iTonic posts $6.78M H1 loss, going-concern warning
A completed US$20,000,000 PIPE stands alongside a going-concern warning and an October 19, 2026 Nasdaq compliance deadline.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
iTonic Holdings Ltd reported revenue of $100,906 for the six months ended June 30, 2026, compared with $67,507 for the six months ended June 30, 2025. Gross profit was $64,710 and gross margin was 64.13%, versus 79.03%. Net loss widened to $6,782,691 from $2,037,496; operating expenses were $5,146,444, including $977,841 of goodwill impairment and $718,258 of intangible-asset impairment.
Operating activities used $729,098 in cash, and cash and cash equivalents were $779,367 at June 30, 2026. The company said its net loss and negative operating cash flows raise substantial doubt about its ability to continue as a going concern; it may cease operations if it cannot secure additional short-term capital. A completed PIPE issued 100,000,000 Class A ordinary shares at US$0.20 each for US$20,000,000 in gross proceeds, with a six-month lock-up. It also paid US$20,000,000 in fully refundable advances for potential acquisitions that remained subject to due diligence and negotiation, with no definitive agreement.
Nasdaq extended the deadline to regain the US$1.00 minimum bid price requirement to October 19, 2026; failure may lead to delisting. Shareholders approved a 1-for-16 consolidation expected to take effect October 6, 2026, intended to help regain compliance.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointSix-month revenue increased from $67,507 to $100,906.
Negative
- Major pointGoing-concern disclosure cites a $6,782,691 six-month net loss and negative operating cash flows.
- Major pointNet loss rose to $6,782,691 from $2,037,496 year over year.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Nasdaq compliance deadline is October 19, 2026; failure may lead to delisting.
Filing Explained
The filing reports two early-stage securities suits but gives no estimable loss range or outcome.
iTonic Holdings furnishes unaudited interim financial statements and management’s discussion for the six months ended
The company reports that it was named, after
Key Figures
Key Terms
PIPE financing financial
going concern financial
minimum bid price requirement regulatory
goodwill impairment financial
non-controlling interests financial
Stock Split
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September
Commission File Number:
(Exact name of registrant as specified in its charter)
Room 405, LongHu Hailanyinqing Industrial Park,
Building 6, No. 8 Beiyuan Xiaojie, Chaoyang District, Beijing, China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXPLANATORY NOTE
iTonic Holdings Ltd (the “Company”) is furnishing (i) its unaudited condensed consolidated financial statements as of June 30, 2026 and for the six months ended June 30, 2026 and 2025, attached as Exhibit 99.1 to this report; (ii) its management’s discussion and analysis of financial condition and results of operations in connection with such financial statements, attached as Exhibit 99.2 to this report.
1
INCORPORATION BY REFERENCE
This report on Form 6-K, including Exhibits 99.1 and 99.2 hereto, is hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-293241), as amended, and the Company’s registration statement on Form S-8 (File No. 333-286673), and into each prospectus outstanding under the foregoing registration statements, and shall be a part thereof from the date on which this report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
2
Exhibits
| Exhibit No. | Description | |
| 99.1 | Unaudited Condensed Consolidated Financial Statements of iTonic Holdings Ltd. and its subsidiaries as of June 30, 2026 and for the Six Months Ended June 30, 2026 and 2025 | |
| 99.2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: September 30, 2026
| iTonic Holdings Ltd | ||
| By: | /s/ Jianfei Zhang | |
| Name: | Jianfei Zhang | |
| Title: | Chief Executive Officer | |
4
| (a) | (1) On March 22, 2024, the Company entered into a loan agreement with Beijing Rural Commercial Bank to obtain a loan of $136,999 (or RMB1,000,000) for the period from March 22, 2024 to March 22, 2025 with an annual interest rate of 4.95%. The Company is required to make monthly interest payment with principal due at maturity. Mr. Pengfei Zhang, a Director of the Company, guaranteed the repayment of these loans. On March 18, 2025, the Company repaid these loans. |
(2) On March 18, 2025, the Company entered into a loan agreement with Beijing Rural Commercial Bank to obtain a loan of $147,392 (or RMB1,000,000) for the period from March 18, 2025 to March 18, 2026 with an annual interest rate of 4.95%. Subsequent to the original agreement, the parties amended the loan agreement to extend the maturity date to March 16, 2027. All other material terms, including the annual interest rate of 4.95%, remain unchanged. The Company is required to make monthly interest payment with principal due at maturity. Mr. Pengfei Zhang, a Director of the Company, guaranteed the repayment of these loans.
Exhibit 99.1
iTonic Holdings Ltd
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts are in USD, except for share and per share data, unless otherwise noted)
| December 31, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments | ||||||||
| Accounts receivable, net | ||||||||
| Advances to a related party | ||||||||
| Inventories, net | ||||||||
| Prepayments and other current assets | ||||||||
| Total Current Assets | $ | $ | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use asset | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Other non-current assets | ||||||||
| Total Non-current Assets | $ | $ | ||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Short-term bank loans | ||||||||
| Accounts payable | ||||||||
| Contract liabilities | ||||||||
| Operating lease liabilities, current | ||||||||
| Due to a related party | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total Current Liabilities | $ | $ | ||||||
| Operating lease liabilities, non-current | ||||||||
| Deferred income tax liabilities | ||||||||
| Total Non-current Liabilities | $ | $ | ||||||
| Total Liabilities | $ | $ | ||||||
| Commitments and Contingencies (Note 15) | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| *Class A ordinary shares, $ | ||||||||
| *Class B ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total iTonic Holdings Ltd shareholders’ equity | $ | $ | ||||||
| Non-controlling Interest | ||||||||
| Total Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
1
iTonic Holdings Ltd
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(All amounts are in USD, except for share and per share data, unless otherwise noted)
| For the | For the | |||||||
| Six Months Ended |
Six Months Ended |
|||||||
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Selling and marketing | ( | ) | ( | ) | ||||
| General and administrative | ( | ) | ( | ) | ||||
| Research and development | ( | ) | ( | ) | ||||
| Total operating expenses | $ | ( | ) | $ | ( | ) | ||
| Loss from operations | $ | ( | ) | $ | ( | ) | ||
| Other income (expenses), net | ||||||||
| Government subsidy | - | |||||||
| Goodwill impairment loss | - | ( | ) | |||||
| Impairment loss on intangible assets | - | ( | ) | |||||
| Other income (expenses), net | ( | ) | ||||||
| Total other income (expenses), net | $ | $ | ( | ) | ||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | ||
| Income tax expense | - | - | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss attributable to non-controlling interests | - | ( | ) | |||||
| Net loss attributable to owners of the parent | ( | ) | ( | ) | ||||
| Other Comprehensive (Loss)/Income | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Foreign currency translation adjustments, net of nil tax | ( | ) | ||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| *Weighted average number of ordinary shares used in per share calculation: | ||||||||
| Net loss per ordinary share – Basic and diluted | ( | ) | ( | ) | ||||
2
iTonic Holdings Ltd
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(All amounts are in USD, except for share and per share data, unless otherwise noted)
| Total | ||||||||||||||||||||||||||||||||||||||||||||
| Accumulated | iTonic | |||||||||||||||||||||||||||||||||||||||||||
| Class A | Class B | Additional | other | Holdings | Non- | Total | ||||||||||||||||||||||||||||||||||||||
| Ordinary shares | Ordinary shares | paid-in | Statutory | Accumulated | comprehensive | shareholders’ | controlling | shareholders’ | ||||||||||||||||||||||||||||||||||||
| *Shares | Amount | *Shares | Amount | capital | reserves | deficit | loss | equity | Interest | equity | ||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | - | ||||||||||||||||||||||||||||||||
| Share-based payment | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||
