ABVC BIOPHARMA, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS. ABVC BIOPHARMA, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2026 2025 ASSETS Current Assets Cash and cash equivalents $ 140,324 $ 681,480 Restricted cash - 645,505 Due from related parties 167,324 763,388 Convertible notes receivable – related parties 28,998 - Short-term investments 62,185 64,354 Prepaid expense and other current assets 250,017 346,616 Total Current Assets 648,848 2,501,343 Property and equipment, net 12,822,985 12,835,409 Operating lease right-of-use assets 1,826,905 1,913,278 Long-term investments 1,845,770 1,878,465 Prepayment for long-term investments 1,789,703 1,124,842 Prepayment for asset acquisition 691,900 691,900 Other non-current assets 106,417 116,966 Total Assets $ 19,732,528 $ 21,062,203 LIABILITIES AND EQUITY Current Liabilities Short-term bank and other loans $ 88,737 $ 755,512 Accrued expenses and other current liabilities 4,154,364 4,161,629 Contract liabilities 12,600 12,600 Operating lease liabilities 332,252 317,557 Due to related parties 277 105,704 Taxes payable 5,888 11,964 Convertible notes payable – third parties 559,010 559,010 Convertible notes payable – related parties 240,000 240,000 Total Current Liabilities 5,393,128 6,163,976 Operating lease liability – non-current 1,510,943 1,600,747 Total Liabilities 6,904,071 7,764,723 COMMITMENTS AND CONTINGENCIES Equity Preferred stock, $ 0.001 par value, 20,000,000 authorized, nil shares issued and outstanding - - Common stock, $ 0.001 par value, 100,000,000 authorized, 25,767,664 and 25,053,193 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 25,767 25,053 Stock to be issued 422,492 359,000 Additional paid-in capital 97,152,918 96,008,258 Accumulated deficit ( 78,418,603 ) ( 76,858,361 ) Accumulated other comprehensive income 499,650 487,602 Treasury stock ( 8,909,691 ) ( 8,909,691 ) Total Stockholders’ equity 10,772,533 11,111,861 Noncontrolling interest 2,055,924 2,185,619 Total Equity 12,828,457 13,297,480 Total Liabilities and Equity $ 19,732,528 $ 21,062,203 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 1 ABVC BIOPHARMA, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended March 31, 2026 2025 Revenues $ - $ - Cost of revenues - - Gross (loss) profit - - Operating expenses Selling, general and administrative expenses 751,998 615,371 Research and development expenses 33,100 28,861 Stock-based compensation 787,374 48,773 Total operating expenses 1,572,472 693,005 Loss from operations ( 1,572,472 ) ( 693,005 ) Other income (expense) Interest income 3,765 19,071 Interest expense ( 49,377 ) ( 222,967 ) Operating sublease income 12,000 12,000 Gain (loss) on foreign exchange changes ( 51,156 ) ( 9,912 ) Loss on investment in equity securities ( 31,416 ) ( 50,877 ) Other income (expenses) ( 1,281 ) 1,500 Total other income (expenses) ( 117,465 ) ( 251,185 ) Loss before provision income tax ( 1,689,937 ) ( 944,190 ) Provision for income tax expense - - Net loss ( 1,689,937 ) ( 944,190 ) Net loss attributable to non-controlling interests ( 129,695 ) ( 102,115 ) Net loss attributed to ABVC and subsidiaries ( 1,560,242 ) ( 842,075 ) Foreign currency translation adjustment 12,048 ( 1,493 ) Comprehensive loss $ ( 1,548,194 ) $ ( 843,568 ) Net loss per share: Basic and diluted $ ( 0.06 ) $ ( 0.06 ) Weighted average number of common shares outstanding: Basic and diluted 25,448,516 14,968,232 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 2 ABVC BIOPHARMA, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2026 2025 Cash flows from operating activities Net loss $ ( 1,689,937 ) $ ( 944,190 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 5,783 7,021 Stock-based compensation 787,374 48,773 Other non-cash expenses - 210,040 Loss on investment in equity securities 31,416 50,877 Short-term investments 1,168 - Amortization of right-of-use asset 86,373 106,927 Changes in operating assets and liabilities: Inventories - ( 11,460 ) Prepaid expenses and other current assets 96,599 ( 149 ) Due from related parties ( 133,778 ) 54,113 Other assets – tenant security deposit - 5,029 Accrued expenses and other current liabilities ( 7,265 ) 40,113 Tax payable ( 5,944 ) - Tenant security deposit 9,077 - Operating lease liabilities ( 75,109 ) ( 106,927 ) Net cash used in operating activities ( 894,243 ) ( 539,833 ) Cash flows from investing activities Payment for convertible notes receivable ( 32,000 ) - Repayment from related parties 759,123 - Prepayment for Long-term investment ( 680,000 ) - Net cash provided by investing activities 47,123 - Cash flows from financing activities Repayment of short-term loans ( 661,650 ) ( 29,250 ) Proceeds from exercise of warrants 102,000 411,667 Common stock subscription 319,492 - Due to related parties, net ( 102,023 ) 46,339 Net cash (used in) provided by financing activities ( 342,181 ) 428,756 Effect of exchange rate changes on cash and cash equivalents and restricted cash 2,640 6,830 Net decrease in cash and cash equivalents and restricted cash ( 1,186,661 ) ( 104,247 ) Cash and cash equivalents and restricted cash Beginning 1,326,985 863,815 Ending $ 140,324 $ 759,568 Supplemental disclosure of cash flows Cash paid during the year for: Interest expense paid $ 4,190 $ 5,231 Income taxes paid $ 5,944 $ - Non-cash financing and investing activities Acquiring control of the land $ - $ 7,670,000 Issuance of common stock for conversion of debt $ - $ 47,579 Conversion of convertible note due from related parties to equity investment $ - $ 563,819 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 3 ABVC BIOPHARMA, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock Additional Treasury Stock Stockholders’ Number of Subscribed Paid-in Accumulated Comprehensive Number of Noncontrolling Equity shares Amounts stock Capital Deficit Income Shares Amount Interest (Deficit) Balance at December 31, 2024 13,868,484 $ 13,868 $ 31,040 $ 78,595,065 $ ( 68,949,807 ) $ 445,665 ( 730,641 ) $ ( 8,909,691 ) $ ( 502,181 ) $ 723,959 Issuance of common shares for Lind CN Repayment 400,000 400 - 47,179 - - - - - 47,579 Issuance of common shares for exercise of warrants 1,029,167 1,029 - 410,638 - - - - - 411,667 Stock-based compensation 80,654 81 - 48,692 - - - - - 48,773 Acquiring control of the land - - - 4,513,795 - - - - 3,156,205 7,670,000 Net loss - - - - ( 842,075 ) - - - ( 102,115 ) ( 944,190 ) Cumulative transaction adjustments - - - - - ( 1,493 ) - - - ( 1,493 ) Balance at March 31, 2025 15,378,305 $ 15,378 $ 31,040 $ 83,615,369 $ ( 69,791,882 ) $ 444,172 ( 730,641 ) $ ( 8,909,691 ) $ 2,551,909 $ 7,956,295 Balance at December 31, 2025 25,053,193 $ 25,053 $ 359,000 $ 96,008,258 $ ( 76,858,361 ) $ 487,602 ( 730,641 ) $ ( 8,909,691 ) $ 2,185,619 $ 13,297,480 Issuance of common shares for warrant exercise 102,000 102 - 101,898 - - - - - 102,000 Issuance of common shares in private placements 131,280 131 - 255,869 - - - - - 256,000 Stock subscription received - - 63,492 - - - - - - 63,492 Stock-based compensation 481,191 481 - 786,893 - - - - - 787,374 Net loss for the period - - - - ( 1,560,242 ) - - - ( 129,695 ) ( 1,689,937 ) Cumulative transaction adjustments - - - - - 12,048 - - - 12,048 Balance at March 31, 2026 25,767,664 $ 25,767 $ 422,492 $ 97,152,918 $ ( 78,418,603 ) $ 499,650 ( 730,641 ) $ ( 8,909,691 ) $ 2,055,924 $ 12,828,457 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 4 ABVC BIOPHARMA, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND DESCRIPTION OF BUSINESS ABVC BioPharma, Inc. (the “Company”), formerly known as American BriVision (Holding) Corporation, a Nevada corporation, through the Company’s operating entity, American BriVision Corporation (“BriVision”), which was incorporated in July 2015 in the State of Delaware, engages in biotechnology to fulfill unmet medical needs and focuses on the development of new drugs and medical devices derived from plants. BriVision develops its pipeline by carefully tracking new medical discoveries or medical device technologies in research institutions in the Asia-Pacific region. Pre-clinical, disease animal model and Phase I safety studies are examined closely by the Company to identify drugs that BriVision believes demonstrate efficacy and safety. Once a drug appears to be a good candidate for 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 to conduct a Phase II clinical trial. At present, clinical trials for the Company’s drugs and medical devices are being conducted at such world-famous institutions including Stanford University, University of California San Francisco (UCSF) and Cedar Sinai Medical Centre (CSMC). The Company has three wholly-owned subsidiaries, BriVision, BioLite Holding Inc. (“BioLite Holding”), BioKey (Cayman), Inc (“BioKey Cayman”), and a majority-owned subsidiary, AiBtl BioPharma Inc. (“AiBtl”). BioLite Holding was incorporated in the State of Nevada with wholly owned subsidiary BioLite BVI, Inc. (“BioLite BVI”) that was incorporated in the British Virgin Islands . BioLite BVI holds 73 % ownership of BioLite Inc. (“BioLite Taiwan”), a Taiwanese corporation that was founded in February 2006. BioLite Taiwan has been in the business of developing new drugs since it was incorporated. Yun Zhi Yi Co. Ltd. (“Yun Zhi Yi”), a Taiwanese entity in which BioLite holds a 90 % stake and Shuling Jiang, a director and beneficial owner of more than 10 % of the ABVC’s outstanding common stock (“Shuling”, or “Ms. Jiang”), holds the remaining 10 % stake. This entity is set up for holding the land that AiBtl is working to acquire in Puli, Taiwan for developing health related business in Taiwan. BioKey Cayman was incorporated in Cayman Islands in July 2023, which is 100 % owned by ABVC. This subsidiary has no activities since inception. On May 10, 2025, ABVC transferred its 100 % ownership in BioKey Inc. (“BioKey”) to BioKey Cayman. This reorganization did not have any other impact on the consolidated financial statements. Incorporated in California on November 20, 2000, BioKey has chosen to initially focus on developing generic drugs to ride the opportunity of the booming industry. AiBtl was acquired by the Company with the transaction of the collaborative licensing agreements. On November 12, 2023, the Company and BioLite Taiwan each entered into a multi-year, global licensing agreement with AiBtl for the Company and BioLite Taiwan’s CNS drugs with the indications of MDD (Major Depressive Disorder) and ADHD (Attention Deficit Hyperactivity Disorder) (collectively, the “Licensed Products”). The potential license will cover the Licensed Products’ clinical trial, registration, manufacturing, supply, and distribution rights. The parties are determined to collaborate on the global development of the Licensed Products. The parties are also working to strengthen new drug development and business collaboration, including technology, interoperability, and standards development. As per each of the respective agreements, each of ABVC and BioLite Taiwan received 23 million shares of AiBtl stock and as a result, the Company has a controlling interest over AiBtl. If certain milestones are met, the Company and BioLite Taiwan are each eligible to receive $ 3,500,000 and royalties equaling 5 % of net sales, up to $ 100 million. The financial statements of AiBtl are included in the Company’s consolidated financial statements. As a result of these transactions, the Company became a controlling parent of AiBtl, with 58.85 % of group ownership over AiBtl. F- 5 2. LIQUIDITY, GOING CONCERN, AND RESTATEMENT Liquidity and Going Concern The accompanying financial statements have been prepared in conformity with the generally accepted accounting principles in the United States of America (the “U.S. GAAP”) which contemplates continuation of the Company on a going concern basis. The going concern basis assumes that assets are realized, and liabilities are settled in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon its ability to market and sell its products to generate positive operating cash flows. For the three months ended March 31, 2026, the Company reported net loss of $ 1,689,937 . As of March 31, 2026, the Company’s working capital deficit was $ 4,744,280 . In addition, the Company had net cash outflows of $ 894,243 from operating activities for the three months ended March 31, 2026. These conditions give rise to substantial doubt as to whether the Company will be able to continue as a going concern. To sustain its ability to support the Company’s operating activities, the Company may have to consider supplementing its available sources of funds through the following sources: ● cash generated from operations; ● other available sources of financing from banks and other financial institutions in the U.S. and in Taiwan; and ● financial support from the Company’s related parties and shareholders. Management’s plan is to continue to improve operations to generate positive cash flows and raise additional capital through private or public offerings, or financial support from related parties or shareholders. 