunovic, Sydney Eye Hospital;

Elvis Ojaimi, East Melbourne Eye Group & East Melbourne Retina.

The Phase II study started in the 2nd quarter of 2023, and the company is working on improvements to the Vitargus Product through the new batch of investigational product.

Elvis Ojaimi, East Melbourne Eye Group &

East Melbourne Retina.

The Phase II study started in the 2nd quarter of 2023, and the company

is working on improvements to the Vitargus Product through the new batch of investigational

The following trials are expected to begin in

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device upon approval by the US FDA, Taiwan TFDA and other country regulatory authorities.

Another part of the Company’s business is

conducted by BioKey, a wholly-owned subsidiary, that is engaged in a wide range of services, including, API characterization, pre-formulation

studies, formulation development, analytical method development, stability studies, IND/NDA/ANDA/510K submissions, and manufacturing clinical

trial materials (phase I through phase III) and commercial manufacturing.

Another part of the Company’s business

is conducted by BioKey, a wholly-owned subsidiary, that is engaged in a wide range of services, including, API characterization, pre-formulation

studies, formulation development, analytical method development, stability studies, IND/NDA/ANDA/510K submissions, and manufacturing

clinical trial materials (phase I through phase III) and commercial manufacturing.

The Vitargus ® Phase II study was

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By comparing the Thailand study with the First-in-Human (FIH) study completed in Australia

in 2018, the SAEs derived from the patients in the Thailand study may be due to the modified in-situ hydrogel procedure which allows

a longer surgical time window for the study.

The Company is investigating the root causes of the events and is working towards developing

a safe device in-situ procedure before reinstating the study.

in 2018, the SAEs derived from the patients in the Thailand study may be due to the modified in-situ hydrogel procedure which

allows a longer surgical time window for the study.

The Company is investigating the root causes of the events and is working towards

developing a safe device in-situ procedure before reinstating the study.

On March 5, 2025, Leeds Chow notified the Company

of his resignation as CFO.

While the Company is looking for a full-time Chief Financial Officer to fill the vacancy created by Leeds Chow’s

resignation, the Company’s CEO, Uttam Patil will serve as the interim Chief Financial Officer of the Company.

While the Company is looking for a full-time Chief Financial Officer to fill the vacancy created by Leeds

Chow’s resignation, the Company’s CEO, Uttam Patil will serve as the interim Chief Financial Officer of the Company.

On February 6, 2024, the Company entered into

a definitive agreement with Shuling Jiang (“Shuling”), pursuant to which Shuling shall transfer the ownership of certain land

she owns located at Taoyuan City, Taiwan (the “Land”) to the Company (the “Agreement”).

a definitive agreement with Shuling Jiang (“Shuling”), pursuant to which Shuling shall transfer the ownership of certain

land she owns located at Taoyuan City, Taiwan (the “Land”) to the Company (the “Agreement”).

Shuling is a director

of the Company, is married to TS Jiang, the Company’s Chief Strategic Officer and owns approximately 15.4% of the Company’s

issued and outstanding shares of common stock.

In consideration for the Land, the Company was to pay Shuling (i) 703,496 restricted shares

of the Company’s common stock (the “Shares”) at a price of $3.50 per share and (ii) five-year warrants to purchase up

to 1,000,000 shares of the Company’s common stock, with an exercise price of $2.00 per share.

Under the Agreement, Shuling was to

also transfer outstanding liability owed on the Land (approximately $500,000) to the Company.

On May 16, 2024, the Company’s board

of directors determined that it was in the best interest of the Company and its shareholders to terminate the Agreement and not proceed

with the transfer of land ownership;

the Company may reconsider the transaction at a later date.

The shares were returned and the warrants

were not issued.

of the Company, and owns approximately 15.4% of the Company’s issued and outstanding shares of common stock as of February 6, 2024.

In consideration for the Land, the Company was to pay Shuling (i) 703,496 restricted shares of the Company’s common stock (the

“Shares”) at a price of $3.50 per share and (ii) five-year warrants to purchase up to 1,000,000 shares of the Company’s

common stock, with an exercise price of $2.00 per share.

Under the Agreement, Shuling was to also transfer outstanding liability owed

on the Land (approximately $500,000) to the Company.

On May 16, 2024, the Company’s board of directors determined that it was in

the best interest of the Company and its shareholders to terminate the Agreement and not proceed with the transfer of land ownership.

The shares were returned and the warrants were not issued.

On July 15, 2025, the Company entered into a

definitive agreement with Shuling Jiang (“Shuling”), pursuant to which Shuling shall transfer the ownership of certain land

she owns, with estimated fair value of $3,857,975, located at Taoyuan City, Taiwan (the “Land”) to the Company (the “Agreement”).

Shuling is a director of the Company, and owns approximately 10.31% of the Company’s issued and outstanding shares of common stock

as of June 3, 2025.

In consideration for the Land, the Company was to pay Shuling (i) 2,035,136 restricted shares of the Company’s

common stock (the “Shares”) at a price of $1.65 per share as approved in the June 3, 2025 annual shareholder meeting and

(ii) five-year warrants to purchase up to 1,000,000 shares of the Company’s common stock, with an exercise price of $2.50 per share.

Under the Agreement, Shuling was to also transfer outstanding liability owed on the Land (approximately $500,000) to the Company.

transaction is closed on the same date and restricted shares are issued on July 16, 2025.

In connection with the Land transaction, on July

15, 2025, the Company entered into a one-year consulting agreement with Shuling, pursuant to which Shuling shall provide advisory and

development support services related to the Land.

Such services include but not limited to site supervision and care, liaison with local

authorities regarding land zoning and permits, acting as the Company’s agent to the Land, and other Land development related matters.

The Company shall issue 1,000,000 restricted shares of the Company’s common stock, subject to a 5-year vesting schedule of 200,000

shares per year.

On March 25, 2024, the Company, and one of its

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Additionally, each of the Company and BioFirst are eligible to receive royalties of 5% of net Sales.

As of March 31,

2025, the Company has received 5,000,000 FEYE shares but did not recognize such licensing revenue since the fair value of FEYE stock is

As of June 30,

2025, the Company has received 5,000,000 FEYE shares but did not recognize such licensing revenue since the fair value of

FEYE stock is uncertain.

On June 18, 2024, the Company and BioFirst, each

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(such as $100,000), at any given time, rather than in one lump sum.

As of March 31, 2025, the Company has received $296,000 as the partial

second milestone payment and recognized as licensing revenue according to ASC 606.

On April 16, 2024, the Company entered into a definitive

agreement with OncoX BioPharma, Inc., a private company registered in the British Virgin Islands (“Oncox”), pursuant to which

the Company will grant Oncox an exclusive right to develop and commercialize ABVC’s single-herb botanical drug extract from the

dry fruit body of Maitake Mushroom (Grifola Frondosa) for treatment of Non-Small Cell Lung Cancer (the “Licensed Products”),

As of June 30, 2025, the Company has received $296,000 as

the partial second milestone payment and recognized as licensing revenue according to ASC 606.

On April 16, 2024, the Company entered into a

definitive agreement with OncoX BioPharma, Inc., a private company registered in the British Virgin Islands (“Oncox”), pursuant

to which the Company will grant Oncox an exclusive right to develop and commercialize ABVC’s single-herb botanical drug extract

from the dry fruit body of Maitake Mushroom (Grifola Frondosa) for treatment of Non-Small Cell Lung Cancer (the “Licensed Products”),

within North America for 20 years (the “Oncox Agreement”).

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1,250,000 Oncox shares valued at $5 per share;

p rice was determined through private negotiations between the

no third-party valuation was completed.

) 30 days after entering into the Oncox Agreement and $625,000 30 days following

the completion of Oncox’s next round of fundraising, of which there is no guarantee;

ABVC is also entitled to 5% royalties based

on the Net Sales, as defined in the Oncox Agreement, from the first commercial sale of the Licensed Product in North America, of which

there can be no guarantee.

Oncox entered into another agreement with ABVC’s affiliate, Rgene Corporation, on the same terms.

of March 31, 2025, the Company has received $200,000 as the partial second milestone payment and recognized as licensing revenue according

On May 8, 2024, the Company entered into a definitive agreement with OncoX

BioPharma, Inc., a private company registered in the British Virgin Islands (“Oncox”), pursuant to which the Company will

grant Oncox an exclusive right to develop and commercialize ABVC’s BLEX 404 single-herb botanical drug extract from the dry fruit

body of Maitake Mushroom (Grifola Frondosa) for treatment of Pancreatic Cancer (the “Licensed Products”), within a certain

territory, specified as 50% of the Worldwide Markets for 20 years (the “May 2024 Oncox Agreement”).

In consideration thereof,

Oncox shall pay ABVC a total of $6,250,000 (or 1,250,000 Oncox shares valued at $5 per share;

was determined through private negotiations between the parties;

no third-party valuation was completed.

) within 30 days of entering

into the May 2024 Oncox Agreement, with an additional milestone payment of $625,000 in cash after OncoX’s next round of fundraising,

of which there can be no guarantee.

Oncox may remit cash payments of at least $100,000 towards the licensing fees and deductible from

the second milestone payment;

ABVC is also entitled to royalties of 5% of Net Sales, as defined in the May 2024 Oncox Agreement, from

the first commercial sale of the Licensed Product in the noted territory, which remains uncertain.