| Appropriation to statutory reserve | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | - | |||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||
| Share-based payment | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares in private placement | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||
3
iTonic Holdings Ltd
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts are in USD, except for share and per share data, unless otherwise noted)
| For the | For the | |||||||
| Six Months Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation of property and equipment | ||||||||
| Financial expenses | ||||||||
| Share-based payment | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of right-of-use assets | - | |||||||
| Provision for current expected credit losses | ||||||||
| Impairment of intangible assets | - | |||||||
| Impairment of Goodwill | - | |||||||
| Deferred income tax | - | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepayments and other current assets | ( | ) | ( | ) | ||||
| Other non-current assets | ( | ) | ||||||
| Due to a related party | ||||||||
| Accounts payable | - | ( | ) | |||||
| Accrued expenses and other current liabilities | ( | ) | ( | ) | ||||
| Contract liabilities | - | |||||||
| Operating lease liabilities, current and non-current | - | ( | ) | |||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from investing activities: | ||||||||
| Purchase of short-term investments | ( | ) | - | |||||
| Advance for business combinations | - | ( | ) | |||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of equity securities | - | |||||||
| Advance to a related party | ||||||||
| Proceeds from bank loans | - | |||||||
| Repayment to bank loans | ( | ) | - | |||||
| Cash paid for interest expenses | ( | ) | ( | ) | ||||
| Net cash (used in) provided by financing activities | $ | ( | ) | $ | ||||
| Effects of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Net decrease in cash and cash equivalents | $ | ( | ) | $ | ( | ) | ||
| Cash, cash equivalents and restricted cash at beginning of the period | ||||||||
| Cash, cash equivalents and restricted cash at end of the period | $ | $ | ||||||
| Cash and cash equivalents at end of the period | ||||||||
| Restricted cash at end of the period | - | - | ||||||
| Total cash, cash equivalents and restricted cash at end of the period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for income taxes | $ | - | $ | - | ||||
4
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
1. ORGANIZATIONAL AND BASIS OF PRESENTATION
iTonic Holdings Ltd (the “Company” or “iTonic”, formerly known as “Pheton Holdings Ltd”) was established under the laws of the Cayman Islands on November 2, 2022. The Company has no substantive operations other than holding all of the shares of Pheton BVI Ltd (“Pheton BVI”), which entity was established under the laws of the British Virgin Islands on November 22, 2022.
Pheton BVI is a holding Company holding all of the equity of Pheton (HK) Limited (“Pheton HK”), which was established under the laws of Hong Kong on December 14, 2022.
Pheton HK is a holding company holding all of the equity of Beijing Jinruixi Medical Technology Co., Ltd (“Jinruixi”), which was established under the laws of the People’s Republic of China on March 15, 2023.
Jinruixi acquired the entire equity interests in Beijing Feitian Zhaoye Technology Co., Ltd. (“Beijing Feitian”), which was established under the laws of the People’s Republic of China in 1998, is a healthcare solution provider dedicated to the development and commercialization of treatment software used for brachytherapy.
On March 27, 2023, iTonic completed a reorganization of entities under the common control of its then-existing shareholders, who collectively owned all of the equity interests of Pheton prior to the reorganization. iTonic, Pheton BVI, Pheton HK and Jinruixi were established as the holding companies of Beijing Feitian. All of these entities are under common control which results in the consolidation of Beijing Feitian which has been accounted as a reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of iTonic. The shares and per-share information are presented on a retroactive basis to reflect the re-denomination and nominal issuance of shares effected on March 23, 2023.
On September 6, 2024, the Company consummated the initial public offering of
On May 28, 2025, Beijing Feitian participated in the establishment of Mili (Jiangsu) Medical Technology Co., Ltd (“Jiangsu Mili”), a company incorporated under the laws of the People’s Republic of China specializing in healthcare solutions, and holds
On November 25, 2025, the Company acquired a
| Subsidiaries | Date of incorporation | Place of incorporation | Ownership | Principal activities | ||||
| Pheton (BVI) Ltd | ||||||||
| Pheton (HK) Limited | ||||||||
| Beijing Jinruixi Medical Technology Co., Ltd. | ||||||||
| Beijing Feitian Zhaoye Technology Co., Ltd. | ||||||||
| Mili (Jiangsu) Medical Technology Co., Ltd. | ||||||||
| iTonic Corporation |
5
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2025, filed with the SEC on March 30, 2026, as amended on April 2, 2026. The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements of the Company.
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the unaudited interim condensed consolidated financial statements not misleading have been included. Operating results for the interim period ended June 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026.
Going Concern
For the six months ended June 30, 2026, the Company incurred a net loss of $
Principles of consolidation
The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated on consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than
Use of Estimates
In preparing the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the unaudited interim condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, the assessment of the allowance for doubtful accounts, the realizability of deferred income tax assets and cost of assurance-type warranty. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.
The Company is required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
6
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Cash and Cash Equivalents
Cash and cash Equivalents represent cash on hand, time deposits and highly liquid investments placed with banks or other financial institutions, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less.
Restricted Cash
Restricted cash represents cash that cannot be withdrawn without the permission of third parties. The Company’s restricted cash is substantially cash balance in designated bank accounts as security for payment processing. Restriction on the use of such cash and the interest earned thereon is imposed by the banks and remains effective throughout the term of the security period. Upon maturities of the security period, the bank’s deposits are available for general use by the Company.
Short-term Investment
Short-term investments include wealth management products, which are certain deposits with principal not guaranteed with certain financial institutions and the Company can redeem the deposits at any time. The Company records wealth management products with maturities less than one year at fair value in accordance with ASC 825 Financial Instruments.
As of December 31, 2025 and June 30, 2026, the Company had short-term investments balances of $
Fair Value of Financial Instruments
Fair Value of Financial Instruments – the Company adopted ASC 820-10-50, “Fair Value Measurements”. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
| ● | Level one – Quoted market prices in active markets for identical assets or liabilities; |
| ● | Level two – Inputs other than level one inputs that are either directly or indirectly observable; and |
| ● | Level three – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
The Company’s financial instruments consist principally of cash and cash equivalents, restricted cash, short-term investments, non-current financial investments, accounts receivable, accounts payable, short-term debts, notes payable and other liabilities.
Fair value measurements
The Company applies ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement.
ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1 — Observable inputs such as quoted prices for identical instruments in active markets; |
| ● | Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; |
| ● | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
7
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, advances to a related party, prepaid expenses and other current assets, accounts payable, taxes payable, and accrued expenses and other current liabilities approximate their recorded values due to their short-term maturities. The fair value of longer-term leases approximates their recorded values as their stated interest rates approximate the rates currently available.