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. All of these factors raise substantial doubt about the ability of the Company to continue as a going concern. The interim condensed consolidated financial statements as of March 31, 2026, and for the three months ended March 31, 2026 and 2025 have been prepared on a going concern basis and do not include any adjustments to reflect the possible future effects on the recoverability and classifications of assets or the amounts and classifications of liabilities that may result from the inability of the Company to continue as a going concern. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States of America (the “U.S. GAAP”). All significant intercompany transactions and account balances have been eliminated. These financial statements do not include all the information and footnotes required by the U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with the U.S. GAAP have been condensed or omitted consistent with Article 8 of Regulation S-X. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, in a normal recurring nature, as necessary for the fair statement of the Company’s financial position as of March 31, 2026, and results of operations and cash flows for the three months ended March 31, 2026 and 2025. The unaudited interim condensed consolidated balance sheet as of March 31, 2026 has been derived from the audited financial statements at December 31, 2025, and interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, and related notes included in the Company’s audited consolidated financial statements. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s unaudited financial statements are expressed in U.S. dollars. F- 6 Reclassifications : Certain amounts on the prior year’s condensed consolidated balance sheets, condensed consolidated statements of operations and condensed cash flows were reclassified to conform to the current-year presentation, with no effect on ending stockholders’ equity. Use of Estimates The preparation of financial statements in conformity with the U.S. GAAP that requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results. Fair Value Measurements ASC 820 “Fair Value Measurements” defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measures its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows: ● Level 1– Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available. ● Level 2– Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3– Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability. The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, restricted cash, accounts receivable, short-term investments, due from related parties, and other current assets, accrued expenses and other current liabilities, and due to related parties, approximate fair value due to their relatively short maturities. The carrying value of the Company’s short-term bank loans and convertible notes payable approximates their fair value as the terms of the borrowing are consistent with current market rates and the duration to maturity is short. Concentration of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions, but these investments may be in excess of the limit of $ 95,400 (NTD 3.0 million) covered by Taiwan Central Deposit Insurance Corporation, and the limit of $ 250,000 covered by the U.S. Federal Deposit Insurance Corporation’s (“FDIC”) insurance limits. As of March 31, 2026 and December 31, 2025, the Company had approximately nil and $ 265,521 , respectively, in cash and cash equivalent balances that were in excess of the FDIC limits. However, the Company does not anticipate any losses on excess deposits. The Company does not enter into financial instruments for hedging, trading or speculative purposes. F- 7 The Company performs ongoing credit evaluation of its customers and requires no collateral. Credit losses and allowance for unbilled receivables are provided based on a review of the collectability of accounts receivable. The Company determines the amount of allowance for doubtful accounts by examining its historical collection experience and current trends in the credit quality of its customers as well as its internal credit policies. Actual credit losses may differ from our estimates. Concentration of Clients As of March 31, 2026 and December 31, 2025, management estimated all accounts receivable balances are uncollectible. Credit loss expenses were nil for both of the three months ended March 31, 2026 and 2025. For the three months ended March 31, 2026, the Company did not generate any revenue. Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less to be cash equivalents when purchased. As of March 31, 2026 and December 31, 2025, the Company’s cash and cash equivalents amounted to $ 140,324 and $ 681,480 , respectively. Some of the Company’s cash deposits are held in financial institutions located in Taiwan where there is currently regulation mandated on obligatory insurance of bank accounts. The Company believes this financial institution is of high credit quality. Restricted Cash Restricted cash primarily consists of cash held in a reserve bank account in Taiwan. As of March 31, 2026 and December 31, 2025, the Company’s restricted cash amounted $ 0 and $ 645,505 (NTD 20.3 million), respectively. Accounts receivable and allowance for expected credit losses accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amount. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses and allowance for unbilled receivables based upon the assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of customers, current economic conditions reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers. The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the consolidated statements of income. Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Allowance balance for expected credit losses accounts were $ 616,447 and $ 614,470 as of March 31, 2026 and December 31, 2025, respectively. Convertible Notes Receivable The Company’s convertible note receivable is carried at amortized cost, net of an allowance for credit losses. Because the underlying equity is not readily convertible to cash, the conversion option is not bifurcated under ASC 815. Interest income, including any premium or discount amortization, is recognized using the effective interest method. The Company evaluates expected credit losses based on historical experience and supportable forecasts. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines is within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customers. At inception of the contract, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The following are examples of when the Company recognizes revenue based on the types of payments the Company receives. Collaborative Revenues — The Company recognizes collaborative revenues generated through collaborative research, development and/or commercialization agreements. The terms of these agreements typically include payment to the Company related to one or more of the following: non-refundable upfront license fees, development and commercial milestones, partial or complete reimbursement of research and development costs, and royalties on net sales of licensed products. Each type of payments results in collaborative revenues except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. To date, the Company has not received any royalty revenues. Revenue is recognized upon satisfaction of a performance obligation by transferring control of a good or service to the collaboration partners. F- 8 As part of the accounting for these arrangements, the Company applies judgment to determine whether the performance obligations are distinct, and develop assumptions in determining the stand-alone selling price for each distinct performance obligation identified in the collaboration agreements. To determine the stand-alone selling price, the Company relies on assumptions which may include forecasted revenues, development timelines, reimbursement rates for R&D personnel costs, discount rates and probabilities of technical and regulatory success. The Company had multiple deliverables under the 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 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 annually 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. (i) Non-refundable upfront payments If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from the related non-refundable upfront payments based on the relative standalone selling price prescribed to the license compared to the total selling price of the arrangement. The revenue is recognized when the license is transferred to the collaboration partners and the collaboration partners are able to use and benefit from the license. To date, the receipt of non-refundable upfront fees was solely for the compensation of past research efforts and contributions made by the Company before the collaborative agreements entered into and it does not relate to any future obligations and commitments made between the Company and the collaboration partners in the collaborative agreements. (ii) Milestone payments The Company is eligible to receive milestone payments under the collaborative agreement with collaboration partners based on achievement of specified development, regulatory and commercial events. Management evaluated the nature of the events triggering these contingent payments, and concluded that these events fall into two categories: (a) events which involve the performance of the Company’s obligations under the collaborative agreement with collaboration partners, and (b) events which do not involve the performance of the Company’s obligations under the collaborative agreement with collaboration partners. The former category of milestone payments consists of those triggered by development and regulatory activities in the territories specified in the collaborative agreements. Management concluded that each of these payments constitute substantive milestone payments. This conclusion was based primarily on the facts that (i) each triggering event represents a specific outcome that can be achieved only through successful performance by the Company of one or more of its deliverables, (ii) achievement of each triggering event was subject to inherent risk and uncertainty and would result in additional payments becoming