The Company will permit Oncox to pay

the license fee in installments or in a lump sum and will allow Oncox to use its revenue to fund such payments.

Oncox entered into another

agreement with ABVC’s affiliate, Rgene Corporation, on the same terms.

On May 14, 2024, the Company and its subsidiary, BioLite Inc (collectively,

the “licensor”), each entered into a licensing agreement with OncoX, on the same terms, pursuant to which the licensors will

grant Oncox an exclusive right to develop and commercialize ABVC’s BLEX 404 single-herb botanical drug extract from the dry fruit

body of Maitake Mushroom (Grifola Frondosa) for treatment of Tripple Negative Breast Cancer (the TNBC Product), within a certain territory,

specified as 50% of the Worldwide Markets for 20 years (the “May 14, 2024 Oncox Agreements”).

In each agreement for consideration

thereof, Oncox shall pay each licensor a total of $6,250,000 (or 1,250,000 Oncox shares valued at $5 per share;

was determined through private negotiations between the parties;

price was determined through private negotiations between the parties;

no third-party

valuation was completed.) 30 days after entering into the Oncox Agreement and $625,000 30 days following the completion of Oncox’s

next round of fundraising, of which there is no guarantee;

ABVC is also entitled to 5% royalties based on the Net Sales, as defined in

the Oncox Agreement, from the first commercial sale of the Licensed Product in North America, of which there can be no guarantee.

entered into another agreement with ABVC’s affiliate, Rgene Corporation, on the same terms.

As of June 30, 2025, the Company has

received $200,000 as the partial second milestone payment and recognized as licensing revenue according to ASC 606.

On May 8, 2024, the Company entered into a definitive agreement with

OncoX BioPharma, Inc., a private company registered in the British Virgin Islands (“Oncox”), pursuant to which the Company

will grant Oncox an exclusive right to develop and commercialize ABVC’s BLEX 404 single-herb botanical drug extract from the dry

fruit body of Maitake Mushroom (Grifola Frondosa) for treatment of Pancreatic Cancer (the “Licensed Products”), within a

certain territory, specified as 50% of the Worldwide Markets for 20 years (the “May 2024 Oncox Agreement”).

In consideration

thereof, Oncox shall pay ABVC a total of $6,250,000 (or 1,250,000 Oncox shares valued at $5 per share;

price was determined through private

negotiations between the parties;

no third-party valuation was completed.

) within 30 days of entering

into the May 14, 2024 Oncox Agreements, with an additional milestone payment of $625,000 in cash after OncoX’s next round of fundraising,

of which there can be no guarantee.

Oncox may remit cash payments of at least $100,000 towards the licensing fees and deductible from

the second milestone payment;

each licensor is also entitled to royalties of 5% of Net Sales, from the first commercial sale of the TNBC

) within 30 days of entering into the May 2024 Oncox Agreement,

with an additional milestone payment of $625,000 in cash after OncoX’s next round of fundraising, of which there can be no guarantee.

Oncox may remit cash payments of at least $100,000 towards the licensing fees and deductible from the second milestone payment;

is also entitled to royalties of 5% of Net Sales, as defined in the May 2024 Oncox Agreement, from the first commercial sale of the Licensed

Product in the noted territory, which remains uncertain.

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lump sum and will allow Oncox to use its revenue to fund such payments.

On May 23, 2024, the Company and its subsidiary, BioLite Inc (collectively,

the “licensor”), each entered into a licensing agreement with OncoX, on the same terms, pursuant to which the licensors will

grant Oncox an exclusive right to develop and commercialize ABVC’s BLEX 404 single-herb botanical drug extract from the dry fruit

body of Maitake Mushroom (Grifola Frondosa) for treatment of Myelodysplastic Syndrome (the “Licensed Products”), within a

certain territory, specified as 50% of the Worldwide Markets for 20 years (the “Oncox Agreements”).

In consideration thereof,

Oncox shall pay each licensor a total of $6,250,000 (or 1,250,000 Oncox shares valued at $5 per share;

Oncox entered into another agreement with ABVC’s affiliate,

Rgene Corporation, on the same terms.

On May 14, 2024, the Company and its subsidiary,

BioLite Inc (collectively, the “licensor”), each entered into a licensing agreement with OncoX, on the same terms, pursuant

to which the licensors will grant Oncox an exclusive right to develop and commercialize ABVC’s BLEX 404 single-herb botanical drug

extract from the dry fruit body of Maitake Mushroom (Grifola Frondosa) for treatment of Tripple Negative Breast Cancer (the TNBC Product),

within a certain territory, specified as 50% of the Worldwide Markets for 20 years (the “May 14, 2024 Oncox Agreements”).

In each agreement for consideration thereof, Oncox shall pay each licensor a total of $6,250,000 (or 1,250,000 Oncox shares valued at

$5 per share;

price was determined through private negotiations between the parties;

no third-party valuation was completed.) within

30 days of entering into the May 14, 2024 Oncox Agreements, with an additional milestone payment of $625,000 in cash after OncoX’s

next round of fundraising, of which there can be no guarantee.

Oncox may remit cash payments of at least $100,000 towards the licensing

fees and deductible from the second milestone payment;

each licensor is also entitled to royalties of 5% of Net Sales, from the first

commercial sale of the TNBC Product in the noted territory, which remains uncertain.

The Company will permit Oncox to pay the license

fee in installments or in a lump sum and will allow Oncox to use its revenue to fund such payments.

On May 23, 2024, the Company and its subsidiary,

BioLite Inc (collectively, the “licensor”), each entered into a licensing agreement with OncoX, on the same terms, pursuant

to which the licensors will grant Oncox an exclusive right to develop and commercialize ABVC’s BLEX 404 single-herb botanical drug

extract from the dry fruit body of Maitake Mushroom (Grifola Frondosa) for treatment of Myelodysplastic Syndrome (the “Licensed

Products”), within a certain territory, specified as 50% of the Worldwide Markets for 20 years (the “Oncox Agreements”).

In consideration thereof, Oncox shall pay each licensor a total of $6,250,000 (or 1,250,000 Oncox shares valued at $5 per share;

was determined through private negotiations between the parties;

no third-party valuation was completed.

) 30 days after entering

the May 23, 2024 Oncox Agreement, with an additional milestone payment of $625,000 in cash after OncoX’s next round of fundraising,

no third-party valuation was completed.) 30 days after entering the

May 23, 2024 Oncox Agreement, with an additional milestone payment of $625,000 in cash after OncoX’s next round of fundraising,

of which there can be no guarantee.

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On July 25, 2023, the Company filed a Certificate

of Amendment to its Articles of Incorporation authorizing a 1-for-10 reverse stock split of the issued and outstanding shares of its common

stock (the “2023 Split”).

of Amendment to its Articles of Incorporation authorizing a 1-for-10 reverse stock split of the issued and outstanding shares of its

common stock (the “2023 Split”).

The Company’s stockholders previously approved the Reverse Stock Split at the Company’s

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Series A Convertible Preferred Stock

As of March 31, 2025, no Series A Convertible

As of June 30, 2025, no Series A Convertible

Preferred Stock has been issued by the Company.

NASDAQ Listing

On May 24, 2023, we received a deficiency letter

from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying

the Company that it is not currently in compliance with the minimum stockholders’ equity requirement, or the alternatives of market

value of listed securities or net income from continuing operations, for continued listing on the Nasdaq Capital Market.

Nasdaq Listing

Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2,500,000, and the Company’s stockholders’

equity was $1,734,507 as of March 31, 2023.

In accordance with Nasdaq rules, the Company had 45 calendar days, or until July 10, 2023,

to submit a plan to regain compliance.

After submitting a plan to regain compliance, on July 10, 2023, Nasdaq granted the Company an extension

until August 30, 20203, to comply with Listing Rule 5550(b)(1).

On July 31, 2023, the Company issued 300,000 shares of Common Stock and

200,000 pre-funded warrants, at an exercise price of $0.01 per share, in a registered direct offering.

Pursuant to this transaction, the

stockholders’ equity was increased by $1.75M.

On August 1, 2023, $500,000 of Notes were converted at $3.50 per share and the holder

received 142,857 shares of Common Stock.

As a result of this conversion, the stockholders’ equity was increased by $0.5 million.

Additionally, on August 14, 2023, the Company entered into a cooperation agreement with Zhonghui United Technology (Chengdu) Group Co.,

Ltd., pursuant to which the Company acquired a 20% ownership of certain property and a parcel of the land owned by Zhonghui in exchange

for an aggregate of 370,000 shares of Common Stock.

On May 24, 2023, we received a deficiency

letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”)

notifying the Company that it is not currently in compliance with the minimum stockholders’ equity requirement, or the alternatives

of market value of listed securities or net income from continuing operations, for continued listing on the Nasdaq Capital Market.

Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2,500,000, and the Company’s

stockholders’ equity was $1,734,507 as of March 31, 2023.

In accordance with Nasdaq rules, the Company had 45 calendar days, or

until July 10, 2023, to submit a plan to regain compliance.

After submitting a plan to regain compliance, on July 10, 2023, Nasdaq granted

the Company an extension until August 30, 20203, to comply with Listing Rule 5550(b)(1).