The following table summarizes the equity measured at fair value on a recurring basis as of December 31, 2025 and June 30, 2026, by level within the fair value hierarchy:
| Level 3 | ||||||||
| Equity | December 31, 2025 | June 30, 2026 | ||||||
| Contingent consideration - common stock | $ | |||||||
| Contingent consideration - warrant | ||||||||
| Total equity measured by fair value | ||||||||
Acquisition
These consolidated financial statements include the operations of acquired businesses from the date of the acquisitions. On November 25, 2025, the Company completed the acquisition of a
We account for business combinations using the acquisition method. Under this method, the identifiable assets acquired, liabilities assumed, and any non-controlling interest are recorded at their estimated fair values. We engage third-party valuation specialists to assist in determining fair values. Our income approach valuation process depends on the assets being valued. Goodwill is measured as the excess of consideration transferred over the fair value of the assets acquired and the liabilities assumed. The allocation of the purchase price relies on estimates and significant assumptions to determine the fair values of identifiable assets acquired and liabilities assumed, particularly for intangible assets. These estimates are based on all available information as of the acquisition date and may involve assumptions about the timing and amounts of future revenues and expenses associated with an asset.
Management applied judgment in determining the fair value of the acquired assets in the iTonic Corporation acquisitions. The judgments made in determining the estimated fair value of the assets acquired, as well as the estimated useful lives of those assets, can materially affect net income in periods subsequent to the acquisition through depreciation and amortization. In particular, judgment was applied with respect to determining the fair value of acquired customer relationships, intangible assets, which involved the use of estimates and significant assumptions with respect to the timing and amounts of cash flow projections, the revenue growth rates, the customer attrition rates, the EBITDA margins, and the discount rate. Unanticipated events and circumstances may occur, which may affect the accuracy or validity of such assumptions or estimates.
Business Combinations
The Company accounts for business combinations using the acquisition method of accounting in accordance with US GAAP. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed, and equity instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortized as part of the effective interest, and costs to issue equity which are included in shareholders’ equity.
8
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Any contingent consideration is included in the cost of the business combination at fair value as at the date of acquisition. Subsequent changes to the assets, liability or equity which arise as a result of the contingent consideration are not affected against goodwill, unless they are valid measurement period adjustments.
Otherwise, all subsequent changes to the fair value of contingent consideration that is deemed to be an asset or liability is recognized in profit or loss, in accordance with US GAAP. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within shareholders’ equity.
The acquiree’s identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of ASC 350 — Intangibles—Goodwill and Other (“ASC 350”) are recognized at their fair values at acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 — Non-current Assets Held for Sale and Discontinued Operations, which are recognized at fair value less costs to sell.
Contingent liabilities are only included in the identifiable liabilities of the acquiree where there is a present obligation at acquisition date.
On acquisition, the acquiree’s assets and liabilities are reassessed in terms of classification and are reclassified where the classification is inappropriate for Company’s reporting purposes. This excludes lease agreements and insurance contracts whose classification remains as per their inception date.
Non-controlling interests in the acquiree are measured on an acquisition-by-acquisition basis either at fair value or at the non-controlling interests’ proportionate share in the recognized amounts of the acquiree’s identifiable net assets. This treatment applies to non-controlling interests which are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation. All other components of non-controlling interests are measured at their acquisition date fair values unless another measurement basis is required by US GAAP.
In cases where the Company held a non-controlling shareholding in the acquiree prior to obtaining control, that interest is measured to fair value as of the acquisition date. The measurement to fair value is included in profit or loss for the year. Where the existing shareholding was classified as an available-for-sale financial asset, the cumulative fair value adjustments recognized previously to other comprehensive income and accumulated in shareholders’ equity are recognized in profit or loss as a reclassification adjustment.
Goodwill is determined as the consideration paid, plus the fair value of any shares held prior to obtaining control, plus non-controlling interest and less the fair value of the identifiable assets and liabilities of the acquiree. If, in the case of a bargain purchase, the result of this formula is negative, then the difference is recognized directly in profit or loss.
Goodwill is not amortized but is tested on an annual basis for impairment. If goodwill is assessed to be impaired, that impairment is not subsequently reversed.
Goodwill and Other Intangibles
The Company accounts for business acquisitions in accordance with GAAP. Goodwill in such acquisitions is determined as the excess of fair value over amounts attributable to specific tangible and intangible assets. GAAP specifies criteria to be used in determining whether intangible assets acquired in a business combination must be recognized and reported separately from goodwill. Amounts assigned to goodwill and other identifiable intangible assets are based on independent appraisals or internal estimates.
In accordance with GAAP, the Company does not amortize goodwill. Management evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. Amortizable intangible assets, including customer relationships are amortized on a straight-line basis over 5 years.
9
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
The Company tests goodwill for impairment annually as of December 31, or if an event occurs or circumstances change that indicate that the fair value of the entity, or the reporting unit, may be below its carrying amount (a “triggering event”). Whenever events or circumstances change, entities have the option to first make a qualitative evaluation about the likelihood of goodwill impairment. If impairment is deemed more likely than not, management would perform the two-step goodwill impairment test. Otherwise, the two-step impairment test is not required. In assessing the qualitative factors, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of the relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgements and assumptions. The judgement and assumptions include the identification of macroeconomic conditions, industry and market considerations, overall financial performance, Company specific events and share price trends, an assessment of whether each relevant factor will impact the impairment test positively or negatively, and the magnitude of such impact.
If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved and multiples of current and future earnings. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.
We test goodwill for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable.
The useful life of intangible assets has been assessed as follows:
| Category | Useful Life | |
| Property rights | ||
| Software | ||
| License | ||
| Customer relationships | ||
| IP |
Acquisition-related costs
Acquisition-related costs, such as legal, accounting, valuation, and other professional fees, are expensed as incurred and are not included in consideration transferred.
Revenue recognition
The Company adopted ASC Topic 606, Revenue from Contracts with Customers, effective as of January 1, 2020. Accordingly, the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025 and 2026 are presented under ASC 606. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is the transaction price the Company expects to be entitled to in exchange for the promised services in a contract in the ordinary course of the Company’s activities and is recorded net of value-added tax (“VAT”). To achieve that core principle, the Company applies the following steps:
Step 1: Identify the contract (s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the contract;
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
10
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
The Company is primarily engaged in the industry of medical instrumental software, with required medical instruments with which such software operates. Our main business during the reporting periods are sales of Particle Implantation Radiotherapy Treatment Planning System (FTTPS), sales of Medical Auxiliary Supplies, and others. No practical expedients were used when adoption ASC 606. Revenue recognition policies for each type of revenue stream are as follows:
Sales of FTTPS:
The Company sells FTTPS with computers, monitors or other medical equipment required by customers’ specific needs. The FTTPS sales contracts are primarily on a fixed price basis, which requires the Company to provide core software, a set of hardware as peripherals to operate the software, and related services, including transportation, packaging, installation and training based on customers’ specific needs. The execution timeline of these sales contracts is typically within three months.
The hardware, software and services are considered as a single performance obligation, because the complete functionality required for brachytherapy is achieved only when these components are used in conjunction with one another. The customers cannot benefit from the hardware, software or services alone, but only upon the integration of software, hardware, installation and training. Typically, installation and training can be completed within two days after delivery. Revenue from sales of FTTPS is recognized at a point in time after the Company transferred control of the Company’s products and provided the services, generally upon the customer’s acceptance of the products and services. Beijing Feitian has not entered into any loss contracts to date.