due to the Company, (iii) each of the milestone payments is non-refundable, (iv) substantial effort is required to complete each milestone, (v) the amount of each milestone payment is reasonable in relation to the value created in achieving the milestone, (vi) a substantial amount of time is expected to pass between the upfront payment and the potential milestone payments, and (vii) the milestone payments relate solely to past performance. Based on the foregoing, the Company recognizes any revenue from these milestone payments in the period in which the underlying triggering event occurs. (iii) Multiple Element Arrangements The Company evaluates multiple element arrangements to determine (1) the deliverables included in the arrangement and (2) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. This evaluation involves subjective determinations and requires management to make judgments about the individual deliverables and whether such deliverables are separate from other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (i) the delivered item(s) has value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially within its control. In assessing whether an item under a collaboration has standalone value, the Company considers factors such as the research, manufacturing, and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. The Company also considers whether its collaboration partners can use the other deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s), and whether there are other vendors that can provide the undelivered element(s). The Company recognizes arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria in ASC 606 are satisfied for that particular unit of accounting. In the event that a deliverable does not represent a separate unit of accounting, the Company recognizes revenue from the combined unit of accounting over the Company’s contractual or estimated performance period for the undelivered elements, which is typically the term of the Company’s research and development obligations. If there is no discernible pattern of performance or objectively measurable performance measures do not exist, then the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected to complete its performance obligations. Conversely, if the pattern of performance in which the service is provided to the customer can be determined and objectively measurable performance measures exist, then the Company recognizes revenue under the arrangement using the proportional performance method. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line method or proportional performance method, as applicable, as of the period ending date. F- 9 At the inception of an arrangement that includes milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether: (1) the consideration is commensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from its performance to achieve the milestone, (2) the consideration relates solely to past performance and (3) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone and the level of effort and investment required to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether a milestone satisfies all of the criteria required to conclude that a milestone is substantive. Milestones that are not considered substantive are recognized as earned if there are no remaining performance obligations or over the remaining period of performance, assuming all other revenue recognition criteria are met. (iv) Royalties and Profit Sharing Payments Under the collaborative agreement with the collaboration partners, the Company is entitled to receive royalties on sales of products, which is at certain percentage of the net sales. The Company recognizes revenue from these events based on the revenue recognition criteria set forth in ASC 606. Based on those criteria, the Company considers these payments to be contingent revenues, and recognizes them as revenue in the period in which the applicable contingency is resolved. Revenues Derived from Research and Development Activities Services (Also known as the Contract Development & Manufacturing Organization Services (“CDMO”)) — Revenues related to research and development and regulatory activities are recognized when the related services or activities are performed, in accordance with the contract terms. The Company typically has only one performance obligation at the inception of a contract, which is to perform research and development services. The Company may also provide its customers with an option to request that the Company provides additional goods or services in the future, such as active pharmaceutical ingredient, API, or IND/NDA/ANDA/510K submissions. The Company evaluates whether these options are material rights at the inception of the contract. If the Company determines an option is a material right, the Company will consider the option a separate performance obligation. If the Company is entitled to reimbursement from its customers for specified research and development expenses, the Company accounts for the related services that it provides as separate performance obligations if it determines that these services represent a material right. The Company also determines whether the reimbursement of research and development expenses should be accounted for as revenues or an offset to research and development expenses in accordance with provisions of gross or net revenue presentation. The Company recognizes the corresponding revenues or records the corresponding offset to research and development expenses as it satisfies the related performance obligations. The Company then determines the transaction price by reviewing the amount of consideration the Company is eligible to earn under the contracts, including any variable consideration. Under the outstanding contracts, consideration typically includes fixed consideration and variable consideration in the form of potential milestone payments. At the start of an agreement, the Company’s transaction price usually consists of the payments made to or by the Company based on the number of full-time equivalent researchers assigned to the project and the related research and development expenses incurred. The Company does not typically include any payments that the Company may receive in the future in its initial transaction price because the payments are not probable. The Company would reassess the total transaction price at each reporting period to determine if the Company should include additional payments in the transaction price. The Company receives payments from its customers based on billing schedules established in each contract. Upfront payments and fees may be recorded as advances from customers upon receipt or when due, and may require deferral of revenue recognition for a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the right of the Company to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customers and the transfer of the promised goods or services to the customers will be one year or less. Long-Term Equity Investment The Company acquires long-term investments to promote business and strategic objectives. The accounting treatments are as follows: ● Marketable equity investments: The Company measures marketable equity securities at fair value at each reporting date, with unrealized gains and losses recognized in net income in accordance with ASC 321. Fair value is determined based on quoted market prices or other observable inputs. F- 10 ● Non-marketable equity investments: When the equity method does not apply, non-marketable equity investments are accounted for at cost, adjusted for observable price changes in orderly transactions for identical or similar investments and for impairments, if applicable. ● Equity method investments: Investments in which the Company has the ability to exercise significant influence, but not control, over the investee, are accounted for using the equity method. The Company recognizes its proportionate share of the investee’s income or loss in gains (losses) on equity investments on a monthly basis. Stock-based Compensation The Company measures expense associated with all employee stock-based compensation awards using a fair value method and recognizes such expense in the consolidated financial statements on a straight-line basis over the requisite service period in accordance with ASC 718 “Compensation-Stock Compensation”. Total director, officer, and employee stock-based compensation expenses were $ 69,171 and $ 0 for the three months ended March 31, 2026 and 2025, respectively. The Company accounted for stock-based compensation to non-employees in accordance with ASC 718 “Compensation-Stock Compensation” and ASC 505-50 “Equity-Based Payments to Non-Employees” which requires that the cost of services received from non-employees is measured at fair value at the earlier of the performance commitment date or the date service is completed and recognized over the period the service is provided. Total non-employee stock-based compensation expenses were $ 106,287 and $ 48,773 for rent for the three months ended March 31, 2026 and 2025, and $ 611,916 and nil for consulting services for the three months ended March 31, 2026 and 2025. Loss Per Share of Common Stock The Company calculates net loss per share in accordance with ASC 260, “Earnings per Share”. Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. Diluted earnings per share excludes all dilutive potential shares if their effect is anti-dilutive. Three Months Ended March 31, 2026 2025 Numerator: Net loss attributable to ABVC’s common stockholders $ ( 1,560,242 ) $ ( 842,075 ) Denominator: Weighted-average shares outstanding – Basic & Diluted 25,448,516 14,968,232 Loss per share -Basic & Diluted $ ( 0.06 ) $ ( 0.06 ) Commitments and Contingencies The Company has adopted ASC 450 “Contingencies” subtopic 20, in determining its accruals and disclosures with respect to loss contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available before financial statements are issued or are available to be issued indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in financial statements when it is at least reasonably possible that a material loss could be incurred. Convertible Notes Payable The Company accounts for its convertible instruments in accordance with ASC 470-20, as amended by ASU 2020-06. Under this guidance, convertible notes are generally recognized as a single liability on the Balance Sheet. The Company does not separate a conversion feature from the host debt instrument unless the feature must be separately accounted for as a derivative under ASC 815. Debt issuance costs, if any, are deferred and amortized to interest expense over the term of the note. Interest expense is recognized based on the contractual rate and includes the amortization of debt discounts and issuance costs. F- 11 Foreign-currency Transactions For the Company’s subsidiaries in Taiwan, the foreign-currency transactions are recorded in New Taiwan Dollars (“NTD”) at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into NTD, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under the Statements of Changes in Stockholders’ Equity. Segment Reporting ASC 280 “Segment Reporting” requires public companies to report financial and descriptive information about their reportable operating segments. The Company uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Group’s CODM was identified as the Chief Executive Officer and Chairman of the Board, who reviews consolidated results at a consolidated level when making decisions about allocating resources and assessing performance of the Group. The Group believes it has only one operating segment and