On July 31, 2023, the Company issued 300,000

shares of Common Stock and 200,000 pre-funded warrants, at an exercise price of $0.01 per share, in a registered direct offering.

to this transaction, the stockholders’ equity was increased by $1.75M.

On August 1, 2023, $500,000 of Notes were converted at $3.50

per share and the holder received 142,857 shares of Common Stock.

As a result of this conversion, the stockholders’ equity was

increased by $0.5 million.

Additionally, on August 14, 2023, the Company entered into a cooperation agreement with Zhonghui United Technology

(Chengdu) Group Co., Ltd., pursuant to which the Company acquired a 20% ownership of certain property and a parcel of the land owned

by Zhonghui in exchange for an aggregate of 370,000 shares of Common Stock.

Accordingly, stockholders’ equity increased by $7.4M.

On February 23, 2023,

the Company entered into a securities purchase agreement with Lind, pursuant to which the Company issued Lind a secured, convertible note

in the principal amount of $3,704,167 (the “Lind Offering”), for a purchase price of $3,175,000 (the “Lind Note”),

that is convertible into shares of Common Stock at an initial conversion price of $1.05 per share, subject to adjustment.

On August 24,

2023, the Company started repaying Lind the monthly installments due under the Lind Notes;

$308,000 was repaid via the issuance of 176,678

shares of Common Stock (the “Monthly Shares”) at the Redemption Share Price (as defined in the Lind Note) of $1.698 per share.

Pursuant to the terms of the Lind Note, Lind increased the amount of the next monthly payment to one million dollars, such that as of

September and together with the Monthly Shares, the Company repaid Lind a total of $1 million by September 2023.

As a result, the stockholders’

equity increased by an additional $1 million.

As a result of the four transactions referenced above, the Company’ estimated that

its stockholders’ equity would increase by approximately $10.65 million.

On September 6, 2023, Nasdaq issued a letter that the Company

is in compliance with Rule 5550(b)(1), but noted that if at the time of the Company’s next periodic report the Company does not

evidence compliance, it may be subject to delisting.

On July 10, 2024, we received a notification letter

from the Nasdaq notifying the Company that the minimum bid price per share for its common shares has been below $1.00 for a period of

30 consecutive business days and the Company therefore no longer meets the minimum bid price requirements set forth in Nasdaq Listing

On February 23, 2023, the Company entered into a securities purchase agreement with Lind, pursuant to which the Company issued Lind a

secured, convertible note in the principal amount of $3,704,167 (the “Lind Offering”), for a purchase price of $3,175,000

(the “Lind Note”), that is convertible into shares of Common Stock at an initial conversion price of $1.05 per share, subject

to adjustment.

On August 24, 2023, the Company started repaying Lind the monthly installments due under the Lind Notes;

repaid via the issuance of 176,678 shares of Common Stock (the “Monthly Shares”) at the Redemption Share Price (as defined

in the Lind Note) of $1.698 per share.

Pursuant to the terms of the Lind Note, Lind increased the amount of the next monthly payment

to one million dollars, such that as of September and together with the Monthly Shares, the Company repaid Lind a total of $1 million

by September 2023.

As a result, the stockholders’ equity increased by an additional $1 million.

As a result of the four transactions

referenced above, the Company’ estimated that its stockholders’ equity would increase by approximately $10.65 million.

September 6, 2023, Nasdaq issued a letter that the Company is in compliance with Rule 5550(b)(1), but noted that if at the time of the

Company’s next periodic report the Company does not evidence compliance, it may be subject to delisting.

On July 10, 2024, we received a notification

letter from the Nasdaq notifying the Company that the minimum bid price per share for its common shares has been below $1.00 for a period

of 30 consecutive business days and the Company therefore no longer meets the minimum bid price requirements set forth in Nasdaq Listing

Rule 5550(a)(2).

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procedures, which the Company would have the right to appeal.

April 24, 2025, we received a letter from the listing qualifications staff (the “ Staff ”) of Nasdaq informing us that,

as reported in our Annual Report on Form 10-K for the year ended December 31, 2024, because our stockholders’ equity was

$723,959, as of April 23, 2025, we did not meet the alternatives of market value of listed securities or net income from continuing operations,

and we no longer comply with Listing Rule 5550(b)(1) (the “ Rule 5550 ”).

have 45 calendar days to submit a plan to the Staff to regain compliance.

If our plan is accepted, we may be granted an extension of up

to 180 calendar days from the date of the letter, or until October 21, 2025, to evidence compliance.

determining whether to accept our plan, the Staff will consider such things as the likelihood that the plan will result in compliance

with Nasdaq’s continued listing criteria, our past compliance history, the reasons for our current non-compliance, other corporate

events that may occur within our review period, our overall financial condition, and our public disclosures.

If the Staff does not accept

our plan, we will have the opportunity to appeal that decision to a Hearings Panel.

The Nasdaq notification has

no immediate effect on the listing of our Common Stock on the Nasdaq Capital Market.

We intend to actively monitor our stockholders’

equity and will consider options available to us to achieve compliance with Rule 5550.

There can be no assurance that we will

be able to regain compliance with the Listing Rule or will otherwise be in compliance with the other listing standards for the Nasdaq

Capital Market.

If our Common Stock ultimately

were to be delisted for any reason, it could negatively impact us by (i) reducing the liquidity and market price of our Common Stock;

(ii) reducing the number of investors willing to hold or acquire our Common Stock;

(ii) limiting our ability to use a registration statement

to offer and sell freely tradable securities, thereby preventing us from accessing the public capital markets;

and (iv) impairing our

ability to provide equity incentives to our employees.

On April 24, 2025, we received a letter from

the listing qualifications staff (the “ Staff ”) of Nasdaq informing us that, as reported in our Annual Report on Form

10-K for the year ended December 31, 2024, because our stockholders’ equity was $723,959, as of April 23, 2025, we did not

meet the alternatives of market value of listed securities or net income from continuing operations, and we no longer comply with Listing

Rule 5550(b)(1) (the “ Rule 5550 ”).

We have 45 calendar days to submit a plan to

the Staff to regain compliance.

If our plan is accepted, we may be granted an extension of up to 180 calendar days from the date of the

letter, or until October 21, 2025, to evidence compliance.

In determining whether to accept our plan, the

Staff will consider such things as the likelihood that the plan will result in compliance with Nasdaq’s continued listing criteria,

our past compliance history, the reasons for our current non-compliance, other corporate events that may occur within our review period,

our overall financial condition, and our public disclosures.

If the Staff does not accept our plan, we will have the opportunity to appeal

that decision to a Hearings Panel.

The Nasdaq notification has no immediate effect

on the listing of our Common Stock on the Nasdaq Capital Market.

We intend to actively monitor our stockholders’ equity

and will consider options available to us to achieve compliance with Rule 5550.

There can be no assurance that we will be able to regain

compliance with the Listing Rule or will otherwise be in compliance with the other listing standards for the Nasdaq Capital Market.

If our Common Stock ultimately were to be delisted

for any reason, it could negatively impact us by (i) reducing the liquidity and market price of our Common Stock;

(ii) reducing the number

of investors willing to hold or acquire our Common Stock;

(ii) limiting our ability to use a registration statement to offer and sell

freely tradable securities, thereby preventing us from accessing the public capital markets;

and (iv) impairing our ability to provide

equity incentives to our employees.

On April 30, 2025, the Company reported that

it received a letter from the listing qualifications staff (the “Staff”) of Nasdaq informing it that, as reported in its

Annual Report on Form 10-K for the year ended December 31, 2024, because its stockholders’ equity was $723,959, as of April 23,

2025, the Company did not meet the alternatives of market value of listed securities or net income from continuing operations, and it

no longer comply with Listing Rule 5550(b)(1) (the “Listing Rule”).

On May 5, 2025, the Company received a notification

letter (the “Notification Letter”) from Nasdaq notifying the Company that the Staff has determined that based on the Company’s

Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which evidenced stockholders’ equity of $7,956,295, the Company

complies with the Listing Rule and the matter is closed.

Joint Venture Agreement

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each Shareholder agrees to guarantee such bank facility if the bank requires a guarantee.

Accordingly, the Company may be liable for the

bank facility in an amount up to JPY 14,925,400 (approximately $134,000), which represents 49% of the maximum bank facility.

The Agreement

further provides that Biolite JP shall issue annual dividends at the rate of at least 1.5% of Biolite JP’s profits, if it has sufficient

cash to do so.

Pursuant to the Agreement, the Company and Biolite JP agree to use their

best efforts to execute the License Agreement by the end of December 2021.

The Company agreed that any negotiation on behalf of Biolite

JP regarding the terms of the License Agreement shall be handled by the directors appointed by Lucidaim.

If the Company and such Lucidaim

directors do not reach agreement on the terms, Biolite JP may at its sole discretion determine not to execute the License Agreement without

any liability to the Company.

The company is negotiating on the licensing terms and expects to conclude soon.

Accordingly, the Company may be liable for

the bank facility in an amount up to JPY 14,925,400 (approximately $134,000), which represents 49% of the maximum bank facility.

Agreement further provides that Biolite JP shall issue annual dividends at the rate of at least 1.5% of Biolite JP’s profits, if

it has sufficient cash to do so.