In certain sales agreements, the Company provides an assurance-type warranty to the customers’ warranty. This type of warranty promises to repair or replace a delivered good or service if it does not perform as expected. Since an assurance-type warranty guarantees the functionality of a product, the warranty is not accounted for as a separate performance obligation, and thus no transaction price is allocated to it. Rather, to account for an assurance-type warranty the vendor should estimate and accrue a warranty liability when the promised products or service is delivered to the customer under ASC 460. Generally, the estimated claim rates of warranty are based on actual warranty experience or Company’s best estimate. There were no such reserves for the six months ended June 30, 2025 and 2026, because the Company’s historical warranty expenses were immaterial to the Company’s consolidated financial statements.
Sales of Medical Auxiliary Supplies:
The Company sells Medical Auxiliary Supplies to customers for the operation of FTTPS system. The promised goods are considered as a single performance obligation because the sales of Medical Auxiliary Supplies are independent and unrelated to sales of FTTPS. Revenue from sales of Medical Auxiliary Supplies is recognized at the point in time when the goods are delivered and the customer has accepted the delivery.
Disaggregated information of revenues by products:
Revenue
| Six Months Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Sales of FTTPS | $ | $ | ||||||
| Sales of Medical Auxiliary Supplies | ||||||||
| Total revenues | $ | $ | ||||||
Share-based compensation
The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, share compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received. The Company amortized the share-based compensation expenses on a straight-line basis over the service period.
11
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Foreign currency translation and transactions
The reporting currency of the Company is U.S. dollars (“$”) and the accompanying consolidated financial statements have been expressed in U.S. dollars. The Company’s principal country of operations is the PRC. The financial position and results of its operations are determined using the Chinese Yuan (“RMB”), the local currency, as the functional currency. The Company’s consolidated financial statements have been translated into the reporting currency U.S. dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in consolidated statements of changes in shareholders equity. Gains and losses from foreign currency transactions and balances are included in the results of operations.
The following table outlines the currency exchange rates that were used in preparing the consolidated financial statements:
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| Period-end spot rate | $ | $ | ||||||
| Average rate | $ | $ |
Statutory reserves
The Company is required to allocate at least
Segment reporting
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making-group, in deciding how to allocate resources and in assessing performance.
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands public entities’ segment disclosures, among others, requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss; an amount and description of its composition for other segment items; and interim disclosures of a reportable segment’s profit or loss and assets. This new guidance was effective for us beginning with the annual report for the year ended December 31, 2024, and applied retrospectively to all prior periods presented. The impact of the adoption of this guidance was not material to our financial position or results of operations, as the requirements impact only segment reporting disclosures in our notes to financial statements.
The Company operates as one operating and reportable segment. All of the Company’s long-lived assets, comprised of property and equipment, are based in China. All of the Company’s revenue was in China for the six months ended June 30, 2025 and 2026, based on the location of the customers.
The Company’s CODM is our Chief Executive Officer. Our CODM makes decisions on resource allocation, evaluates operating performance, and monitors budget versus actual results using net income (loss). There are no reconciling items or adjustments between segment income (loss) and net income (loss) as presented in our statements of operations. The CODM does not review assets in evaluating the segment results and therefore such information is not presented.
12
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Certain Risks and Concentration
Exchange Rate Risks
The Company operates in the PRC, which may give rise to significant foreign currency risks mainly from fluctuations and the degree of volatility of foreign exchange rates between the USD and the RMB.
Currency Convertibility Risks
Substantially all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with other information such as suppliers’ invoices, shipping documents and signed contracts.
Concentration of Credit Risks
Financial instruments that potentially subject the Company to the concentration of credit risks consist primarily of cash. The Company places its cash in good credit quality financial institutions in mainland China and Hong Kong. The bank deposits, with financial institutions in mainland China and Hong Kong are insured by the government authorities up to RMB
As a result, the amounts not insured by the government authorities were $
Risks and Uncertainties
The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations, including its organization and structure disclosed in Note 1, this may not be indicative of future results.
13
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Major Customers
For the six months ended June 30, 2026, the Company’s top four customers accounted for approximately
As of June 30, 2026, the balance due from the top two customers accounted for approximately
Major Suppliers
For the six months ended June 30, 2026, four major suppliers accounted for approximately
As of June 30, 2026, the balance due to the top two suppliers accounted for approximately
3. SHORT-TERM INVESTMENT
The following table summarizes the fair value measurements of assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2025 and June 30, 2026:
| Active Market for Identical Assets (Level 1) | Active Market for Identical Assets (Level 2) | Active Market for Identical Assets (Level 3) | Total Carrying Value | |||||||||||||
| As of December 31, 2025 | ||||||||||||||||
| Short-term investment | - | - | ||||||||||||||
| Total | - | - | ||||||||||||||
| As of June 30, 2026 | ||||||||||||||||
| Short-term investment | - | - | ||||||||||||||
| Total | - | - | ||||||||||||||
4. ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consisted of the following:
| As of | ||||||||
| December 31, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Accounts Receivable(i) | $ | $ | ||||||
| Allowance for current expected credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
| (i) |
14
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
5. PREPAYMENT AND OTHER ASSETS
The prepayments, other current assets and non-current assets, consisted of the following:
| As of | ||||||||
| December 31, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Current: | ||||||||
| Advances for acquisition(a) | $ | - | $ | |||||
| Prepayment(b) | ||||||||
| Others | ||||||||
| Prepayments and other current assets | $ | $ | ||||||
| Non-current: | ||||||||
| Prepayment(b) | $ | |||||||
| Non-current assets | $ | |||||||
| (a) | |
| (b) | Prepayments primarily represent advance payment for exploration of a new platform to meet customers’ requirements. |
6. GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill as of December 31, 2025 and June 30, 2026 by reporting segment are as follows:
| As of | ||||||||
| December 31, | June 30, | |||||||
| 2025 | 2026 | |||||||
| Goodwill, net | $ | $ | ||||||
| Customer relationships, net | ||||||||
| Total goodwill and intangible assets, net | $ | $ | ||||||
We estimated the fair value of the reporting unit based on the present value of its estimated future cash flows. Our determination of fair value involved judgment and the use of estimates and significant assumptions related to projected revenue growth rates, projected EBITDA margins, and the discount rate used to calculate estimated future cash flows. We believe that our assumptions used in discounting future cash flows are appropriate.
Goodwill acquired in our 2025 acquisitions has expanded our portfolio of an integrated home health hub in the U.S. market and expanded our market opportunities, including addressing major challenges within home health, particularly for Medicaid populations, including the
As of June 30, 2026, based on management’s assessment of the operating performance of iTonic Corporation, an impairment of goodwill in the amount of $
15
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following:
| As of | ||||||||
| December 31, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Salary and welfare payables | $ | $ | ||||||
| Deposits from customers | ||||||||
| Other tax payable | ||||||||
| Service payable | ||||||||
| Staff reimbursements | ||||||||
| Total | $ | $ | ||||||
8. LEASES
Operating leases as lessee
The Company’s leasing activities primarily consist of one operating lease for offices. ASC 842 requires leases to recognize right-of-use assets and lease liabilities on the balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet.