reportable segment, which is biotechnology to fulfill unmet medical needs and focuses on the development of new drugs and medical devices derived from plants. The Company does not distinguish revenues, costs or expenses between markets in its internal reporting, and reports costs and expenses by nature as a whole. Hence, the Company has only one reportable segment. The following table shows revenues and long-lived assets by geographic areas. For The Three-Month Periods Ended March 31 2026 2025 Revenue $ - $ - Revenue from entities in Taiwan - - Revenue from entities in the U.S. Total $ - $ - Property and equipment, net located in March 31, 2026 December 31, 2025 In Taiwan $ 8,091,300 $ 8,098,429 In USA 4,731,685 4,736,980 Total $ 12,822,985 $ 12,835,409 The following table provides a reconciliation of total segment gross profit to the Company’s loss before provision for income tax: For The Three-Month Periods Ended March 31 2026 2025 Segment Gross Profit (Loss) $ - $ - Less: Selling, general and administrative expenses 751,998 615,371 Research and development expenses 33,100 28,861 Stock-based compensation 787,374 48,773 Add (Less): Interest income 3,765 19,071 Interest expense ( 49,377 ) ( 222,967 ) Operating sublease income 12,000 12,000 Gain (loss) on foreign exchange changes ( 51,156 ) ( 9,912 ) Loss on investment in equity securities ( 31,416 ) ( 50,877 ) Other income, net ( 1,281 ) 1,500 Loss before provision for income tax $ ( 1,689,937 ) $ ( 944,190 ) F- 12 Recent Accounting Pronouncements In accordance with Staff Accounting Bulletin No. 74 (SAB 74), the Company evaluates the impact of newly issued accounting standards on its financial statements. The following standards have been issued but are not yet effective: In November 2024, the FASB issued ASU No. 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40). The ASU requires disclosure of specified information about certain costs and expenses. This includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The ASU is effective on a prospective or retrospective basis for annual reporting period beginning after December 15, 2026, and interim reporting period beginning after December 15, 2027. Early adoption is permitted. This ASU will likely result in the required additional disclosures and the Company expects no material impact on consolidated financial statements of adopting. 4. COLLABORATIVE AGREEMENTS Collaborative agreement with ForSeeCon Eye Corporation, a related party On March 25, 2024, the Company and BioFirst each entered into a twenty-year, global definitive licensing agreement (the “FEYE Licensing Agreement”) with ForSeeCon Eye Corporation, a company registered in the British Virgin Islands (“FEYE”) for the products in the Company and BioFirst’s Ophthalmology pipeline, including Vitargus (the “Vitargus Products”). The license covers Vitargus Products’ clinical trial, registration, manufacturing, supply, and distribution rights; FEYE also has the rights to sublicense or partner with a third party to develop the Licensed Products. As per each of the respective FEYE Licensing Agreements, each of the Company and BioFirst shall receive a total licensing fee of $ 33.5 million, composed of an upfront payment of $ 30 million, which can instead be paid with 5 million shares of FEYE stock at $ 6 per share within 30 days after the execution of the FEYE Licensing Agreement, and a $ 3.5 million cash milestone payment, due 30 days upon completion of next round fundraising. Additionally, each of the Company and BioFirst are eligible to receive royalties of 5 % of net sales. As of March 31, 2025, the Company received 5 million 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 entered into an amendment (the “Amendment”) to the Licensing Agreement with FEYE, pursuant to which the Company and BioFirst have agreed to allow FEYE to pay the second milestone payment in the amount of $ 3.5 million per Licensing Agreement, incrementally (such as $ 100,000 ), at any given time, rather than in one lump sum. There was no cash receipt in the three months periods ended March 31, 2026 and 2025, respectively. Collaborative agreement with OncoX BiopPharma, Inc., a related party 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 “Lung Cancer Products”), within North America for 20 years (the “April 2024 Oncox Agreement”). In consideration thereof, Oncox shall pay ABVC $ 6.25 million (or 1.25 million Oncox shares valued at $ 5 per share) 30 days after entering into the 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 April 2024 Oncox Agreement, from the first commercial sale of the Lung Cancer 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. During the year ended December 31, 2024, the Company received in cash and recognized revenue of $ 200,000 pursuant to the agreement. At the time of transferring the license, Rgene Corporation also received 1.25 million OncoX shares but did not recognize such licensing revenue since the fair value of Oncox stock is uncertain. There was no cash receipt in the three months periods ended March 31, 2026 and 2025, respectively. On May 8, 2024, the Company entered into a definitive agreement with 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 (the Pancreatic Product), within a certain territory, specified as 50 % of the Worldwide Markets for 20 years (the “May 8, 2024 Oncox Agreement”). In consideration thereof, Oncox shall pay ABVC a total of $ 6.25 million (or 1.25 million Oncox shares valued at $ 5 per share) within 30 days of entering into the May 8, 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 8, 2024 Oncox Agreement, from the first commercial sale of the Pancreatic 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. At the time of transferring the license, Rgene Corporation also received 1.25 million OncoX shares but did not recognize such licensing revenue since the fair value of Oncox stock is uncertain. There was no cash receipt in the three months periods ended March 31, 2026 and 2025, respectively. F- 13 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 $ 6.25 million (or 1.25 million Oncox shares valued at $ 5 per share) 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. At the time of transferring the license, the Company and BioLite also each received 1.25 million OncoX shares but did not recognize such licensing revenue since the fair value of Oncox stock is uncertain. There was no cash receipt in the three months periods ended March 31, 2026 and 2025, respectively. 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 “MS Products”), within a certain territory, specified as 50 % of the Worldwide Markets for 20 years (the “May 23, 2024 Oncox Agreements”). In consideration thereof, Oncox shall pay each licensor a total of $ 6.25 million (or 1.25 million Oncox shares valued at $ 5 per share) 30 days after entering the May 23, 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 MS Product in the noted territory, which remains uncertain. Oncox may use its revenue to fund the licensing fees. At the time of transferring the license, the Company and BioLite also each received 1.25 million OncoX shares but did not recognize such licensing revenue since the fair value of Oncox stock is uncertain. There was no cash receipt in the three months periods ended March 31, 2026 and 2025, respectively. Above mentioned price of OncoX’s shares was determined through private negotiations between the parties; no third-party valuation was completed. 5. PROPERTY AND EQUIPMENT, AND PREPAMENT FOR ASSET ACQUISITION Property and Equipment The Company has land, offices and labs located in Taiwan, and a GMP manufacturing facility in Fremont, CA. Property and equipment as of March 31, 2026 and December 31, 2025 are summarized as follows: March 31, 2026 December 31, 2025 Land $ 12,680,110 $ 12,685,667 Buildings and leasehold improvements 2,222,221 2,224,082 Machinery and equipment 1,133,897 1,135,602 Office equipment 167,576 170,155 16,203,804 16,215,506 Less: accumulated depreciation ( 3,380,819 ) ( 3,380,097 ) Property and equipment, net $ 12,822,985 $ 12,835,409 Depreciation expenses were $ 5,783 and $ 7,021 for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, the land with book value amounted to approximately $ 5,004,317 and $ 4,221,388 , respectively, were pledged for obtaining bank loan (see Notes 9 Bank loans). F- 14 Acquisition of land in Puli Township, Taiwan In March 2024, AiBtl issued 1,534,000 AiBtl’s common stocks to acquire farmland in Taiwan, which land will be used for developing health related businesses. However, upon the closing of the transaction, both parties are aware of such Taiwan’s legal restrictions prohibiting foreign entities directly owning farmland. In August 2024, the Company incorporated a controlling subsidiary, Yunzhiyi, to hold the title of the land upon government’s approval. On March 31, 2025, AiBtl and the landowners executed the Nominee Holding Agreement, Land Lease Agreement, and Consulting Agreement, under the witness of and confirmed by a legal counsel in Taiwan, in which the landowners unconditionally grant the full legal rights to the land to AiBtl before the completion of the title transfer. Based on the execution of the agreement, AiBtl recognized $ 7,670,000 ($ 5 per share of AiBtl’s common stock) of land on its balance sheet. To further secure the ownership of land, the board of AiBtl authorized Ms. Jiang in June 2025 to temporarily hold the land title until the administrative procedures are finalized. The title was transferred to Ms. Jiang later that month, and AiBtl recorded $ 5,794 in acquisition costs associated with the transaction. As of the reporting date, government review of the transfer of land title to Yun Zhi Yi is pending completion. Acquisition of land in Taoyuan City, Taiwan On July 15, 2025, the Company entered into a definitive agreement with 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, and owns over 10 % of the Company’s issued and outstanding shares of common stock. 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. The transaction is closed on the same day, and the common stock warrants and restricted shares are issued on July 15, 2025 and July 16, 2025, respectively. The Company recognized $ 3,857,975 as the fair value of the issued common stocks and $ 798,486 for the fair value of the stock warrants based on the Black-Scholes valuation model, as the cost of the land, in total of $ 4,656,461 , and $ 500,000 liability (included in Due to Related Parties – See Note 10) on its balance sheet. 