Pursuant to the Agreement, the Company and Biolite

JP agree to use their best efforts to execute the License Agreement by the end of December 2021.

The Company agreed that any negotiation

on behalf of Biolite JP regarding the terms of the License Agreement shall be handled by the directors appointed by Lucidaim.

Company and such Lucidaim directors do not reach agreement on the terms, Biolite JP may at its sole discretion determine not to execute

the License Agreement without any liability to the Company.

The company is negotiating on the licensing terms and expects to conclude

The Agreement contains non-solicitation and non-compete

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$4,500) and until the aggregate amount of all liabilities exceeds JPY 2,000,000 (approximately $18,000) and then only to the extent such

liability exceed such limit.

liability exceeds such limit.

The Company paid $150,000 towards the setup of

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also allows a Shareholder to terminate the agreement upon certain defaults committed by another Shareholder, as set forth in the Agreement.

This was a related party transaction and was conducted

at arm’s length.

In addition to the Company’s board of directors providing approval for the Company to enter into the Agreement,

the Company’s audit committee approved the Company’s entry into the Agreement.

The Board believes that this joint venture

will enhance the Company’s ability to provide therapeutic solutions to significant unmet medical needs and to develop innovative

botanical drugs to treat central nervous system (“CNS”) and oncology/ hematology diseases.

The Company’s Board of Directors

believes that the joint venture has the potential to provide the Company with access to additional early-stage product candidates that

it would not otherwise have access to and to introduce the Company to early-stage opportunities, and therefore the Board believes the

joint venture is in the best interest of the Company and its shareholders.

This was a related party transaction and was

conducted at arm’s length.

In addition to the Company’s board of directors providing approval for the Company to enter into

the Agreement, the Company’s audit committee approved the Company’s entry into the Agreement.

The Board believes that this

joint venture will enhance the Company’s ability to provide therapeutic solutions to significant unmet medical needs and to develop

innovative botanical drugs to treat central nervous system (“CNS”) and oncology/ hematology diseases.

The Company’s

Board of Directors believes that the joint venture has the potential to provide the Company with access to additional early-stage product

candidates that it would not otherwise have access to and to introduce the Company to early-stage opportunities, and therefore the Board

believes the joint venture is in the best interest of the Company and its shareholders.

Recent Research Results

Vitargus® Clinical Development:

The Phase II clinical study of Vitargus® commenced

in the second quarter of 2023.

The Phase II clinical study of Vitargus®

commenced in the second quarter of 2023.

Study sites include Ramathibodi Hospital (Principal Investigator:

Duangnate Rojanaporn) and Srinagarind

Hospital (Principal Investigator:

Duangnate Rojanaporn)

and Srinagarind Hospital (Principal Investigator:

Thuss Sanguansak) in Thailand, and Sydney Eye Hospital (Principal Investigator:

Professor Dr.

Simunovic) and East Melbourne Eye Group/East Melbourne Retina (Principal Investigator:

Matthew Simunovic) and East Melbourne Eye Group/East Melbourne Retina (Principal Investigator:

Elvis Ojaimi) in Australia.

The Company is

currently producing a new investigational batch to support product improvements.

The Company is currently producing a new investigational batch to support product improvements.

ABV-2002 Corneal Storage Solution:

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progress in the Phase II Part II clinical study of ABV-1505, a treatment candidate for adult Attention-Deficit Hyperactivity Disorder

As of the date of this report, 69 subjects have been enrolled, including 50 subjects who have completed the 56-day treatment.

The study is a randomized, double-blind, placebo-controlled trial involving research centers in Taiwan and the University of California,

San Francisco (UCSF).

UCSF’s Institutional Review Board approved participation, and the site initiation visit was completed in March

As of the date of this report, 69 subjects have been enrolled, including 50 subjects who have completed the 56-day

The study is a randomized, double-blind, placebo-controlled trial involving research centers in Taiwan and the University

of California, San Francisco (UCSF).

UCSF’s Institutional Review Board approved participation, and the site initiation visit was

completed in March 2023.

On March 27, 2025, the Company has submitted the Clinical Study Report (CSR) for this study to the U.S.

and Drug Administration (FDA).

The Company is currently evaluating further steps based on internal review and strategic alignment.

Public Offering & Financings

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15 days following the closing, with some noted exceptions.

On March 3, 2025 and April 1, 2025, May 14, 2025,

and June 5, 2025, Lind converted $800,000 ($200,000 in each conversion) principal balance on 3 rd Lind Note into 800,000 shares

of the Company’s common stocks, leaving outstanding principal of $200,000 as of June 30, 2025.

On July 1, 2025, Lind exercised 500,000 warrants

and left 500,000 warrants as of the date of this report.

On July 9, 2025, Lind converted the remaining $200,000 outstanding 3 rd

Lind Note to the Company’s common stocks.

During the six months ended June 30, 2025, the

Company conducted several private offerings of its common stock to several individual investors, and issued 2,566,557 unregistered shares

at $0.60 to $1.30 per share, raising a total of $1,868,750.

Among these offerings, 130,771 shares are yet to be issued as of June 30,

2025 but issued on July 11, 2025, accounted for $170,000 fund raised.

2024 Financings

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into another letter agreement (the “November Letter Agreement”), pursuant to which Lind agreed to exercise, for cash, 500,000

of the Existing Warrants to purchase shares of Common Stock, with a current exercise price of $0.75 per share, at a reduced exercise price

of $0.42 per share.

of the Existing Warrants to purchase shares of Common Stock, with a current exercise price of $0.75 per share, at a reduced exercise

price of $0.42 per share.

On October 18, 2024, the Company issued Lind

200,000 shares of the Company’s common stock as a repayment of $200,000 principal of 2 nd Lind Note.

According to the amended

agreement pursuant to Nasdaq requirements, the conversion price is subject to $1.00 floor price if the conversion price was below such

Based on the conversion price of $0.4229, the Company made an additional $147,892 cash repayment in addition to the issuance of

200,000 shares.

According to the

amended agreement pursuant to Nasdaq requirements, the conversion price is subject to $1.00 floor price if the conversion price was below

Based on the conversion price of $0.4229, the Company made an additional $147,892 cash repayment in addition to the issuance

of 200,000 shares.

On September 11, 2024, the Company issued Lind

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that is convertible into shares of the Company’s common stock at a conversion price, which shall be the lesser of (i) $3.50 (the

“Fixed Price”) and (ii) 90% of the average of the three lowest VWAPs (as defined in the 3 rd Lind Note) during the

20 trading days prior to conversion (“Variable Price”), subject to adjustment (the “Note Shares”).

“Fixed Price”) and (ii) 90% of the average of the three lowest VWAPs (as defined in the 3 rd Lind Note) during

the 20 trading days prior to conversion (“Variable Price”), subject to adjustment (the “Note Shares”).

Notwithstanding

the foregoing, provided that no Event of Default (as defined in the 3 rd Lind Note) shall have occurred, conversions under the

3 rd Lind Note shall be at the Fixed Price for the first 180 days following the closing date.

Lind will also receive a 5-year,

common stock purchase warrant (the “3 rd Lind Warrant”) to purchase up to 1,000,000 shares of the Company’s

the foregoing, provided that no Event of Default (as defined in the 3 rd Lind Note) shall have occurred, conversions under

the 3 rd Lind Note shall be at the Fixed Price for the first 180 days following the closing date.

Lind will also receive a

5-year, common stock purchase warrant (the “3 rd Lind Warrant”) to purchase up to 1,000,000 shares of the Company’s

common stock at an initial exercise price of $2.00 per share, subject to adjustment (each, a “Warrant Share,” together with

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The parties later agreed to

a floor price of $1.00 for the Variable Price and that the Company would compensate Lind in cash if the Variable Price was less than such

floor price at the time of conversion.

a floor price of $1.00 for the Variable Price and that the Company would compensate Lind in cash if the Variable Price was less than

such floor price at the time of conversion.

Upon the occurrence of any Event of Default (as

defined in the 3 rd Lind Note), the Company must pay Lind an amount equal to 120% of the then outstanding principal amount of

the 3 rd Lind Note, in addition to any other remedies under the 3 rd Lind Note or the other Transaction Documents

defined in the 3 rd Lind Note), the Company must pay Lind an amount equal to 120% of the then outstanding principal amount

of the 3 rd Lind Note, in addition to any other remedies under the 3 rd Lind Note or the other Transaction Documents

(as defined below).

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new securities.

In connection with the Offering, the Company and

its subsidiaries:

In connection with the Offering, the Company

and its subsidiaries:

(i) Biokey, Inc., a California corporation (“BioKey”), (ii) Biolite Holding, Inc., a Nevada corporation

(“BioLite”), (iii) Biolite BVI, Inc., a British Virgin Islands corporation (“BioLite BVI”) and (iv) American BriVision

Corporation, a Delaware corporation (“American BriVision” and, collectively with the Company, BioKey, BioLite, and BioLite

BVI, the “Guarantors”), jointly and severally guaranteed all of the obligations of the Company in connection with the offering

(the “Guaranty”) with certain collateral, as set forth in the related Transaction Documents (as hereinafter defined).

sale of the 3 rd Lind Note and the terms of the offering, including the Guaranty are set forth in the securities purchase agreement,

the 3 rd Lind Note, the 3 rd Lind Warrant, the Second Amendment to Guaranty, the Second Amendment to Security Agreement,

and the Second Amendment to Guarantor Security Agreement (collectively, the “Transaction Documents”).