For the six months ended June 30, 2025 and 2026, the Company incurred operating lease expenses of $
In January 2026, Beijing Feitian signed a
Cash flow information related to operating leases consists of the following:
| For the six months ended | ||||||||
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash paid for amounts in the measurement of lease liabilities | $ | - | $ | |||||
9. SHORT-TERM BANK LOANS
Short-term bank loans represent amounts due to various banks maturing within one year.
| As of | ||||||||
| December 31, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Beijing Rural Commercial Bank(a) | $ | $ | ||||||
| (a) | (1) On March 22, 2024, the Company entered into a loan agreement with Beijing Rural Commercial Bank to obtain a loan of $ |
(2) On March 18, 2025, the Company entered into a loan agreement with Beijing Rural Commercial Bank to obtain a loan of $
16
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
10. INCOME TAX EXPENSE
The Company recorded income tax expense of nil for both the six months ended June 30, 2025 and 2026. The effective income tax rate of nil for both six months ended June 30, 2025 and 2026 was lower than the statutory income tax rate of
11. RELATED PARTIES TRANSACTIONS AND BALANCES
The table below shows the major related parties and their relationships with the Company as of December 31, 2025 and June 30, 2026:
| Name of related parties | Relationship with the Company | |
| Mr. Jianfei Zhang(a) | ||
| Mr. Pengfei Zhang(b) |
Balances with related parties
As of December 31, 2025 and June 30, 2026, the balances with related parties were as follows:
| As of | ||||||||
| December 31, 2025 | June 30, 2026 | |||||||
| Advance to related parties | ||||||||
| Mr. Jianfei Zhang(a) | $ | $ | - | |||||
| Due to related parties | ||||||||
| Mr. Jianfei Zhang(a) | $ | - | $ | |||||
| (a) | |
| (b) | Mr. Pengfei Zhang, a director of the Company, provided an unsecured personal guarantee to Beijing Rural Commercial Bank for the above-mentioned bank loan of the Company. The guarantee was maintained following the amendment of the loan agreement extending the maturity date to March 16, 2027. No consideration was received by Mr. Pengfei Zhang for providing such guarantee. |
12. PRIVATE INVESTMENT IN PUBLIC EQUITY (“PIPE”) FINANCING
As of June 30, 2026, iTonic Holdings Ltd (the “Company”) completed a private-investment-in-public-equity (“PIPE”) financing pursuant to subscription agreements with multiple investors (the “PIPE Investors”). Under the PIPE transaction, the Company issued an aggregate of
The PIPE Shares are subject to a six-month lock-up period commencing on the share issuance date. The PIPE Shares were duly authorized by written resolutions of all directors of the Company dated April 16, 2026.
The Company has submitted the necessary Listing of Additional Shares Notification and other required filings to Nasdaq for the listing of the PIPE Shares.
The PIPE Shares were offered in reliance upon an exemption from registration under the Securities Act of 1933, as amended. As of June 30, 2026, the PIPE transaction had been closed, and the related share capital and additional paid-in-capital have been recognized in the condensed consolidated financial statements. Proceeds from the PIPE financing are intended for potential target acquisitions, working capital and general corporate purposes.
17
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
13. SHAREHOLDER’S EQUITY
Ordinary shares
The Company’s authorized share capital is $
Statutory reserves
The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least
Share-based compensation
Grants and vesting:
On May 12, 2025, the Company granted and vested an aggregate of
On May 12, 2025, the Company granted and vested an aggregate of
For the six months ended June 30, 2025 and 2026, the Company recognized $
Restricted net assets
The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by Beijing Feitian only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after it has met the PRC requirements for appropriation to statutory reserves. Paid in capital of the PRC subsidiaries included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Beijing Feitian. The Company is required to set aside at least
As of December 31, 2025 and June 30, 2026, the Company had net assets restricted in the aggregate, which included additional paid-in capital and the statutory reserve of the Company’s PRC subsidiary that are included in the Company’s consolidated net assets, of approximately $
18
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
14. EARNINGS (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted income (loss) per ordinary share for the six months ended June 30, 2025 and 2026, respectively.
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Numerator: | ||||||||
| Net loss attributable to ordinary shareholders | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average number of ordinary shares outstanding – basic and diluted | ||||||||
| Net loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
15. COMMITMENTS AND CONTINGENCIES
The Company is subject to some legal proceedings in the ordinary course of its business with respect to its commercial relationships, all of which have been settled by the Company. In the opinion of management, such proceedings did not result in a material adverse effect on the Company’s financial condition.
The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable. Other than the securities class actions described below, the Company does not believe there are any pending legal proceedings that would have a material impact on the Company’s financial position, cash flows or results of operations.
Securities Class Actions
The Company has been named as a defendant in two putative securities class actions: (the “Class Actions”). The Class Actions assert claims under the U.S. federal securities laws. The Company intends to defend the Class Actions vigorously. The Class Actions are at an early stage, and the Company is currently unable to predict their outcome or to reasonably estimate the possible loss or range of loss, if any. Accordingly, no accrual has been recorded for the Class Actions as of June 30, 2026.
19
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
16. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date on which the unaudited interim condensed consolidated financial statements were issued. Except as described below, the Company did not identify any subsequent events that would have required adjustment to or disclosure in these unaudited interim condensed consolidated financial statements.
Securities Class Actions
Subsequent to June 30, 2026, the Company was named as a defendant in two putative securities class actions. See Note 15 for further information.
Share Consolidation
On September 9, 2026, the Company’s shareholders approved, at an extraordinary general meeting, a share consolidation pursuant to which every sixteen (16) issued and unissued Class A ordinary shares and Class B ordinary shares of par value US$
Because the Share Consolidation will become effective after the date on which these unaudited interim condensed consolidated financial statements were issued, the share and per share data presented herein have not been retroactively adjusted to reflect the Share Consolidation.
17. UNAUDITED INTERIM CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
The restricted net assets (as defined in Rule 1-02(dd) of Regulation S-X) of the Company’s consolidated subsidiaries did not exceed
The Company did not pay any dividend to the shareholders for the periods presented. For presenting parent only financial information, the Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company as “Investment in subsidiary” and the income of the subsidiary is presented as “Income from subsidiary”. Certain information and footnote disclosures are generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted.
20
UNAUDITED INTERIM CONDENSED BALANCE SHEETS
(All amounts are in USD, except for share and per share data, unless otherwise noted)
| December 31, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Financial assets held for trading | ||||||||
| Advance to related party | ||||||||
| Other current assets | ||||||||
| Total Current Assets | $ | $ | ||||||
| Non-current assets | ||||||||
| Investment in subsidiary | ||||||||
| Other non-current assets | - | |||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | - | |||||||
| Due to subsidiary | ||||||||
| Total Current Liabilities | $ | $ | ||||||
| Total Liabilities | $ | $ | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Shareholders’ Equity | ||||||||
| *Class A ordinary shares, $ | $ | $ | ||||||
| *Class B ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity | $ | $ | ||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
| * |
21
UNAUDITED INTERIM CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(All amounts are in USD, except for share and per share data, unless otherwise noted)
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Research and development | $ | - | $ | ( | ) | |||
| Loss from operations | ( | ) | ( | ) | ||||
| Other loss | ( | ) | ||||||
| Loss from subsidiaries | $ | ( | ) | $ | ( | ) | ||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Foreign currency translation adjustments | ( | ) | ||||||
| Comprehensive Loss | $ | ( | ) | $ | ( | ) | ||
UNAUDITED INTERIM CONDENSED STATEMENTS OF CASH FLOWS
(All amounts are in USD, except for share and per share data, unless otherwise noted)
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, | June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Net cash used in investing activities | $ | ( | ) | $ | ( | ) | ||
| Net cash provided by financing activities | $ | $ | ||||||
| CHANGES IN CASH AND CASH EQUIVALENTS | ||||||||
| Net decrease in cash and cash equivalents | $ | ( | ) | $ | ( | ) | ||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | $ | $ | ||||||
22
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with unaudited interim condensed consolidated financial statements and the related notes for the six months ended June 30, 2025 and 2026 included elsewhere in this Report on Form 6-K and our audited consolidated financial statements and accompanying notes for the year ended December 31, 2025 included in our annual report on Form 20-F for the year ended December 31, 2025 (the “2025 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2026, as amended on April 2, 2026, and subsequent reports filed with the SEC by the Company. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. The terms, “iTonic,” “the Company” or “our company” refer to iTonic Holdings Ltd, our holding company, and “we”, “our” or “us” as used herein refer to iTonic and/or its subsidiaries unless otherwise stated or indicated by context.