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 July 16, 2025, the Company issued 200,000 shares at $ 1.65 per share to Shuling as prepayment for the first-year service. For the three months ended March 31, 2026, the Company recognized $ 82,500 consulting expense, with $ 96,250 remaining prepaid expense balance as of March 31, 2026. Due to the administrative requirements governing title transfers in Taiwan, on February 24, 2026, to further secure the Company’s ownership interest in the Land, the Company and Shuling Jiang entered into a Nominee Holding and Transitional Arrangement Agreement. Pursuant to the agreement, the Land remains registered under the Landholder pending completion of the applicable regulatory review, and the Landholder is prohibited from selling, transferring, pledging, or otherwise disposing of the Property without the Company’s prior written consent. The final holding structure will be determined in accordance with Taiwan’s legal and regulatory requirements. Prepayment for asset acquisition The prepayment for asset acquisition represents the value of 370,000 shares issued at the price of $ 1.87 to Zhong Hui Lian He Ji Tuan, Ltd. (the “Zhonghui”), in exchange for 20 % ownership of a property being developed in Chengdu, China. The property is in construction now and expected to be ready for use before the end of 2026. F- 15 6. LONG-TERM INVESTMENTS (1) The ownership percentages of each investee are listed as follows: Ownership percentage March 31, December 31, Accounting Name of investees 2026 2025 treatments Braingenesis Biotechnology Co., Ltd. 0.17 % 0.17 % Cost Method Genepharm Biotech Corporation* 0.39 % 0.67 % Cost Method BioHopeKing Corporation 5.90 % 5.90 % Cost Method ForSeeCon Eye Corporation (see Note 10) 19.78 % 19.78 % Cost Method BioFirst Corporation 18.68 % 18.68 % Equity Method OncoX BioPharma, Inc. (see Note 10) 24.97 % 24.97 % Equity Method Rgene Corporation 37.00 % 37.00 % Equity Method BioLite Japan K.K. 49.00 % 49.00 % Equity Method * This company was acquired by Canal Biotech Corporation Inc., and upon completion of the acquisition, the Company’s ownership percentage is determined to be 0.39 % The Company’s stock is in the process of replacement with the stock of the acquired company and the ownership percentage is subject to change. (2) The extent the investee relies on the company for its business is summarized as follows: Name of investees The extent the investee relies on the Company for its business Braingenesis Biotechnology Co., Ltd. No specific business relationship Genepharm Biotech Corporation No specific business relationship BioHopeKing Corporation Collaborating with the Company to develop and commercialize drugs BioLite Japan K.K. The Company’s joint venture noncontrolling subsidiary perform research and development activities and explore business opportunities in Japan ForSeeCon Eye Corporation Collaborating with the Company to develop and commercialize ophthalmic medical devices (referring to Note 4, Collaborative Agreements) BioFirst Corporation Loans provided to the investee and provides research and development support service OncoX BioPharma, Inc. Collaborating with the Company to develop and commercialize single-herb botanical drug for treatment of certain diseases (referring to Note 4, Collaborative Agreements) Rgene Corporation Collaborating with the Company to develop and commercialize drugs F- 16 (3) Long-term investment mainly consists of the following: March 31, 2026 December 31, 2025 Non-marketable Cost Method Investments, net Braingenesis Biotechnology Co., Ltd. $ 6,904 $ 7,014 Genepharm Biotech Corporation 21,079 21,727 ForSeeCon Eye Corporation (d) - - BioHopeKing Corporation - - Subtotal 27,983 28,741 Equity Method Investments, net BioFirst Corporation (a) 1,267,191 1,298,038 Rgene Corporation (b) 550,596 551,686 BioLite Japan K.K. (BioLite JP) (c) - - OncoX BioPharma, Inc. (e) - - Total $ 1,845,770 $ 1,878,465 (a) BioFirst Corporation (the “BioFirst”): The Company holds an equity interest in BioFirst Corporation, accounting for its equity interest using the equity method to accounts for its equity investment as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method. As of March 31, 2026 and December 31, 2025, the Company owns 18.68 % and 18.68 % common stock shares of BioFirst, respectively. The Company made a prepayment for equity investment in BioFirst to purchase additional shares to be issued by BioFirst in the aggregate amount of $ 2,688,578 , recorded as prepayment for long-term investments as of December 31, 2022. On July 19, 2023, the Company successfully completed the registration process for this investment. The initial prepayment was $ 1,895,556 , which is a portion of the prepayment as of December 31, 2022, and was converted into 994,450 shares of BioFirst stock. As of March 31, 2026 and December 31, 2025, the amount of prepayment for long-term investments in Biofirst are both $ 1,124,842 . (b) Rgene Corporation (the “Rgene”) As described in Note 4, the Company acquired 26.65 % of Rgene’s outstanding common shares since 2018 through multiple collaborative agreements, and has been accounting this equity investment with equity method as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method. Further, as disclosed in Note 10 Related Party Transactions, the Company entered a convertible loan agreement with Rgene in 2022 and has been working with Rgene to obtain approval for the Company to exercise the conversion from Department of Investment Review in Taiwan, a government agency reviews foreign investors conducting investment in Taiwan. In May 2024, the conversion request for the conversion was approved but the Company was not informed by Rgene until April 2025. The Company determined that the impact to the financial statements is immaterial and assumed the conversion was incurred on January 1, 2025. After the conversion, the Company owns 37 % of outstanding shares of Rgene. (4) Disposition of long-term investment During the three-month periods ended March 31, 2026 and 2025, there is no disposition of long-term investment. (5) Loss on investment in equity securities The components of loss on investment in equity securities for each period were as follows: Three Months Ended March 31, 2026 2025 Share of equity method investee losses $ ( 31,416 ) $ ( 50,877 ) F- 17 (c) ForSeeCon Eye Corporation (FEYE) FEYE is a private company registered in the British Virgin Islands, focusing on the field of diagnosis and treatment of eye disorders, with its main product of Vitargus. The Company granted FEYE certain licensed products in exchange for FEYE ownership. See Note 4 for the details of such transactions. In February 2026, The Company made a prepayment for equity investment in FEYE to purchase additional 136,000 shares to be issued by FEYE in the aggregate amount of $ 680,000 , recorded as prepayment for long-term investments as of March 31, 2026. (d) OncoX BioPharma, Inc. (OncoX) OncoX is a private company registered in the British Virgin Islands, focusing on oncology trials and drug development across Asia-Pacific. The Company granted OncoX certain licensed products in exchange for OncoX’s ownership. See Note 4 for the details of such transactions. 7. CONVERTIBLE NOTES PAYABLE Lind Notes Payable On November 17, 2023, the Company entered another securities purchase agreement with Lind, pursuant to which the Company issued Lind a secured, convertible note (the “2 nd Lind Note”) in the principal amount of $ 1,200,000 , for a purchase price of $ 1,000,000 , that is convertible into shares of the Company’s common stock at a conversion price, which shall be the lesser of (i) $ 3.50 and (ii) 90 % of the average of the three lowest VWAPs during the 20 trading days prior to conversion. The 2 nd Lind Note shall be due and payable on May 19, 2025 and bears no interest. The Company may prepay all, but not less than all, outstanding principal amount prior to maturity, and Lind shall have the right to convert up to one third of the principal amount when the Company prepays. 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 Lind Note, in addition to any other remedies under the Note or the other transaction documents. Lind also received a 5-year common stock purchase warrant to purchase up to 1,000,000 shares of the Company’s common stock at an initial exercise price of $ 2 per share for a period of 5 years. The warrants were valued using the Black-Scholes model. The fair value of the warrants was determined to be $ 480,795 , which was recorded to debt discount. An amendment was filed with the SEC on February 29, 2024 to disclose that due to Nasdaq requirements, the parties entered into an amendment to the Note, pursuant to which the conversion price shall have a floor price of $ 1.00 . Additionally, the amendment requires the Company to make a cash payment to Lind if in connection with a conversion, the conversion price is deemed to be the floor price. During the year ended December 31, 2024, Lind converted $ 800,000 of 2 nd Lind Note principal amounts into the Company’s common stocks. Refer to the common stock issuance details in Note 12, Equity. As of April 1, 2025, Lind has converted the remaining $ 400,000 principal balance into the Company’s common stocks. On January 17, 2024, the Company entered another securities purchase agreement with Lind, pursuant to which the Company issued Lind a secured, convertible note (the “3 rd Lind Note”) in the principal amount of $ 1,000,000 , for a purchase price of $ 833,333 , that is convertible into shares of the Company’s common stock at a conversion price, which shall be the lesser of (i) $ 3.50 and (ii) 90 % of the average of the three lowest VWAPs during the 20 trading days prior to conversion. The 3 rd Lind Note shall be due and payable on July 17, 2025 and bears no interest. The Company may prepay all, but not less than all, outstanding principal amount prior to maturity, and Lind shall have the right to convert up to one third of the principal amount when the Company prepays. 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 Lind Note, in addition to any other remedies under the Note or the other transaction documents Lind also received a 5 -year, common stock purchase warrant to purchase up to 1,000,000 shares of the Company’s common stock at an initial exercise price of $ 2 per share. The warrants were valued using the Black-Scholes model. The fair value of the warrants was determined to be $ 394,071 , which was recorded to debt discount. An amendment was filed with the SEC on February 29, 2024 to disclose that due to Nasdaq requirements, the parties entered into an amendment to the Note, pursuant to which the conversion price shall have a floor price of $ 1.00 . Additionally, the amendment requires the Company to make a cash payment to Lind if in connection with a conversion, the conversion price is deemed to be the floor price. F- 18 On March 3, 2025, April 1, 2025, May 14, 2025, June 5, 2025, and July 9, 2025, Lind converted $ 1,000,000 ($ 200,000 in each conversion) principal balance on 3 rd Lind Note into 1,000,000 shares of the Company’s common stocks. The 3 rd Lind Note balance was fully converted by July 9, 2025. In connection with above three Lind Note offerings, the Company and its subsidiaries: BioKey, BioLite, Biolite BVI, and American BriVision, jointly and severally guaranteed all of the obligations of the Company in connection with the offering with certain collateral, as set forth in the related transaction documents. On May 22, 2024, November 19, 2024, January 9, 2025, July 1, 2025, and January 20, 2026 Lind exercised 1,000,000 , 500,000 , 1,029,167 , 500,000 , and 102,000 of the existing warrants to purchase shares of Common Stock at a reduced exercise price of $ 0.75 , $ 0.42 , $ 0.40 , $ 1.0 and $ 1.0 per share, respectively. Refer to the details in Note 12, Equity. Total interest expenses in connection with the above three Lind Notes were $ 0 and $ 209,372 for the three months ended March 31, 2026 and 2025, respectively. Other Convertible Notes Payable On November 1, 2024 and November 5, 2024, the Company’s subsidiary, AiBtl, issued two convertible notes payable, each with a principal amount of $ 30,000 to two separate individuals, for total consideration of $ 60,000 . Each note has a 1 -year term and an implied annual discount rate of 6.89 %. These convertible notes bear 0 % interest rate and are convertible by the holders into AiBtl’s common stock at $ 5 per share at any time before maturity. AiBtl reserves the right to repurchase the note in full at any time before maturity. AiBtl and the investors mutually agreed to renewed these convertible notes for another year, expiring on November 1, 2026 and November 5, 2026, respectively. The convertible notes payable is accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options. The