(“BioLite”), (iii) Biolite BVI, Inc., a British Virgin Islands corporation (“BioLite BVI”) and (iv) American

BriVision Corporation, a Delaware corporation (“American BriVision” and, collectively with the Company, BioKey, BioLite,

and BioLite BVI, the “Guarantors”), jointly and severally guaranteed all of the obligations of the Company in connection

with the offering (the “Guaranty”) with certain collateral, as set forth in the related Transaction Documents (as hereinafter

The sale of the 3 rd Lind Note and the terms of the offering, including the Guaranty are set forth in the securities

purchase agreement, the 3 rd Lind Note, the 3 rd Lind Warrant, the Second Amendment to Guaranty, the Second Amendment

to Security Agreement, and the Second Amendment to Guarantor Security Agreement (collectively, the “Transaction Documents”).

Allele Capital Partners, LLC (“Allele”)

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the Company has agreed to pay certain expenses

of the placement agent in connection with the offering and issued them a warrant to purchase up to 25,000 shares of common stock, on the

same terms as set forth in the 3 rd Lind Warrant.

of the placement agent in connection with the offering and issued them a warrant to purchase up to 25,000 shares of common stock, on

the same terms as set forth in the 3 rd Lind Warrant.

The securities purchase agreement also contains

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and other obligations and rights of the parties.

The foregoing description of the Transaction Documents

is qualified by reference to the full text of the forms of the Transaction Documents, which are filed as Exhibits hereto and incorporated

herein by reference.

The foregoing description of the Transaction

Documents is qualified by reference to the full text of the forms of the Transaction Documents, which are filed as Exhibits hereto and

incorporated herein by reference.

Financing in 2023

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subject to adjustment.

Notwithstanding the foregoing, provided that no Event of Default (as defined in the 2 nd Lind Note) shall

have occurred, conversions under the 2 nd Lind Note shall be at the Fixed Price for the first 180 days following the closing

Lind will also receive a 5-year, common stock purchase warrant (the “2 nd Lind Warrant”) to purchase up to

1,000,000 shares of the Company’s common stock at an initial exercise price of $2 per share, subject to adjustment.

Notwithstanding the foregoing, provided that no Event of Default (as defined in the 2 nd Lind Note)

shall have occurred, conversions under the 2 nd Lind Note shall be at the Fixed Price for the first 180 days following the

closing date.

Lind will also receive a 5-year, common stock purchase warrant (the “2 nd Lind Warrant”) to purchase

up to 1,000,000 shares of the Company’s common stock at an initial exercise price of $2 per share, subject to adjustment.

later agreed to a floor price of $1.00 for the Variable Price and that the Company would compensate Lind in cash if the variable price

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Upon the occurrence of any Event of Default (as

defined in the 2 nd Lind Note), the Company must pay Lind an amount equal to 120% of the then outstanding principal amount of

the 2 nd Lind Note, in addition to any other remedies under the 2 nd Lind Note or the other Transaction Documents

defined in the 2 nd Lind Note), the Company must pay Lind an amount equal to 120% of the then outstanding principal amount

of the 2 nd Lind Note, in addition to any other remedies under the 2 nd Lind Note or the other Transaction Documents

(as defined below).

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corporation (“BioLite”), (iii) Biolite BVI, Inc., a British Virgin Islands corporation (“BioLite BVI”) and (iv)

American BriVision Corporation, a Delaware corporation (“American BriVision” and, collectively with the Company, BioKey, BioLite,

and BioLite BVI, the “Guarantors”), jointly and severally guaranteed all of the obligations of the Company in connection with

the 2 nd Lind Offering (the “Guaranty”) with certain collateral, as set forth in the related Transaction Documents

American BriVision Corporation, a Delaware corporation (“American BriVision” and, collectively with the Company, BioKey,

BioLite, and BioLite BVI, the “Guarantors”), jointly and severally guaranteed all of the obligations of the Company in connection

with the 2 nd Lind Offering (the “Guaranty”) with certain collateral, as set forth in the related Transaction Documents

(as hereinafter defined).

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and other obligations and rights of the parties.

The foregoing description of the Transaction Documents

is qualified by reference to the full text of the forms of the Transaction Documents, which are filed as Exhibits hereto and incorporated

herein by reference.

As of June 30, 2024, this February 2023 Lind Note

was fully repaid.

The foregoing description of the Transaction

Documents is qualified by reference to the full text of the forms of the Transaction Documents, which are filed as Exhibits hereto and

incorporated herein by reference.

As of June 30, 2024, this February 2023 Lind

Note was fully repaid.

On February 23, 2023, the Company entered into a securities purchase agreement (the “Lind Securities Purchase

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(the “Monthly Payments”).

At the Company’s discretion, the Monthly Payments shall be made in (i) cash, (ii) shares of

the Company’s common stock, or (iii) a combination of cash and Shares;

At the Company’s discretion, the Monthly Payments shall be made in (i) cash, (ii) shares

of the Company’s common stock, or (iii) a combination of cash and Shares;

if made in shares, the number of shares shall be determined

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In addition, if the Company is unable to increase its market capitalization and is unable

to obtain a further waiver or amendment to the Lind Note, then the Company could experience an event of default under the Lind Note, which

could have a material adverse effect on the Company’s liquidity, financial condition, and results of operations.

The Company cannot

make any assurances regarding the likelihood, certainty, or exact timing of the Company’s ability to increase its market capitalization,

as such metric is not within the immediate control of the Company and depends on a variety of factors outside the Company’s control.

to obtain a further waiver or amendment to the Lind Note, then the Company could experience an event of default under the Lind Note,

which could have a material adverse effect on the Company’s liquidity, financial condition, and results of operations.

cannot make any assurances regarding the likelihood, certainty, or exact timing of the Company’s ability to increase its market

capitalization, as such metric is not within the immediate control of the Company and depends on a variety of factors outside the Company’s

The Lind Warrant may be exercised via cashless

Pursuant to the terms of the Lind Securities Purchase

Agreement, if at any time prior to a date that is 18 months following the closing of the Lind Offering, the Company proposes to offer

or sell any additional securities in a subsequent financing, the Company shall first offer Lind the opportunity to purchase up to 10%

of such new securities.

Pursuant to the terms of the Lind Securities

Purchase Agreement, if at any time prior to a date that is 18 months following the closing of the Lind Offering, the Company proposes

to offer or sell any additional securities in a subsequent financing, the Company shall first offer Lind the opportunity to purchase

up to 10% of such new securities.

In connection with the Lind Offering, the Company

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(i) BioKey, Inc., a California corporation (“BioKey”), (ii) Biolite Holding, Inc., a Nevada corporation

(“BioLite”), (iii) Biolite BVI, Inc., a British Virgin Islands corporation (“BioLite BVI”) and (iv) American BriVision

Corporation, a Delaware corporation (“American BriVision” and, collectively with the Company, BioKey, BioLite, and BioLite

BVI, the “Guarantors”), jointly and severally guaranteed all of the obligations of the Company in connection with the Lind

Offering (the “Guaranty”) with certain collateral, as set forth in the related Transaction Documents (as hereinafter defined).

(“BioLite”), (iii) Biolite BVI, Inc., a British Virgin Islands corporation (“BioLite BVI”) and (iv) American

BriVision Corporation, a Delaware corporation (“American BriVision” and, collectively with the Company, BioKey, BioLite,

and BioLite BVI, the “Guarantors”), jointly and severally guaranteed all of the obligations of the Company in connection

with the Lind Offering (the “Guaranty”) with certain collateral, as set forth in the related Transaction Documents (as hereinafter

The sale of the Lind Note and the terms of the

Lind Offering, including the Guaranty are set forth in the Lind Securities Purchase Agreement, the Note, the Warrant, a Security Agreement,

Guarantor Security, Guaranty, a Trademark Security Agreement with Rgene Corporation, a Trademark Security Agreement with BioFirst, a Patent

Security Agreement, a Copyright Security Agreement and a Stock Pledge Agreement (collectively, the “Transaction Documents”).

Guarantor Security, Guaranty, a Trademark Security Agreement with Rgene Corporation, a Trademark Security Agreement with BioFirst, a

Patent Security Agreement, a Copyright Security Agreement and a Stock Pledge Agreement (collectively, the “Transaction Documents”).

Allele Capital Partners, LLC (“Allele”)

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purchase warrants to purchase 6% of the number of shares of common stock issuable under the Lind Note.

We also agreed to pay certain expenses

of the placement agent in connection with the Lind Offering.

We also agreed to pay certain

expenses of the placement agent in connection with the Lind Offering.

Pursuant to the Lind Securities Purchase Agreement,

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$12.5 million for 10 consecutive days through February 23, 2024.

Notwithstanding the waiver, Lind retains its right to exercise conversion rights

under 2.2(a), 2.2(c)(2)(x) and 3.1 of the Note, which could result in a substantial amount of common stock issued at a significant discount

to the trading price of the Company’s common stock.