Overview
Beijing Feitian Zhaoye Technology Co., Ltd. (“Beijing Feitian”), our PRC operating entity, is a healthcare solutions provider dedicated to developing and commercializing treatment software and devices used for brachytherapy. Its proprietary treatment planning system is a type of radiation therapy used in treating cancer patients by placing radioactive sources inside the patient that kill cancer cells and shrink tumors. Our proprietary treatment planning system, FTTPS, is designed to promote the efficiency, accuracy, and safety of brachytherapy. FTTPS is an advanced and user-oriented treatment planning system, or TPS, for treating a wide variety of malignant tumors, which can determine the target volume, prescription dose, and dose limitation to protect OARs and produce a safe, effective, and accurate dose distribution plan for brachytherapy for cancer patients.
During the six months ended June 30, 2025 and 2026, Beijing Feitian generated revenue through (i) sales of its treatment planning system, FTTPS; and (ii) sales of Medical Auxiliary Supplies.
Our lead product, FTTPS, provides a standardized operation solution and evaluation system for predictable, executable, and traceable treatment plans. In 2019, Beijing Feitian completed the research and development of the new-generation FTTPS and obtained the People’s Republic of China Medical Device Registration Certificate for the new-generation FTTPS.
FTTPS is designed to generate specialized treatment plans for patients receiving radioactive particle implantation treatment. It combines an open-source nuclear medicine algorithm with medical imaging technology in the proprietary software to locate, target, and track the location and shape of soft-tissue tumors. It also calculates the suggested radioactive dose and generates detailed treatment solutions before, during, and after radiation is delivered. FTTPS helps deliver radiation more accurately to the tumor and reduces the amount of radiation delivered to healthy tissue.
Since 2019, Beijing Feitian has been incorporating 3D-printing technology into the software. The system automatically generates the data required to produce 3D-printed guided templates for treatment planning. These templates can be printed using a 3D printer and applied to patients to position tumors and assist with radioactive particle implantation. These efforts are expected to improve patient outcomes and reduce side effects from off-target radiation delivery in the treatment of prostate, lung, pancreatic, hepatoma, breast, and other cancers.
On March 30, 2022, the National Health Commission issued the “Management Standards for Clinical Application of Radioactive Particle Implantation Therapy Technology (2022 version)” (the “Management Standards”). According to the Management Standards, medical institutions shall have a radioactive particle implantation treatment planning system in place to carry out radioactive particle implantation treatment technology. This means medical institutions must have a treatment planning system to perform particle implantation surgery. We believe that this policy will favor our business operations and will facilitate Beijing Feitian’s business expansion in the PRC market.
Medical Auxiliary Supplies generally include supplies used in brachytherapy treatment, such as implant guns, body-supporting stents, 3D printing molds, and immobilization devices that hold patients in place, etc.
Beijing Feitian does not own or operate, and currently has no plan to establish, any manufacturing facilities for Medical Auxiliary Supplies or other treatment-related products it sells to its customers. Instead, it works with current manufacturers to ensure that they can scale up their manufacturing capabilities to meet Beijing Feitian’s growing needs. Additionally, Beijing Feitian is locating and qualifying additional manufacturers to build redundancies into its supply chain.
This strategy allows Beijing Feitian to maintain an efficient infrastructure by eliminating the need to invest in its own manufacturing facilities, equipment, and personnel while enabling it to focus its resources on the design and development of FTTPS.
Our revenue for the six months ended June 30, 2025 and 2026 was $67,507 and $100,906, respectively. During the same periods, sales of FTTPS accounted for $58,194 and $71,153, or 86.20% and 70.51%, of our revenue, respectively. We consider the sales of FTTPS to be our principal business.
1
Recent Developments
PIPE Financing
On April 16, 2026, we completed a private placement of 100,000,000 Class A ordinary shares at a purchase price of US$0.20 per share, for aggregate gross proceeds of US$20,000,000 (the “PIPE”). The shares issued in the PIPE are subject to a six-month lock-up period from the date of issuance. See Note 12 to our unaudited interim condensed consolidated financial statements.
Advances for Potential Acquisitions
During the six months ended June 30, 2026, we paid advances of US$20,000,000 to third parties in connection with potential target acquisitions. As of the date of this report, we have not entered into a definitive agreement for any such acquisition. There can be no assurance that any such acquisition will be completed on favorable terms or at all, or that the advances will be recovered if an acquisition is not completed. See Note 5 to our unaudited interim condensed consolidated financial statements.
Nasdaq Minimum Bid Price Requirement
We received a notification letter dated October 20, 2025 from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we were not in compliance with the minimum bid price requirement of US$1.00 per share under Nasdaq Listing Rule 5550(a)(2). On April 21, 2026, we received notification from Nasdaq granting us an additional 180-calendar-day period, until October 19, 2026, to regain compliance. To regain compliance, the closing bid price of our Class A ordinary shares must be at least US$1.00 for a minimum of ten consecutive business days before that date. There can be no assurance that we will regain compliance with the minimum bid price requirement or maintain compliance with Nasdaq’s other continued listing requirements. If we fail to do so, our Class A ordinary shares may be delisted from Nasdaq.
Share Consolidation
On September 9, 2026, our shareholders approved a share consolidation of our issued and unissued Class A and Class B ordinary shares at a ratio of one-for-sixteen (1-for-16), pursuant to which every sixteen ordinary shares of par value US$0.0001 each will be consolidated into one ordinary share of par value US$0.0016 each. The share consolidation is expected to become effective at 12:01 a.m. Eastern Time on October 6, 2026. The share consolidation is intended to enable us to regain compliance with the minimum bid price requirement described above. Share and per share data in this discussion and analysis have not been adjusted to reflect the share consolidation. See Note 16 to our unaudited interim condensed consolidated financial statements.
Securities Class Actions
We have been named as a defendant in two putative securities class actions. The actions are at an early stage, and we are currently unable to predict their outcome or to estimate the possible loss or range of loss, if any. See Note 15 to our unaudited interim condensed consolidated financial statements.