Company evaluated the conversion feature and determined that it qualifies for equity classification as it meets the “fixed-for-fixed” criteria. The proceeds from the issuance were allocated to the present value of the liability component in aggregate for $ 56,132 , and to debt discount for $ 3,867 . The debt discount is recorded in additional paid-in capital in the statement of change in equity. The debt discount is being amortized over the 1 -year term using the effective interest method. During the three months ended March 31, 2026 and 2025, the Company recognized $ 0 and $ 984 in interest expense related to the amortization of the debt discount. On April 5, 2025, AiBtl issued a convertible note payable with a principal amount of $ 9,010 to an individual investor, for total consideration of $ 9,010 . The note has a 1 -year term and an implied annual discount rate of 6.89 %. with a 0 % stated interest rate and is convertible by the holders into AiBtl’s common stock at $ 5 per share at any time before maturity. AiBtl reserves the right to repurchase the note in full at any time before maturity. On December 3, December 8, and December 26, 2025, AiBtl issued three convertible notes payable to an individual investor, with a principal amount of $ 240,000 , $ 100,000 , and $ 150,000 , respectively, for total consideration equal to the principal amounts. These notes, with identical terms, have a 1 -year term and state annual interest rate of 20 %, and are convertible by the holders into AiBtl’s common stock at $ 7.5 per share at any time before maturity. AiBtl reserves the right to repurchase the note in full at any time before maturity. For the three months ended March 31, 2026, the Company recognized $ 24,501 in total interest expense associated with the aforementioned convertible notes. Convertible Notes Payable – Related Party On July 8, 2025, AiBtl issued a convertible note payable with a principal amount of $ 150,000 to an employee of the Company, a related party, for total consideration of $ 150,000 . The note has a 1 -year term with a 0 % interest rate and is convertible by the holders into AiBtl’s common stock at $ 10 per share at any time before maturity. AiBtl reserves the right to repurchase the note in full at any time before maturity. This note was repaid in December 2025. On December 8 and December 30, 2025, AiBtl issued two convertible notes payable with principal amounts of $ 150,000 and $ 90,000 , respectively, to an employee of the Company, a related party, for total consideration equal to the principal amounts. The notes have a 1 -year term with a 20 % interest rate and are convertible by the holders into AiBtl’s common stock at $ 7.5 per share at any time before maturity. AiBtl reserves the right to repurchase the note in full at any time before maturity. For the three months ended March 31, 2026, the Company recognized $ 1,200 in total interest expense associated with the aforementioned convertible notes. F- 19 The carrying amounts of the liability component are summarized as follows: March 31, 2026 Issuance Entity Issuance Date Maturity Date Principal Amount at Issuance Stated Interest Rate Conversion Price Common Stock to be converted Principal Amount at Balance Sheet Date Carrying Value Fair Value Other Note AiBtl November 1, 2024 November 1, 2026 $ 30,000 0 % $ 5.00 AiBtl $ 30,000 30,000 30,000 Other Note AiBtl November 5, 2024 November 5, 2026 30,000 0 % $ 5.00 AiBtl 30,000 30,000 30,000 Other Note AiBtl April 6, 2025 April 6, 2026 9,010 0 % $ 5.00 AiBtl 9,010 9,010 9,010 Other Note AiBtl December 3, 2025 December 3, 2026 240,000 20 % $ 7.50 AiBtl 240,000 240,000 240,000 Other Note AiBtl December 8, 2025 December 8, 2026 100,000 20 % $ 7.50 AiBtl 100,000 100,000 100,000 Other Note AiBtl December 26, 2025 December 26, 2026 150,000 20 % $ 7.50 AiBtl 150,000 150,000 150,000 $ 559,010 $ 559,010 $ 559,010 $ 559,010 March 31, 2026 Issuance Entity Issuance Date Maturity Date Principal Amount at Issuance Stated Interest Rate Conversion Price Common Stock to be converted Principal Amount at Balance Sheet Date Carrying Value Fair Value Convertible note – related party AiBtl December 8, 2025 December 8, 2026 $ 150,000 20 % $ 7.50 AiBtl $ 150,000 $ 150,000 $ 150,000 Convertible note – related party AiBtl December 30, 2025 December 30, 2026 90,000 20 % $ 7.50 AiBtl 90,000 90,000 90,000 $ 240,000 $ 240,000 $ 240,000 $ 240,000 December 31, 2025 Issuance Entity Issuance Date Maturity Date Principal Amount at Issuance Stated Interest Rate Conversion Price Common Stock to be converted Principal Amount at Balance Sheet Date Carrying Value Fair Value Other Note AiBtl November 1, 2024 November 1, 2025 * $ 30,000 0 % $ 5.00 AiBtl $ 30,000 30,000 30,000 Other Note AiBtl November 5, 2024 November 5, 2025 * 30,000 0 % $ 5.00 AiBtl 30,000 30,000 30,000 Other Note AiBtl April 6, 2025 April 6, 2026 9,010 0 % $ 5.00 AiBtl 9,010 9,010 9,010 Other Note AiBtl December 3, 2025 December 3, 2026 240,000 20 % $ 7.50 AiBtl 240,000 240,000 240,000 Other Note AiBtl December 8, 2025 December 8, 2026 100,000 20 % $ 7.50 AiBtl 100,000 100,000 100,000 Other Note AiBtl December 26, 2025 December 26, 2026 150,000 20 % $ 7.50 AiBtl 150,000 150,000 150,000 $ 559,010 $ 559,010 $ 559,010 $ 559,010 December 31, 2025 Issuance Entity Issuance Date Maturity Date Principal Amount at Issuance Stated Interest Rate Conversion Price Common Stock to be converted Principal Amount at Balance Sheet Date Carrying Value Fair Value Convertible note – related party AiBtl December 8, 2025 December 8, 2026 $ 150,000 20 % $ 7.50 AiBtl $ 150,000 $ 150,000 $ 150,000 Convertible note – related party AiBtl December 30, 2025 December 30, 2026 90,000 20 % $ 7.50 AiBtl 90,000 90,000 90,000 $ 240,000 $ 240,000 $ 240,000 $ 240,000 F- 20 8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following as of the periods indicated: March 31, December 31, 2026 2025 Accrued research and development expense (1) $ 1,741,083 $ 1,754,083 Accrued directors and officers (owners) compensation 1,358,037 1,358,293 Cash portion of the Lind Note repayments 500,000 492,376 Accrued compensation and employee benefits 31,391 86,744 Others 523,853 470,133 Total $ 4,154,364 $ 4,161,629 (1) Accrued research and development expense represents the amount due to outside contracted services for manufacturing and process development. 9. SHORT-TERM LOANS (1) Short-term loans consists of the following: March 31, December 31, 2026 2025 Cathay United Bank $ 58,737 $ 89,512 CTBC Bank - 636,000 Other individual 30,000 30,000 Total $ 88,737 $ 755,512 Cathay United Bank On June 28, 2016, BioLite Taiwan and Cathay United Bank entered into a one-year bank loan agreement (the “Cathay United Loan Agreement”) in a credit limit amount of NTD 7.5 million, equivalent to $ 228,750 . The term started June 28, 2016 with maturity date at June 28, 2017 . The loan balance bears interest at a floating rate of prime rate plus 1.31 %. The prime rate is based on the term deposit saving interest rate of Cathay United Bank. The Company renews the agreement with the bank every year, and the next renewal date is September 6, 2026. As of March 31, 2026 and December 31, 2025, the effective interest rates per annum was 2.99 % and 2.99 %, respectively. The loan is collateralized by the building and improvement of BioLite Taiwan, and is also personal guaranteed by the Company’s chairman. During the three months ended March 31, 2026, the Company made payments of the loan in total of NTD 938,283 , equivalent to $ 29,650 . Interest expenses were $ 597 and $ 1,470 for the three months ended March 31, 2026 and 2025, respectively. CTBC Bank On June 12, 2017 and July 19, 2017, BioLite Taiwan and CTBC Bank entered into two short-term saving secured bank loan agreements (the “CTBC Loan Agreements”) in a credit limit amount of NTD 10 million, equivalent to $ 327,500 , and NTD 10 million, equivalent to $ 327,500 , respectively. Both two loans with the same maturity date on January 19, 2018 . In February 2018, BioLite Taiwan combined two loans and extended the loan contract with CTBC for one year . The Company renews the agreement with the bank every six months, and the next renewal date is July 10, 2026. The loan balances bear interest at a fixed rate of 2.5 % per annum, and is secured by the money deposited in a savings account with the CTBC Bank. This loan was also personal guaranteed by the Company’s chairman and BioFirst. During the year ended December 31, 2020, BioLite Taiwan opened a TCD account with CTBC bank to guarantee the loan going forward. During the three months ended March 31, 2026, the Company paid off the loan in total of NTD 20,000,000 , equivalent to $ 632,000 . Interest expenses were $ 3,593 and $ 3,761 for the three months ended March 31, 2026 and 2025, respectively. F- 21 Other individual – Third party On March 21, 2024, the Company issued an unsecured promissory note to a third party for the proceeds of $ 30,000 . The note bears interest rate of 12 % per annum and matures on March 21, 2025 , or upon the occurrence of an event of default. The promissory note was extended for another year and matures on March 21, 2027, with the same terms. Interest expenses were $ 888 and $ 888 for the three months ended March 31, 2026 and 2025, respectively. 10. RELATED PARTIES TRANSACTIONS The related parties of the company with whom transactions are reported in these financial statements are as follows: Name of entity or Individual Relationship with the Company and its subsidiaries BioFirst Corporation (the “BioFirst”) Entity controlled by controlling beneficiary shareholder of YuanGene BioFirst (Australia) Pty Ltd. (the “BioFirst (Australia)”) 100% owned by BioFirst; Entity controlled by controlling beneficiary shareholder of YuanGene Rgene Corporation (the “Rgene”) Shareholder of the Company; Entity controlled by controlling beneficiary shareholder of YuanGene; the Chairman of Rgene is Mr. Tsung-Shann Jiang GenePharm Inc. (the “GenePharm”) Dr. George Lee, Board Director of Biokey, is the Chairman of GenePharm. The Jiangs Mr. Tsung-Shann Jiang, the controlling beneficiary shareholder of the Company and Rgene, the Chairman and CEO of the BioLite Holding Inc. and BioLite Inc. and the President and a member of board of directors of BioFirst Ms. Shuling Jiang, is the Chairman of Keypoint; and a member of board of directors of the Company and BioLite Inc, and a member of board of directors of BioFirst; a director and beneficial owner of more than 10% of the ABVC’s outstanding common stock Mr. Eugene Jiang is Mr. and Ms. Jiang’s son. Mr. Eugene Jiang is the chairman, and majority shareholder of the Company and a member of board of directors of BioLite Inc. Mr. Eugene Jiang is a member of board of directors of BioFirst. Mr. Chang-Jen Jiang is Mr. Tsung-Shann Jiang’s sibling and the director of the Company, and a member of board of directors of BioFirst. Ms. Mei-Ling Jiang is Ms. Shuling Jiang’s sibling. BioLite Japan Entity controlled by controlling beneficiary shareholder of ABVC BioHopeKing Corporation (“BHK”) Entity controlled by controlling beneficiary shareholder of ABVC AiBtl (Holding) BioPharma, Inc. (“AiBtl Holding”) Founding shareholder of AiBtl BioPharma Inc. Jaimes Vargas Russman CEO of AiBtl BioPharma Inc. Lion Arts Promotion, Inc. (“Lion Arts”) Entity controlled by the Jiangs. Consulting fees – related parties In March 2024, the BioLite engaged Lion Arts to provide operation, business development, human resources, and capital finance consulting services in Taiwan. The agreement is for 12 months expiring in February 2025, and was renewed twice, each for another 12 months, expiring February 2027. The service fee is NTD 5,520,000 (approximately $ 173,328 ) for each contract expiring 2026 and 2027. In May 2025, BioLite entered another consulting agreement with Lion Arts for international business development for service fee of NTD 2,000,000 (approximately $ 62,800 ). This agreement is for 12 months expiring April 2026, and is optional for renewal upon mutual agreement. The Company incurred consulting fees for both agreements of $ 59,408 and $ 68,141 for the three months ended March 31, 2026 and 2025, respectively. F- 22 Due from related parties Amounts due from related parties consisted of the following as of the periods indicated: Due from related party- Current March 31, December 31, 2026 2025 BioFirst (1) $ 165,014 $ 761,017 Rgene (2) 2,310 2,347 Director (3) - 24 Total $ 167,324 $ 763,388 Due from related parties- Non-current, net March 31, December 31, 2026 2025 BioFirst (Australia) (4) $ 839,983 $ 839,983 BioHopeKing Corporation (5) 123,363 120,210 Total 963,346 960,193 Less: allowance for expected credit losses accounts ( 963,346 ) ( 960,193 ) Net $ - $ - (1) On December 31, 2023, BioLite Taiwan entered into a loan agreement with BioFirst, with a principal amount of $ 337,707 , which bears interest at 12 % per annum for the use of working capital. During the year ended December 31, 2024, the Company entered into another loan agreement with BioFirst, with a principal amount of $ 347,883 , which bears interest at 12 % per annum for the use of working capital. In 2025, the Company entered several loan agreements with BioFirst, in the aggregate of $ 1,406,022 . These loans bear 12 % per annum, with the term of 12 months. During 2025, the Company also received around $ 203,026 repayment. The funds were used to support BioFirst’ daily operations. As of March 31, 2026 and December 31, 2025, the outstanding loan balance were $ 0 and $ 761,017 , respectively; accrued interest was $ 0 and $ 212,839 , respectively. All the outstanding principal and interests were collected in February 2026. The balance $ 165,014 represents the receivables for operating purpose. (2) As of March 31, 2026 and December 31, 2025, the Company has other receivables amounted $ 2,310 and $ 2,347 , respectively, from Rgene due to daily operations. (3) The director paid certain operating expenses on behalf of the Company. (4) On July 1, 2020, the Company entered into a loan agreement with BioFirst (Australia) for $ 361,487 to properly record R&D cost and tax refund allocation based on co-development contract executed on July 24, 2017. The loan was originally set to be mature on September 30, 2021 with an interest rate of 6.5 % per annum, but on September 7, 2021, the Company entered into a loan agreement with BioFirst (Australia) for $ 67,873 to meet its new project needs. On July 27, 2021, the Company repaid a loan 249,975 to BioFirst (Australia). On December 1, 2021, the Company entered into a loan agreement with BioFirst (Australia) for $ 250,000 to increase the cost for upcoming projects. The loan will be matured on November 30, 2022 with an interest rate of 6.5 % per annum. In 2022, the Company entered into several loan agreements with BioFirst (Australia) for a total amount of $ 507,000 to increase the cost for upcoming projects. During the first quarter of 2023, the Company entered into several loan agreements with BioFirst (Australia) for a total amount of $ 88,091 to increase the cost for upcoming projects. During the second quarter of 2023, the Company entered into several loan agreements with BioFirst (Australia) for a total amount of $ 25,500 to increase the cost for upcoming projects. All the loans period was twelve months with an interest rate of 6.5 % per annum. For accounting purpose, the due from and due to related party balances was being net off. As of March 31, 2026 and December 31, 2025, the outstanding loan balances and allocated research fee were both amounted to $ 681,185 , and accrued interest balances were both amounted $ 158,798 . The business conditions of BioFirst (Australia) deteriorated and, as a result, the Company recognized expected credit losses of $ 839,983 for the year ended December 31, 2023. The Company stopped accruing interest income recognizing such losses. F- 23 (5) On February 24, 2015, BioLite Taiwan and BioHopeKing Corporation (the “BHK”) entered into a co-development agreement, (the “BHK Co-Development Agreement”, see Note 4). The development costs shall be shared 50/50 between BHK and the Company. Under the term of the agreement, BioLite issued relevant development cost to BHK. As of March 31, 2026 and December 31, 2025, due from BHK was both NTD 3,941,299 (approximately$ 123,363 and $ 120,210 , respectively). The business conditions of BHK deteriorated and as a result, the Company recognized expected credit losses of NTD 3,941,299 as of December 31, 2024. No recovery was made during the three months ended March 31, 2026. The Company’s due from related party balances are subject to certain risks that our collaborative parties, including OncoX and FEYE, would face. Such risks exist in future market conditions, macro economy, legal and regulatory, results of clinical trials and product developments, and among others. As of March 31, 2026, the Company’s comprehensive review of these due from related party balances indicates that there are no expected losses except those being recognized above. This conclusion is based on business relationships with our related parties and the absence of any significant indicators of potential default. Convertible notes receivable - related party On January 12, 2026, the Company entered into a one-year convertible promissory note agreement with OncoX, with a principal amount of $ 32,000 and interest of 6.5 % per annum for the use of working capital that is convertible into OncoX’ common stock at $ 5 /share at any time before maturity. It set off the payable of $ 3,404 to OncoX. For the three months ended March 31, 2026, the Company accrued interest income of $ 402 . Due to related parties Amount due to related parties consisted of the following as of the periods indicated: March 31, December 31, 2026 2025 The Jiangs (1) $ 277 $ 300 Shareholders (2) - - ForSeeCon (3) - 70,000 OncoX (3) - 35,404 Total $ 277 $ 105,704 (1) Since 2019, the Jiangs advanced funds to the Company for working capital purposes. As of March 31, 2026 and December 31, 2025, the outstanding balance due to the Jiangs amounted to $ 277 and $ 300 , respectively. These loans bear no interest and are due on demand. In addition, during year ended 2025, the Company purchased a piece of land in Taiwan from Shuling Jiang, as discussed in Note 5. (2) Since 2018, the Company’s shareholders have advanced funds to the Company for working capital purposes. The advances bear interest rates around 12 % per annum. As of December 31, 2025, the Company repaid all the principal. Interest expense in connection with these loans were $ 4,963 for the three months ended March 31, 2025. (3) As of March 31, 2026 and December 31, 2025, the funds received from ForSeeCon and OncoX were initially designated for their payments of licensing fees. Upon further review, management determined that these funds did not meet the fund-raising covenant requirements under licensing agreement. Accordingly, the Company will subsequently return these funds to ForSeeCon and OncoX. In January 2026, the Company returned the fund to ForSeeCon and OncoX, Asset pledged for related party’s bank loan Shuling Jiang acts as the Company’s agent to hold the land in Taoyuan, amounting to $ 4,656,460 . And the land is pledged for her bank loan of NTD 15,000,000 (equivalent to $ 469,500 ), which is due on April 16, 2027. F- 24 11. INCOME TAXES Income tax (benefit) expense for the three months ended March 31, 2026 and 2025 were $0 and $0 , respectively. The income tax expense applicable to income before income taxes consists of the following Three Months Ended March 31, 2026 2025 Current income taxes: Federal - - State - - Foreign - - Total Current - - Deferred income taxes: Federal - - State - - Foreign - - Total deferred - - Income tax expenses - - Loss before income tax consists of the following Three Months Ended March 31, 2026 2025 U.S. ( 1,471,693 ) ( 706,088 ) Foreign ( 218,244 ) ( 238,012 ) Loss before income tax $ ( 1,689,937 ) $ ( 944,190 ) The income tax expense (benefit) differs from the amount computed by applying the US federal statutory rate of 21.0 % to income before income taxes for three months ended March 31, 2025 and 2026, respectively, as follows: Three months ended March 31, 2026 US Federal Statutory Tax Rate ( 354,887 ) 21.0 % State and Local Income Taxes, net of Federal Income Tax Effect ( 30,004 ) 1.8 % Foreign tax effects Taiwan-reduced statutory tax rate on qualifying income 12,746 ( 0.8 )% Effect of Cross-boarder tax laws - - % Tax credits - - % Nontaxable or non-deductible items Stock-based compensation 165,349 ( 9.8 )% others 6,597 ( 0.4 )% Change in valuation allowances 200,199 ( 11.8 )% Others (1) - - % Income tax expenses - - % F- 25 Three months ended March 31, 2025 US Federal Statutory Tax Rate ( 198,071 ) 21.0 % State and Local Income Taxes, net of Federal Income Tax Effect ( 18,628 ) 2.0 % Foreign tax effects Taiwan-reduced statutory tax rate on qualifying income 2,381 ( 0.3 )% Effect of Cross-boarder tax laws - - % Tax credits - - % Nontaxable or non-deductible items Stock-based compensation 10,242 ( 1.1 )% others 10,684 ( 1.1 )% Change in valuation allowances 193,393 ( 20.5 )% Others (1) - - % Income tax expenses - - % (1) includes the tax effects of enactment of new tax laws and change in unrecognized tax benefits. The amount of cash paid for income taxes (net of refunds) for the three months ended March 31, 2026 and 2025 is as follows: Three Months Ended March 31, 2026 2025 Federal - - State - - Foreign - Taiwan 5,944 Total Current 5,944 - Deferred tax assets (liability) as of March 31, 2026 and December 31, 2025 consist approximately of: March 31, December 31, 2026 2025 Loss on impairment of assets 881,855 881,855 Net operating loss carryforwards 6,620,144 6,473,705 Operating lease liabilities 430,604 446,376 Operating lease assets ( 427,183 ) ( 445,321 ) Deferred tax assets, gross 7,505,420 7,356,615 Valuation allowance ( 7,505,420 ) ( 7,356,615 ) Deferred tax assets, net - - A reconciliation of gross unrecognized tax benefits is as follows: March 31, December 31, 2026 2025 Balance at beginning of the period $ 6,473,705 $ 5,677,413 Increases in tax positions for current year-loss carryforward 200,199 796,292 Balance at ending of the period $ 6,673,904 $ 6,473,705 F- 26 12. EQUITY Lind Offerings and Repayments On March 3, 2025 and April 1, 2025, Lind has converted the remaining $ 400,000 principal balance on 2nd Lind Note into 400,000 shares of the Company’s common stocks. All principal balance of 2nd Lind Note was fully converted as of April 1, 2025. On March 3, 2025, April 1, 2025, May 14, 2025, June 5, 2025 and July 9, 2025, Lind converted $ 1,000,000 ($ 200,000 in each conversion) principal balance on 3 rd Lind Note into 936,239 shares of the Company’s common stock. As of July 9, 2025, all principal balance of 3 rd Lind note was fully converted. Stock-Based Compensation and Payments Three months ended March 31, 2025 For the three months ended March 31, 2025, the Company issued 80,654 shares of common stock, for the rent payments of January to March 2025, amounting to $ 48,773 . Three months ended March 31, 2026 For the three months ended March 31, 2026, the Company issued 60,005 shares of common stock, for the rent payments of January to March 2026, amounting to $ 106,287 . For the three months ended March 31, 2026, the Company issued 69,171 restricted shares