Notwithstanding the waiver, Lind retains its right to exercise conversion

rights under 2.2(a), 2.2(c)(2)(x) and 3.1 of the Note, which could result in a substantial amount of common stock issued at a significant

discount to the trading price of the Company’s common stock.

In addition, if the Company is unable to increase its market capitalization

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capitalization, as such metric is not within the immediate control of the Company and depends on a variety of factors outside the Company’s

The foregoing description of the Transaction Documents

is qualified by reference to the full text of the forms of the Transaction Documents, which are filed as Exhibits hereto and incorporated

herein by reference.

The foregoing description of the Transaction

Documents is qualified by reference to the full text of the forms of the Transaction Documents, which are filed as Exhibits hereto and

incorporated herein by reference.

On August 1, 2023, Lind converted $500,000 convertible

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Key elements of our business strategy include:

Advancing to the pivotal trial phase of ABV-1701 Vitargus ® for the treatments of Retinal Detachment or Vitreous Hemorrhage, which we expect to generate revenues in the future.

Focusing on licensing ABV-1504 for the treatment of major depressive disorder, MDD, after the successful completion of its Phase II clinical trials.

Completing Phase II, Part 2 clinical trial for ABV-1505 for the treatment of attention deficit hyperactivity disorder, ADHD.

Out licensing drug candidates and medical device candidates to major pharmaceutical companies for phase III and pivotal clinical trials, as applicable, and further marketing if approved by the FDA.

to the pivotal trial phase of ABV-1701 Vitargus ® for the treatments of Retinal

Detachment or Vitreous Hemorrhage, which we expect to generate revenues in the future.

on licensing ABV-1504 for the treatment of major depressive disorder, MDD, after the successful

completion of its Phase II clinical trials.

Phase II, Part 2 clinical trial for ABV-1505 for the treatment of attention deficit hyperactivity

disorder, ADHD.

licensing drug candidates and medical device candidates to major pharmaceutical companies

for phase III and pivotal clinical trials, as applicable, and further marketing if approved

We plan to augment our core research and development

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The terms of these agreements typically include payment to the Company related to one or more of the following:

nonrefundable upfront license fees,

development and commercial milestones,

partial or complete reimbursement of research and development costs and

royalties on net sales of licensed products.

● nonrefundable

upfront license fees,

● development

and commercial milestones,

or complete reimbursement of research and development costs and

on net sales of licensed products.

Each type of payments results in revenue except

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The Company had multiple deliverables under the

collaborative agreements, including deliverables relating to grants of technology licenses, regulatory and clinical development, and marketing

Estimation of the performance periods of the Company’s deliverables requires the use of management’s judgment.

Significant factors considered in management’s evaluation of the estimated performance periods include, but are not limited to,

the Company’s experience in conducting clinical development, regulatory and manufacturing activities.

The Company reviews the estimated

duration of its performance periods under its collaborative agreements on an annual basis, and makes any appropriate adjustments on a

prospective basis.

Future changes in estimates of the performance period under its collaborative agreements could impact the timing of

future revenue recognition.

Collaborative agreement with ForSeeCon Eye

Corporation, a related party

collaborative agreements, including deliverables relating to grants of technology licenses, regulatory and clinical development, and

marketing activities.

Estimation of the performance periods of the Company’s deliverables requires the use of management’s

Significant factors considered in management’s evaluation of the estimated performance periods include, but are not limited

to, the Company’s experience in conducting clinical development, regulatory and manufacturing activities.

The Company reviews the

estimated duration of its performance periods under its collaborative agreements on an annual basis, and makes any appropriate adjustments

on a prospective basis.

Future changes in estimates of the performance period under its collaborative agreements could impact the timing

of future revenue recognition.

Collaborative agreement with

ForSeeCon Eye Corporation, a related party

On March 25, 2024, the Company and BioFirst each

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Additionally, each of the Company and BioFirst are eligible to receive royalties of 5% of net Sales.

March 31, 2025, the Company has received 5,000,000 FEYE shares but did not recognize such licensing revenue since the fair value of FEYE

June 30, 2025, the Company has received 5,000,000 FEYE shares but did not recognize such licensing revenue since the fair value of FEYE

stock is uncertain.

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pursuant to the Amendment.

There was no transaction incurred during the period ended March 31, 2025.

There was no transaction incurred during the period ended June 30, 2025.

Collaborative agreement with OncoX BiopPharma,

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of which there can be no guarantee.

Oncox entered into another agreement with ABVC’s affiliate, Rgene Corporation, on the same terms.In

2024 the Company received in cash and recognized revenue of $200,000, pursuant to the agreement.

Oncox entered into another agreement with ABVC’s affiliate, Rgene Corporation, on the same

terms.In 2024 the Company received in cash and recognized revenue of $200,000, pursuant to the agreement.

On May 8, 2024, the Company entered into a definitive

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$625,000 in cash after OncoX’s next round of fundraising, of which there can be no guarantee.

Oncox may remit cash payments of at least $100,000

towards the licensing fees and deductible from the second milestone payment;

each licensor is also entitled to royalties of 5% of Net

Sales, from the first commercial sale of the TNBC Product in the noted territory, which remains uncertain.

The Company will permit Oncox

to pay the license fee in installments or in a lump sum and will allow Oncox to use its revenue to fund such payments.

Oncox may remit cash payments of

at least $100,000 towards the licensing fees and deductible from the second milestone payment;

each licensor is also entitled to royalties

of 5% of Net Sales, from the first commercial sale of the TNBC Product in the noted territory, which remains uncertain.

The Company will

permit Oncox to pay the license fee in installments or in a lump sum and will allow Oncox to use its revenue to fund such payments.

On May 23, 2024, the Company and its subsidiary,

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Oncox may use its revenue to fund the licensing fees.

Collaborative agreements with BHK, a related

In February and December of 2015, BioLite, Inc.

entered into a total of three joint venture agreements with BioHopeKing to jointly develop ABV-1501 for Triple Negative Breast Cancer (TNBC), ABV-1504 for MDD and ABV-1505 for ADHD.

The agreements granted marketing rights to BioHopeKing for certain Asian countries in return for a series of milestone payments totaling $10 million in cash and equity of BioHopeKing or equity securities owned by BioHopeKing.

Collaborative agreements with

BHK, a related party

(i) In February and December of

2015, BioLite, Inc.

entered into a total of three joint venture agreements with BioHopeKing to jointly develop ABV-1501 for Triple Negative

Breast Cancer (TNBC), ABV-1504 for MDD and ABV-1505 for ADHD.

The agreements granted marketing rights to BioHopeKing for certain Asian

countries in return for a series of milestone payments totaling $10 million in cash and equity of BioHopeKing or equity securities owned

by BioHopeKing.

The milestone payments are determined by a schedule

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New Drug Application (NDA) Submission

In December of 2015, BHK paid the initial cash payment of $1 million upon the execution of the BHK Agreement.

The Company concluded that certain deliverables are considered separate units of accounting as the delivered items have value to the customer on a standalone basis and recognized this cash payment as collaboration revenue when all research, technical, and development data was delivered to BHK in 2015.

The payment included compensation for past research efforts and contributions made by BioLite Taiwan before the BHK agreement was signed and does not relate to any future commitments made by BioLite Taiwan and BHK in the BHK Agreement.

In August 2016, the Company received the second milestone payment of $1 million, and recognized collaboration revenue for the year ended December 31, 2016.

The Company completed the phase II clinical trial for ABV-1504 MDD on October 31, 2019, but has not yet completed the phase II clinical trial for ABV-1505 ADHD.

In addition to the milestone payments, BioLite Inc.

is entitled to receive a royalty equal to 12% of BHK’s net sales related to ABV-1501, ABV-1504 and ABV-1505 Products.

As of March 31, 2025, the Company has not earned royalties under the BHK Co-Development Agreement.

The BHK Co-Development Agreement will remain in effect for fifteen years from the date of first commercial sale of the Product in in Asia excluding Japan.

December of 2015, BHK paid the initial cash payment of $1 million upon the execution of the

BHK Agreement.

The Company concluded that certain deliverables are considered separate units

of accounting as the delivered items have value to the customer on a standalone basis and

recognized this cash payment as collaboration revenue when all research, technical, and development

data was delivered to BHK in 2015.

The payment included compensation for past research efforts

and contributions made by BioLite Taiwan before the BHK agreement was signed and does not

relate to any future commitments made by BioLite Taiwan and BHK in the BHK Agreement.

August 2016, the Company received the second milestone payment of $1 million, and recognized

collaboration revenue for the year ended December 31, 2016.

The Company completed the phase

II clinical trial for ABV-1504 MDD on October 31, 2019, but has not yet completed the phase

II clinical trial for ABV-1505 ADHD.

addition to the milestone payments, BioLite Inc.

is entitled to receive a royalty equal to

12% of BHK’s net sales related to ABV-1501, ABV-1504 and ABV-1505 Products.

30, 2025, the Company has not earned royalties under the BHK Co-Development Agreement.

BHK Co-Development Agreement will remain in effect for fifteen years from the date of first

commercial sale of the Product in in Asia excluding Japan.

Co-Development agreement with BioLite Japan

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each Shareholder agrees to guarantee such bank facility if the bank requires a guarantee.