Results of Operations
The following table sets forth a summary of our unaudited interim condensed consolidated results of operations for the six months ended June 30, 2025 and 2026.
| For the Six Months Ended June 30, | Fluctuation of June 30, 2025 to June 30, 2026 | |||||||||||||||
| 2025 | 2026 | Amount | % | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues | $ | 67,507 | $ | 100,906 | 33,399 | 49.47 | ||||||||||
| Cost of revenues | (14,159 | ) | (36,196 | ) | (22,037 | ) | 155.64 | |||||||||
| Gross profit | $ | 53,348 | $ | 64,710 | 11,362 | 21.30 | ||||||||||
| Operating expenses | ||||||||||||||||
| Selling and marketing | (87,983 | ) | (69,713 | ) | 18,270 | (20.77 | ) | |||||||||
| General and administrative | (2,010,363 | ) | (4,508,510 | ) | (2,498,147 | ) | 124.26 | |||||||||
| Research and development | (35,557 | ) | (568,221 | ) | (532,664 | ) | 1,498.06 | |||||||||
| Total operating expenses | $ | (2,133,903 | ) | $ | (5,146,444 | ) | (3,012,541 | ) | 141.18 | |||||||
| Loss from operations | $ | (2,080,555 | ) | $ | (5,081,734 | ) | (3,001,179 | ) | 144.25 | |||||||
| Other Income, net | ||||||||||||||||
| Government subsidy | 19,468 | — | (19,468 | ) | (100.00 | ) | ||||||||||
| Goodwill impairment loss | — | (977,841 | ) | (977,841 | ) | — | ||||||||||
| Impairment loss on intangible assets | — | (718,258 | ) | (718,258 | ) | — | ||||||||||
| Other income (expense), net | 23,591 | (4,858 | ) | (28,449 | ) | (120.59 | ) | |||||||||
| Total other income, net | $ | 43,059 | $ | (1,700,957 | ) | (1,744,016 | ) | (4,050.29 | ) | |||||||
| Loss before income taxes | $ | (2,037,496 | ) | $ | (6,782,691 | ) | (4,745,195 | ) | 232.89 | |||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss | $ | (2,037,496 | ) | $ | (6,782,691 | ) | (4,745,195 | ) | 232.89 | |||||||
2
Comparison of Results of Operations for the Six Months Ended June 30, 2025 and 2026
Revenue
We, through the operation of Beijing Feitian, generate revenue primarily from (i) the sales of FTTPS, and (ii) the sales of Medical Auxiliary Supplies. Total revenues increased by $33,399, or 49.47%, from $67,507 for the six months ended June 30, 2025, to $100,906 for the six months ended June 30, 2026.
The following table sets forth our revenue by sales categories for the periods indicated.
| For the Six Months Ended June 30, | Fluctuation of June 30, | |||||||||||||||||||||||
| 2025 | 2026 | 2025 to June 30, 2026 | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Sales of FTTPS | $ | 58,194 | 86.20 | $ | 71,153 | 70.51 | $ | 12,959 | 22.27 | |||||||||||||||
| Sales of Medical Auxiliary Supplies | 9,313 | 13.80 | 29,753 | 29.49 | 20,440 | 219.48 | ||||||||||||||||||
| Total revenues | $ | 67,507 | 100.00 | $ | 100,906 | 100.00 | $ | 33,399 | 49.47 | |||||||||||||||
The following table sets forth the details of our sales of FTTPS for the periods indicated.
| For the Six Months Ended June 30, | Fluctuation of June 30, | |||||||||||||||
| 2025 | 2026 | 2025 to June 30, 2026 | ||||||||||||||
| Amount | Amount | Amount | % | |||||||||||||
| Sales volume | 2 | 3 | 1 | 50.00 | ||||||||||||
| Average contract prices | $ | 29,097 | $ | 23,718 | $ | (5,379 | ) | (18.49 | ) | |||||||
Sales of FTTPS made up the majority of the Company’s total revenue for the six months ended June 30, 2025 and 2026, accounting for 86.20% and 70.51% of our total revenue, respectively. The total revenue increased by $33,399, or 57.39%, from $67,507 for the six months ended June 30, 2025 to $100,906 for the six months ended June 30, 2026, primarily due to a 22.27% increase in sales revenue of FTTPS, increasing from $58,194 in the six months ended June 30, 2025 to $71,153 in the six months ended June 30, 2026. The increase of sales revenue of FTTPS was caused by the increase of sales volume by 50.00%.
Meanwhile, sales of Medical Auxiliary Supplies increased by 219.48%, from $9,313 for the six months ended June 30, 2025 to $29,753 for the six months ended June 30, 2026. This increase was mainly due to the increase of hospitals’ purchase demands.
Cost of revenues
The cost of revenues primarily consists of finished goods and personnel-related costs for employees responsible for training, advisory and technical customer support. The total cost of revenues increased by $22,037, or 155.64%, from $14,159 for the six months ended June 30, 2025, to $36,159 for the six months ended June 30, 2026.
The following table sets forth our cost of revenues by sales categories for the periods indicated.
| For the Six Months Ended June 30, | Fluctuation of June 30, | |||||||||||||||||||||||
| 2025 | 2026 | 2025 to June 30, 2026 | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| FTTPS | $ | 8,378 | 59.17 | $ | 23,481 | 64.87 | $ | 15,103 | 180.27 | |||||||||||||||
| Medical Auxiliary Supplies | 5,781 | 40.83 | 12,715 | 35.13 | 6,934 | 199.95 | ||||||||||||||||||
| Total | $ | 14,159 | 100.00 | $ | 36,196 | 100.00 | $ | 22,037 | 155.64 | |||||||||||||||
3
The costs of revenue increased by 50.97%, from $14,159 for the six months ended June 30, 2025 to $15,103 for the six months ended June 30, 2026. This increase in cost can be attributed to a $15,103 increase in cost of revenue of FTTPS and a $6,934 increase in cost of revenue of Medical Auxiliary Supplies. Increase in cost of revenue of FTTPS was caused by 50.00% increase in the sales volume of FTTPS from 2 sets sold in the first half of 2025 to 3 sets sold in first half of 2026. During the six months ended June 30, 2026, all of FTTPS’s sales volume consisted solely of essential equipment such as computer workstations and computers. Increase in cost of revenue of Medical Auxiliary Supplies was primarily caused by the increase in sale volume of Medical Auxiliary Supplies, which was driven by an increase in customer demand for these products.
Gross profit
For the six months ended June 30, 2025 and 2026, our gross profits were $53,348 and $64,710, respectively, resulting in gross profit margins of 79.03% and 64.13%, respectively. The gross margin has been and will continue to be affected by several factors, including the FTTPS’s sales volume, the level of customization from our clients’ demand, and our ability to manage the variation of customization costs passed on to clients.
Operating expenses
Our operating expenses increased by $3,012,541, or 141.18%, from $2,133,903 for the six months ended June 30, 2025, to $5,146,444 for the six months ended June 30, 2026.