to employees as compensations of $ 69,171 . For the three months ended March 31, 2026, the Company issued 102,015 restricted shares to advisors and consultants as compensations of $ 198,416 . For the three months ended March 31, 2026, the Company issued 250,000 common stocks to advisors and consultants as compensations of $ 413,500 . Private placement Three months ended March 31, 2026 In January 12, 2026, the Company sold an aggregate amount of $ 256,000 on the same terms and conditions as the Reg S Offering; Pursuant to the share subscriptions, the Company has issued an aggregate of 131,280 shares of the Company’s common stock. The price at which the Shares were sold at $ 1.95 per share. Stock subscription received Three months ended March 31, 2026 In March 2026, the Company received $ 63,492 from an investor to subscribe 45,351 shares of the company’s common stock. The shares were issued in April 2026 due to administrative process. Noncontrolling Interests On March 14, 2024, AiBtl issued 1,610,700 AiBtl’s common stocks to a land acquisition transaction in Taiwan, including the 1-year business consulting fee of $ 383,500 incurred beginning in November 2023, and the cost of land $ 7,670,000 . The land will be used for developing health related businesses. However, upon the closing of the transaction, both parties are aware of such Taiwan’s legal restrictions prohibiting foreign entities directly owning farmland. In August 2024, the Company incorporated a controlling subsidiary, Yunzhiyi, to hold the title of the land upon government’s approval. On March 31, 2025, AiBtl and the landowners executed the Nominee Holding Agreement, Land Lease Agreement, and Consulting Agreement, under the witness of and confirmed by a legal counsel in Taiwan, in which the landowners unconditionally grant the full legal rights to the land to AiBtl before the completion of the title transfer. These agreements are effective until the title transfer is completed. Based on the execution of the agreement, AiBtl recognized $ 7,670,000 ($ 5 per share of AiBtl’s common stock) of land on its balance sheet. F- 27 The Company applied a valuation agent to value the land, applying the observable market quote. To further secure the ownership of land, the board of AiBtl authorized Ms. Jiang in June 2025 to temporarily hold the land title until the administrative procedures are finalized. The title was transferred to Ms. Jiang later that month, and AiBtl recorded $ 5,794 in acquisition costs associated with the transaction. As of the reporting date, government review of the transfer of land title to Yun Zhi Yi is pending completion. 13. STOCK OPTIONS AND WARRANTS The Company’s 2025 annual meeting of shareholders approved an increase in the Company’s Amended and Restated 2016 Equity Incentive Plan (the “Plan”) up to a maximum of 15 % of the number of issued and outstanding shares on the date of the meeting and permit the automatic increase of such shares available under the Plan, on January 1 of each year, by that number of shares equal to 5 % of the number of shares of common stock issued and outstanding on the immediately preceding December 31, commencing on January 1, 2026 and ending with the year that the additional number of shares equals 15 % of the number of shares of common stock issued and outstanding as of December 31 of the previous year. As of the date of the 2025 annual meeting of shareholders, the outstanding share was 16,153,055 shares, which results in the maximum shares issuable of 2,422,958 shares under the Plan. Stock Options Options issued and outstanding as of March 31, 2026, and their activities during the year then ended are as follows: Weighted- Weighted- Average Average Number of Exercise Contractual Underlying Shares (post-split) Price Per Share (post-split) Life Remaining in Years Aggregate Intrinsic Value Outstanding as of January 1, 2026 258,710 $ 27.9 5.74 - Granted - - - - Forfeited - - - - Outstanding as of March 31, 2026 258,710 27.9 5.50 $ - Exercisable as of March 31, 2026 258,710 27.9 5.50 $ - Vested and expected to vest 258,710 $ 27.9 5.50 $ - Stock Warrants - Shuling Warrants issued and outstanding in connection with Shuling land transaction (See Note 5) as of March 31, 2026, and their activities during the year ended are as follows: Number of Underlying Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life Remaining in Years Aggregate Intrinsic Value Outstanding as of January 1, 2026 1,000,000 $ 2.50 4.54 $ - Issued - - - - Exercised - $ - - - Outstanding as of March 31, 2026 1,000,000 $ 2.50 4.29 $ - F- 28 Stock Warrants – Lind Notes On February 23, 2023, in connection with the issuance of the 1 st Lind Note (referring to Note 7), the Company issued Lind a 5 -year term of common stock purchase warrant to purchase up to 529,167 shares (post-split) of the Company’s common stock at an initial exercise price of $ 10.5 per share (post-split), subject to adjustment. The warrant exercise price was reset to $ 3.5 in accordance with the issuance of common stock in relation to securities purchase agreement in July 2023. On November 17, 2023, in connection with the issuance of the 2 nd Lind Note (referring to Note 7), Lind also received a 5 -year term of common stock purchase warrants to purchase up to 1,000,000 shares of the Company’s common stock at an initial exercise price of $ 2 per share. The warrants were valued using the Black-Scholes model and the fair value was determined to be $ 480,795 , which was recorded as a debt discount. On January 17, 2024, in connection with the issuance of the 3 rd Lind Note (referring to Note 7), Lind also received 5 -year term of common stock purchase warrants to purchase up to 1,000,000 shares of the Company’s common stock at an initial exercise price of $ 2 per share. On May 22, 2024, the Company and Lind entered into a letter agreement, pursuant to which Lind will exercise, for cash, 1,000,000 of its Pre-Existing Warrants (all of the warrants issued to Lind on February 23, 2023, November 17, 2023 and January 17, 2024 are hereinafter referred to as the “Pre-Existing Warrants”), to purchase shares of Common Stock at a reduced exercise price of $ 0.75 per share. Such 1,000,000 Pre-Existing Warrants exercised include 529,167 warrants issued in February 2023 and 470,833 warrants issued in November 2023. Concurrently, the exercise price of all Pre-Existing Warrants was reduced to $ 0.75 per share according to this agreement. Lind also received new warrants to purchase 1,000,000 shares of common stock, exercisable at any time on or after the date of its issuance and until the five-year anniversary thereof, for $ 1.00 per share (the “New Warrants”). The fair value of the New Warrants was determined to be $ 925,210 using the Black-Scholes model. The New Warrants may be exercised via cashless exercise or resale pursuant to the registration statement that was declared effective. As of December 31, 2024, Lind has exercised 1,000,000 shares of Pre-Existing Warrants and received 1,000,000 shares of New Warrants according to this agreement. All warrants issued to Lind may be exercised via cashless exercise. On January 5, 2025, the Company and Lind entered into a third letter agreement, pursuant to which Lind agreed to exercise for cash, 1,029,167 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 $ 0.40 per share. On July 1, 2025, and January 20, 2026, Lind exercised 500,000 and 102,000 warrants, respectively, both at an exercise price of $ 1.00 per share and left 398,000 warrants as of March 31, 2026. In July 2025, the Company received $ 83,567 in cash for 216,251 common stock warrant exercise from the placement agents of LIND notes. These warrants were issued in 2023 and 2024 along with the Lind Note financing. Warrants issued and outstanding in connection with Lind convertible notes (See Note 12) as of March 31, 2026, and their activities during the three months ended are as follows: Number of Underlying Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life Remaining in Years Aggregate Intrinsic Value Outstanding as of December 31, 2025 500,000 $ 1.00 3.39 $ 565,000 Issued - - - - Exercised ( 102,000 ) $ 1.00 - - Outstanding as of March 31, 2026 398,000 $ 1.00 3.14 $ - F- 29 14. LEASE The Company adopted ASC 842 on January 1, 2019 using the modified retrospective approach and elected the transition practical expedient not to restate comparative periods. In applying the standard, the Company elected several practical expedients, including not reassessing whether existing or expired contracts contained leases, not reassessing prior lease classifications or initial direct costs, using hindsight when evaluating lease terms and potential impairments, and not reevaluating pre-existing land easements accounted for under ASC 840. The Company also elected the short-term lease exemption and generally accounts for lease and non-lease components separately. Under ASC 842, the Company recognizes right-of-use (“ROU”) assets and corresponding lease liabilities on the consolidated balance sheets. ROU assets represent the right to use the underlying leased assets over the lease term, and lease liabilities represent the present value of future minimum lease payments. Because most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at lease commencement to measure lease liabilities. Future minimum lease payments primarily include fixed base rent obligations. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in Selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has no finance leases. The Company’s leases primarily include various office and laboratory spaces, copy machine, and vehicles under various operating lease arrangements. The Company’s operating leases have remaining lease terms of up to approximately five years. March 31, 2026 December 31, 2025 ASSETS Operating lease right-of-use assets $ 1,826,905 $ 1,913,278 LIABILITIES Operating lease liabilities (current) 332,252 317,557 Operating lease liabilities (non-current) 1,510,943 1,600,747 Supplemental Information The following provides details of the Company’s lease expenses: Three Months Ended March 31, 2026 2025 Operating lease expenses $ 145,134 $ 117,166 Other information related to leases is presented below: Three Months Ended March 31, 2026 2025 Cash paid for amounts included in the measurement of operating lease liabilities $ 38,846 $ 117,166 Stock paid for amounts included in the measurement of operating lease liabilities $ 106,287 $ - F- 30 March 31, 2026 December 31, 2025 Weighted Average Remaining Lease Term: Operating leases 4.82 years 5.01 years Weighted Average Discount Rate: Operating leases 7.25 % 7.11 % The minimum future annual payments under non-cancellable leases during the next five years and thereafter, at rates now in force, are as follows: Operating leases 2026 (Excluding current period) $ 332,767 2027 442,115 2028 447,110 2029 459,067 2030 422,821 Thereafter 70,815 Total future minimum lease payments, undiscounted 2,174,695 Less: Imputed interest ( 331,500 ) Present value of future minimum lease payments $ 1,843,195 15. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Company records contingent liabilities resulting from such claims, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable. In the opinion of management, there were no pending or threatened claims and litigation as of March 31, 2026 and up through the date of the consolidated financial statements was available to the issued. 16. SUBSEQUENT EVENTS On April 15, 2026, the Company issued 45,351 shares to an investor for an aggregate amount of $ 63,492 , which was subscribed stock as of March 31, 2026. The price at which the Shares were sold at $ 1.40 per share. F- 31