Accordingly, the Company may be liable for the

bank facility in an amount up to JPY 14,925,400 (approximately $134,000), which represents 49% of the maximum bank facility.

The Agreement

further provides that BioLite JP shall issue annual dividends at the rate of at least 1.5% of Biolite’s profits, if it has sufficient

cash to do so.

Pursuant to the agreement between the Company and BioLite JP, both

parties agreed to use their best efforts to execute a License Agreement by the end of December 2021.

Under the terms of the agreement,

negotiations on behalf of BioLite JP are conducted by directors appointed by Lucidaim.

If the Company and such directors do not reach

agreement on the terms, BioLite JP may, at its sole discretion, elect not to execute the License Agreement without any liability to the

Accordingly, the Company may be liable for

the bank facility in an amount up to JPY 14,925,400 (approximately $134,000), which represents 49% of the maximum bank facility.

Agreement further provides that BioLite JP shall issue annual dividends at the rate of at least 1.5% of Biolite’s profits, if it

has sufficient cash to do so.

Pursuant to the agreement between the Company

and BioLite JP, both parties agreed to use their best efforts to execute a License Agreement by the end of December 2021.

Under the terms

of the agreement, negotiations on behalf of BioLite JP are conducted by directors appointed by Lucidaim.

If the Company and such directors

do not reach agreement on the terms, BioLite JP may, at its sole discretion, elect not to execute the License Agreement without any liability

to the Company.

The company is negotiating on the licensing terms and expects to conclude soon.

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the Company recognized fully $150,000 loss in equity method investment based on continuing operating losses of BioLite JP.

In April 2024, the Japan Patent Office

granted a new patent protection for the Company’s Major Depressive Disorder (MDD) candidate, ABV-1504.

In April 2024, the Japan Patent Office granted

a new patent protection for the Company’s Major Depressive Disorder (MDD) candidate, ABV-1504.

The patent is valid through 2040

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with policy changes planned for the summer will further increase research activity and support a return to pre-COVID-19 demand levels

The global pandemic of COVID-19 continues to evolve

rapidly, and we will continue to monitor the situation closely, including its potential effect on our plans and timelines.

Additionally, it is reasonably possible that estimates

made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions,

including losses on inventory;

The global pandemic of COVID-19 continues to

evolve rapidly, and we will continue to monitor the situation closely, including its potential effect on our plans and timelines.

Additionally, it is reasonably possible that

estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these

conditions, including losses on inventory;

impairment losses related to goodwill and other long-lived assets and current obligations.

Restatement of Consolidated Financial Statements

The Company restated its financial statements as of and for the year

ended December 31, 2023 (the “2023 Restatement”), to correct misstatements in those prior periods related to improperly applying

accounting guidance on the share-based payments, incorrectly recognizing interest expenses upon the conversion of convertible debts, and

misidentifying the existence of non-controlling interest of our subsidiary.

The Company restated its financial statements

as of and for the year ended December 31, 2023 (the “2023 Restatement”), to correct misstatements in those prior periods

related to improperly applying accounting guidance on the share-based payments, incorrectly recognizing interest expenses upon the conversion

of convertible debts, and misidentifying the existence of non-controlling interest of our subsidiary.

The Company entered into a cooperation agreement

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Upon further review, the Company considered ASC 718 Compensation - Stock Compensation,

should have been the appropriate guidance to apply given the Company’s common stocks are listed in Nasdaq with more observable fair

value (Level 1).

Furthermore, at the time of issuance of these financial statements, no real estate title was transferred to the Company.

As a result, the Company adjusted the carrying value of the asset and reclassified the balance to “Prepayment for asset acquisition”

account to reflect the value of 370,000 shares issued at $1.87, the closing price as of the contract date.

The Company also corrected

the share price used to recognize stock compensation expense from $20 to $1.87 for the 29,600 shares of common stock issued on the same

day to several consultants.

should have been the appropriate guidance to apply given the Company’s common stocks are listed in Nasdaq with more observable

fair value (Level 1).

Furthermore, at the time of issuance of these financial statements, no real estate title was transferred to the

As a result, the Company adjusted the carrying value of the asset and reclassified the balance to “Prepayment for asset

acquisition” account to reflect the value of 370,000 shares issued at $1.87, the closing price as of the contract date.

also corrected the share price used to recognize stock compensation expense from $20 to $1.87 for the 29,600 shares of common stock issued

on the same day to several consultants.

As a result, these adjustments reduced $6,708,100 for asset recognized and $536,648 for stock-compensation

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$1,179,667 for the year ended December 31, 2023.

The overstatement is offsetting against additional paid-in capital due to the convertible note being

converted to the Company’s own common stocks instead of being repaid or disposition.

In November 2023, the Company and one of its subsidiaries

entered into a licensing agreement with AiBtl.

The Company accounted for a 100% control of AiBtl as of December 31, 2023, but later discovered

that AiBtl had outstanding founder shares that were not deposited to the stock transfer agent in the timely manner.

Such shares reduced

the Company’s controlling interest from 100% to 69.70%.

Accordingly, the Company adjusted the relevant accounts in our consolidated

financial statements.

The overstatement is offsetting against additional paid-in capital due to the convertible

note being converted to the Company’s own common stocks instead of being repaid or disposition.

In November 2023, the Company and one of its

subsidiaries entered into a licensing agreement with AiBtl.

The Company accounted for a 100% control of AiBtl as of December 31, 2023,

but later discovered that AiBtl had outstanding founder shares that were not deposited to the stock transfer agent in the timely manner.

Such shares reduced the Company’s controlling interest from 100% to 69.70%.

Accordingly, the Company adjusted the relevant accounts

in our consolidated financial statements.

As discussed in Note 12 to the financial statements

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costs of services should be recognized along with the period when services are received.

Therefore, the Company reversed share-based compensation

expenses of $451,480 and $902,960 for the years ended December 31, 2024 and 2023, respectively.

The accumulated deficit as of December

31, 2022, was corrected with the Stock Subscription Receivables for $1,354,440 as a result of such adjustments.

Therefore, the Company reversed share-based

compensation expenses of $451,480 and $902,960 for the years ended December 31, 2024 and 2023, respectively.

The accumulated deficit

as of December 31, 2022, was corrected with the Stock Subscription Receivables for $1,354,440 as a result of such adjustments.

For further details about the impact of the Restatement,

please see the Notes to the Company’s financial statements for the year ended December 31, 2024, included in its Annual Report on

Form 10-K that was filed with the SEC on April 15, 2025.

please see the Notes to the Company’s financial statements for the year ended December 31, 2024, included in its Annual Report

on Form 10-K that was filed with the SEC on April 15, 2025.

After discussing the issue with Simon & Edward, LLP (“S&E”),

the Company’s management determined that the Company is not required to file an amendment to the Annual Report on Form 10-K for

the year ended December 31, 2023.

Summary of Critical Accounting Policies

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in preparing quarterly and annual financial statements.

Certain information and footnote disclosures normally included in the annual consolidated

financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Certain information and footnote disclosures normally included in the annual

consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America

GAAP”) have been condensed or omitted.

These unaudited 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, 2024, filed with the SEC on April 15, 2025 (“2024 Form 10-K.”)

These unaudited 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, 2024, filed with the SEC on April 15, 2025 (“2024 Form 10-K.”)

Estimates and Assumptions

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Recent Accounting Pronouncements

In August 2023, the FASB issued ASU 2023-05, Business

Combinations-Joint Venture Formations (Subtopic 805-60) which requires certain joint ventures to apply a new basis of accounting upon

formation by recognizing and initially measuring most of their assets and liabilities at fair value.

The guidance does not apply to joint

ventures that may be proportionately consolidated and those that are collaborative arrangements.

ASU 2023-05 is effective for joint venture

with a formation date on or after January 1, 2025, early adoption is permitted.

The Company is currently evaluating the impact that the

standard will have on its unaudited consolidated financial statements.

Results of Operations - Three Months Ended

March 31, 2025 Compared to Three Months Ended March 31, 2024 (Restated).

In August 2023, the FASB issued ASU 2023-05,

Business Combinations-Joint Venture Formations (Subtopic 805-60) which requires certain joint ventures to apply a new basis of accounting

upon formation by recognizing and initially measuring most of their assets and liabilities at fair value.

The guidance does not apply

to joint ventures that may be proportionately consolidated and those that are collaborative arrangements.

ASU 2023-05 is effective for

joint venture with a formation date on or after January 1, 2025, early adoption is permitted.

The Company is currently evaluating the

impact that the standard will have on its unaudited consolidated financial statements.

Results of Operations - Three

Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024.

The following table presents, for the three months

indicated, our unaudited consolidated statements of operations information.

Three Months Ended

Gross Profits

Operating Expenses

Loss from Operations

$ (2,294,983 )

$ (1,434,876 )

Other Income (Expense)

Interest (Expense), Net

Net Income (Loss)

$ (2,332,833 )

$ (1,047,412 )

$ (1,285,421 )

We generated $0 and $117,142

in revenues for the three months ended June 30, 2025 and 2024, respectively.

The revenue recognized in 2024 was mainly due to the milestone

revenue recognized from licensing to ForSeeCon.

Operating Expenses.