The following table sets forth a breakdown of our operating expenses and the percentage of operating expenses to revenue for the six months ended June 30, 2025 and 2026:
| For the Six Months Ended June 30, | Fluctuation of June 30, 2025 to June 30, 2026 | |||||||||||||||||||||||
| 2025 | % | 2026 | % | Amount | % | |||||||||||||||||||
| Revenues | $ | 67,507 | $ | 100,906 | $ | 33,399 | 49.47 | |||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Selling and marketing | 87,983 | 130.33 | 69,713 | 69.09 | (18,270 | ) | (20.77 | ) | ||||||||||||||||
| General and administrative | 2,010,363 | 2,978.01 | 4,508,510 | 4,468.03 | 2,498,147 | 124.26 | ||||||||||||||||||
| Research and development | 35,557 | 52.67 | 568,221 | 563.12 | 532,664 | 1,498.06 | ||||||||||||||||||
| Total operating expenses | $ | 2,133,903 | 3,161.01 | $ | 5,146,444 | 5,100.24 | $ | 3,012,541 | 141.18 | |||||||||||||||
Selling and marketing expenses
Selling expenses primarily include promotion and advertising expenses, business travel expenses, staff costs, and other daily expenses related to the selling and marketing departments. Selling expenses decreased by $18,270, or 20.77%, from $87,983 for the six months ended June 30, 2025 to $69,713 for the six months ended June 30, 2026. The decrease was mainly due to the ongoing efforts to optimize the sales team’s structure and improve operational efficiency.
General and administrative expenses
General and administrative expenses refer to the costs associated with Beijing Feitian’s day-to-day running of the business. These expenses primarily include stock-based compensation, operating lease expenses, salary and welfare expenses and related expenses for employees involved in general corporate functions, such as accounting, legal and human resources. They also cover expenses associated with the operation of functions such as traveling and general expenses, professional service fees, and other related expenses. For the six months ended June 30, 2026, general and administrative expenses increased by $2,498,147, or 124.26%, compared to the previous period, from $2,010,363 to $4,508,510. The significant increase was primarily due to equity stocks granted to service provider pursuant to the 2025 Equity Incentive Plan.
4
Research and Development Expenses
During the six months ended June 30, 2026, our research and development expenses increased by $532,664, or 1,498.06%, from $35,557 in the previous period to $568,221. These expenses included salaries, employee benefits, and third-party development expenses associated with product development. Specifically, our research and development expenses are primarily expenditures related to the ongoing functional development of FTTPS. This increase in expenses is attributable to the Company’s continuous collaboration with its outsourcing R&D team since 2024 to conduct research and develop an AI recognition feature within FTTPS, and the SAAS system of FTTPS, which can facilitate quicker and easier use of this product by hospitals.
Other income (expenses), net
Other income (expenses), net, primarily consisted of goodwill impairment loss, impairment loss on intangible assets, government subsidy and other income (expenses), net. The goodwill impairment loss, and impairment loss on intangible assets are mainly due to management’s interim impairment assessment of the reporting unit from the acquisition of iTonic Corporation completed on November 25, 2025, after identifying triggering events that the reporting unit’s projected operating results fell short of prior expectations under ASC 350. The government subsidy mainly aims to encourage and support technology enterprises engaged in the software industry. Other expenses (income) include immaterial interest expenses and other additional minor incidental income. Other income (expenses), net decreased by $28,449, or 120.59%, from other income of $23,591 for the six months ended June 30, 2025, to other expenses of $4,858 for the six months ended June 30, 2026. The decrease in other income (expenses), net mainly caused the decrease of interest income and increase of interest expense for the six months ended June 30, 2026.
Income tax expense
Our income tax expense was nil for the six months ended June 30, 2025 and 2026, as the Group had no taxable profit in either period.
Net loss
As a result of the foregoing, our net loss increased by 232.89% from a net loss of $2,037,496 for the six months ended June 30, 2025 to a net loss of $6,782,691 for the six months ended June 30, 2026. Net loss attributable to non-controlling interests was $927,275 for the six months ended June 30, 2026 (nil for the six months ended June 30, 2025), and net loss attributable to the Company was $5,855,416 for the six months ended June 30, 2026, compared to $2,037,496 for the six months ended June 30, 2025.
Cash Flow Analysis
Cash Flows for the Six Months ended June 30, 2025 and 2026
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net cash used in operating activities | $ | (2,830,921 | ) | $ | (729,098 | ) | ||
| Net cash used in investing activities | (1,402,738 | ) | (20,002,405 | ) | ||||
| Net cash provided by financing activities | (116,353 | ) | 20,017,971 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (657 | ) | 2,770 | |||||
| Net increase in cash and cash equivalents | (4,350,669 | ) | (710,762 | ) | ||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 6,159,823 | 1,490,129 | ||||||
| Cash and cash equivalents at the end of the period | 1,809,154 | 779,367 | ||||||
| Restricted cash at the end of the period | — | — | ||||||
| Total cash, cash equivalents and restricted cash at end of the period | 1,809,154 | 779,367 | ||||||
5
Operating Activities
During the six months ended June 30, 2025, the Company experienced a net cash outflow of $2,830,921 from operating activities. This was mainly due to a net loss of $2,037,496, which was adjusted for (1) certain non-cash items, mainly including share-based payments of $586,233, depreciation of property and equipment of $6,498, financial expenses of $5,358, and provision for current expected credit losses of $65,329, (2) changes in certain working capital items that positively impact the cash flow from operating activities, which including a decrease in accounts receivable of $108,845, an increase in amount due to a related party of $2,953, and (3) changes in certain working capital items that negatively impact the cash flow from operating activities, mainly including an increase in inventories of $6,871, an increase in prepayments and other current assets of $909,336, an increase in other non-current assets of $600,000 and a decrease in accrued expenses and other current liabilities of $52,434.
During the six months ended June 30, 2026, the Company experienced a net cash outflow of $729,098 from operating activities. This was mainly due to a net loss of $6,782,691, which was adjusted for (1) certain non-cash items, mainly including share-based payments of $3,301,143, impairment of Goodwill of $977,841, impairment and amortization of intangible assets of $859,095, and provision for current expected credit losses of $440,985, (2) changes in certain working capital items that positively impact the cash flow from operating activities, which mainly including an increase in contract liabilities of $615,312, a decrease in other non-current assets of $576,736, and an increase of amount due to a related party of $282,129, and (3) changes in certain working capital items that negatively impact the cash flow from operating activities, mainly including an increase in accounts receivable of $613,712, and an increase in prepayments and other current assets of $333,726.
Investing Activities
Net cash used in investing activities amounted to $1,402,738 for the six months ended June 30, 2025, consisting of purchase of short-term investments of $1,400,000 and purchase of property and equipment of $2,738.
Net cash used in investing activities amounted to $20,002,405 for the six months ended June 30, 2026, consisting of advance for business combinations of $20,000,000 and purchase of property and equipment of $2,405.
Financing Activities
Net cash used in financing activities amounted to $116,353 for the six months ended June 30, 2025, primarily consisting of repayment to bank loans of $249,566 and cash paid for interest expenses of $5,358, partially offset by proceeds from bank loans of $137,882 and decrease of advance to a related party of $689.
Net cash provided by financing activities amounted to $20,017,971 for the six months ended June 30, 2026, primarily consisting of proceeds from issuance of equity securities of $20,000,000 and decrease of advance to a related party of $22,829, partially offset by cash paid for interest expenses of $4,858.
Safe Harbor Statement
This report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may,” “will,” “intend,” “target,” “aim,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” “plan,” “potential,” “continue,” “is/are likely to,” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s future business development; product and service demand and acceptance; changes in technology; economic conditions; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this report. Additional factors are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
6