Our operating

expenses have increased by $1,317,924 or 135%, to $2,294,983 for the three months ended June 30, 2025 from $977,059 for the three months

ended June 30, 2024.

Such an increase in operating expenses was mainly due to the Company hired certain consultants and advisors for business

opportunity and financial advisory services during this period.

Other Income (Expense) .

expense was $14,223 for the three months ended June 30, 2025, compared to other expense of $289,199 for the three months ended June 30,

The change was principally caused by the decrease in interest expense and increase in foreign exchange income.

Interest income (expense), net.

was $(110,274) for the three months ended June 30, 2025, compared to ($179,938) for the three months ended June 30, 2024.

of $69,664, or approximately 39%, was primarily due to the decrease in interest expense due to less amount of converted notes resulted

in less amount of interest expenses.

As a result of the

above factors, our net loss was $2,332,833 for the three months ended June 30, 2025 compared to $1,047,412 for the three months ended

June 30, 2024, representing an increase of $1,285,421, or 123%.

Results of Operations - Six Months Ended June

30, 2025 Compared to Six Months Ended June 30, 2024.

The following table presents, for the six months

indicated, our unaudited consolidated statements of operations information.

Six Months Ended

Gross Profits

Operating Expenses

Loss from Operations

$ (2,987,988 )

$ (3,698,362 )

Other Income (Expense)

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$ (3,277,023 )

$ (3,975,079 )

We generated $0 and $118,347

in revenues for the three months ended March 31, 2025 and 2024, respectively.

Besides assisting our licensees seeking for potential business

opportunities and investors, the Company also is exploring other revenue streams, including the FDA application services which generated

limited revenue in the three months ended March 31, 2024.

For out-licensing agreements, please refer to the above collaborative agreements

in revenues for the six months ended June 30, 2025 and 2024, respectively.

The decrease in revenues was mainly due to no cash receipt

from our recent licensing agreements in this period.

Operating Expenses.

Our operating expenses

have decreased by $2,146,178 or 76%, to $693,005 for the three months ended March 31, 2025 from $2,839,183 for the three months ended

March 31, 2024.

Such a decrease in operating expenses was mainly attributable to the decrease in selling, general and administrative expenses

and research and development expenses.

Our operating

expenses have decreased by $828,254, or 22%, to $2,987,988 for the six months ended June 30, 2025 from $3,816,242 for the six months ended

June 30, 2024.

Such decrease in operating expenses was mainly attributable to the decrease in stock-based compensation expenses by $694,120

which relates to costs in conjunction with employee compensation and non-employee share-based payments.

Other Income (Expense) .

expense was $265,408 for the six months ended June 30, 2025, compared to other expense of $387,611 for the six months ended June 30, 2024.

The change was principally caused by the decrease in interest expense, while being offset by the increase in foreign exchange income for

the six months ended June 30, 2025.

Interest income (expense), net.

Our net interest expense was $(203,896) for the three months ended March 31, 2025, compared to ($177,627) for the three months ended

March 31, 2024.

The increase in net interest expense of $26,269, or approximately 15%, was primarily due to the increase in

recognition of interest expense for the converted notes for proper accounting purposes .

Other Expense .

Our other expense was

$251,185 for the three months ended March 31, 2025, compared to other expense of $89,412 for the three months ended March 31, 2024.

change was principally caused by the increase in loss on equity investment, interest expense, and offsetting by decrease in gain on foreign

exchanges in the three months ended March 31, 2025.

As a result of the above

factors, our net loss was $944,190 for the three months ended March 31, 2025 compared to $2,927,667 for the three months ended March 31,

was $(314,170) for the six months ended June 30, 2025, compared to $(357,565) for the six months ended June 30, 2024.

The decrease of

$43,395, or approximately 12%, was primarily due to the decrease in interest expense due to recognition of interest expense for the converted

notes for proper accounting purpose .

As a result of the

above factors, our net loss was $3,277,023 for the six months ended June 30, 2025 compared to $3,975,079 for the six months ended June

30, 2024, representing a decrease of $698,056, or 18%.

Asset Recognition and Investment Reclassification

During the three months ended March 31, 2025, the Company recognized certain

updates to its financial position.

The Company recorded the acquisition of land located in Puli, Taiwan, with a carrying value of approximately

$7.67 million, based on control obtained over the asset during the period.

The Company intends to utilize the land for future development

of its health-related business operations.

In addition, amounts previously classified as "Due from Related Parties" were reclassified

to "Long-Term Investments" to reflect the nature of the Company’s ongoing investment in Rgene Corporation.

The reclassification

was based on management’s ongoing evaluation of the investment’s expected holding period and strategic purpose, after entering

into the convertible note loan in 2023.

These changes increased total assets and stockholders’ equity as of March 31, 2025.

Notwithstanding

these improvements in the Company’s asset base, management continues to evaluate liquidity risks and is seeking to address working

capital needs through operational activities and external financing options.

On March 31, 2025, the Company recorded the acquisition

of land located in Puli, Taiwan, with a carrying value of approximately $7.67 million, based on control obtained over the asset during

The Company intends to utilize the land for future development of its health-related business operations.

In addition, amounts

previously classified as "Due from Related Parties" were reclassified to "Long-Term Investments" to reflect the nature

of the Company’s ongoing investment in Rgene Corporation.

The reclassification was based on management’s ongoing evaluation

of the investment’s expected holding period and strategic purpose, after entering into the convertible note loan in 2023.

changes increased total assets and stockholders’ equity as of June 30, 2025.

Notwithstanding these improvements in the Company’s

asset base, management continues to evaluate liquidity risks and is seeking to address working capital needs through operational activities

and external financing options.

Liquidity and Capital Resources

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Going Concern and Liquidity Consideration

For the three months ended March 31, 2025, the Company reported net loss

As of March 31, 2025, the Company’s working capital deficit was $5,261,178.

In addition, the Company had net cash outflows

of $539,833 from operating activities for the three months ended March 31, 2025.

These conditions give rise to substantial doubt as to

whether the Company will be able to continue as a going concern.

For the six months ended June 30, 2025, the Company

reported net loss of $3,277,023.

As of June 30, 2025, the Company’s working capital deficit was $3,762,113.

In addition, the

Company had net cash outflows of $1,434,007 from operating activities for the six months ended June 30, 2025.

These conditions give

rise to substantial doubt as to whether the Company will be able to continue as a going concern.

Management’s plan is to continue to improve

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and interest expense.

Notably, the Company has generated cash inflow and

reduced a substantial amount of convertible debts during the first three months ended March 31, 2025, from $0.95 million to $0.84 million.

We also reduced our outstanding warrants from 2.0 million shares to 1 million shares in three months ended March 31, 2025, receiving around

$411,667 in cash.

If the Company is not able to generate positive operating cash flows, and raise additional capital, there is the risk

that the Company may not be able to meet its short-term obligations.

Management is committed to enhancing operations to generate positive

cash flows to meet our operation needs.

Three Months Ended March 31

Notably, the Company has reduced a substantial

amount of convertible debts during the six months ended June 30, 2025, from $0.95 million to $0.24 million.

We also reduced our outstanding

warrants from 2.0 million shares to 1 million shares in six months ended June 30, 2025, receiving around $411,667 in cash (further reduced

0.5 million shares in July 2025).

If the Company is not able to generate positive operating cash flows, and raise additional capital,

there is the risk that the Company may not be able to meet its short-term obligations.

Management is committed to enhancing operations

to generate positive cash flows to meet our operational needs.

Six Months Ended June 30

2024 (Restated)

Cash Flow Used In Operating Activities

$ (1,434,007 )

$ (1,167,241 )

Cash Flow Used in Investing Activities

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Cash Flow from Operating Activities

During the three months ended March 31, 2025 and 2024,

During the six months ended June 30, 2025 and

2024, the net cash used in operating activities were $1,434,007 and $1,167,241, respectively.

The decrease was primarily due to the decrease in

operating expenses.

Company has been strictly controlling the operating cash outflow, such as making certain payments with shares in lieu

of cash, extending vendors’ payment terms, and other initiatives to save the cash burn.

The increase was primarily due to the increase

in due from related parties.

The Company has been strictly control the operating cash outflow, such as making certain payments with shares

in lieu of cash, extending vendors’ payment terms, and other initiatives to save the cash burn.

Cash Flow from Investing Activities

During the three months ended March 31, 2025 and 2024,

the net cash used in investing activities were $0 and $0 respectively.

The Company does not plan to make further cash investment with

cash in the near future.

During the six months ended June 30, 2025 and

2024, the main investing activity is the loan of funds to related parties for their operating needs.

Cash Flow from Financing Activities

During the three months ended March 31, 2025 and 2024, the net cash provided

by financing activities were $428,756 and $924,147, respectively.

The decrease in net cash provided by financing activities were primarily

due to the proceeds from issuance of convertible notes, Lind’s exercise of warrants, and less short-term funding from our related

During the six months ended June 30, 2025 and

2024, the net cash provided by financing activities were $2,356,083 and $1,726,303, respectively.

The increase in net cash provided by

financing activities were primarily due to the proceeds from a series of private offerings, and LIND’s exercise of warrants, offsetting

by the repayment in short-term loans and due to related parties.

QUANTITATIVE AND QUALITATIVE

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis