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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

Amendment No. 1

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from   to

Commission file number: 001-42300

Baird Medical Investment Holdings Limited

(Exact name of registrant as specified in its charter)

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N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation)

Room 202, 2/F, Baide Building

Building 11, No.15

Rongtong Street, Yuexiu District, Guangzhou

Peoples Republic of China

(Address of principal executive offices)

Haimei Wu

Telephone: +86 13560026976

E-mail: ir@bairdmed.com

Room 202, 2/F, Baide Building

Building 11, No.15

Rongtong Street, Yuexiu District, Guangzhou

Peoples Republic of China

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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Securities registered or to be registered, pursuant to Section 12(b) of the Act

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Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

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Indicate the number of issued and outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Ordinary shares, par value US$0.0001 each: 40,979,382 shares outstanding

Preferred shares, par value US$0.0001 each: 290,000 shares outstanding

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Of 1934. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

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EXPLANATORY NOTE

This Amendment No. 1 on Form 20-F/A (this “Amendment”) amends the Annual Report on Form 20-F of Baird Medical Investment Holdings Limited for the fiscal year ended December 31, 2025, originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 24, 2026 (the “Original Form 20-F”), solely to amend and restate Item 5, Item 19 and the F-pages to address certain comments from the staff of the SEC to the Original Form 20-F.

Except as expressly set forth herein, this Amendment No. 1 does not amend, update or otherwise modify any other information contained in the Original Form 20-F. This Amendment No. 1 should be read in conjunction with the Original Form 20-F. This Amendment No. 1 does not reflect events occurring after the filing of the Original Form 20-F.

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PART I

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report. This report contains forward-looking statements. In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.

Overview

We are a specialized healthcare innovator dedicated exclusively to thyroid related diseases. By combining extensive clinical understanding with cutting-edge technologies, we aim to transform traditional thyroid treatment through intelligent, non-invasive solutions. Our mission is to build an ecosystem that spans the entire treatment process, spanning from early screening and diagnosis to robotic-assisted ablation and posttreatment care.

Our core strengths lie in our successful development and commercialization of the thyroid microwave ablation system, as well as our active R&D pipeline featuring AI-integrated robotic systems. Our approach integrates hardware innovation, software intelligence and a comprehensive system mindset, positioning us to lead in a highly specialized and globally significant market.

What set us unique are our category focus, our full-stack technology strategy and our proven regulatory and commercial execution. Backed by a vision to deliver safer, faster, and more accurate thyroid care to patients worldwide, we are positioned to become the first global platform company dedicated to precision thyroid health.

We ranked first among microwave ablation medical device providers in the treatment of thyroid nodules and breast lumps in the PRC in terms of sales revenue and sales volume of microwave ablation needles in 2022 according to the Frost & Sullivan Report. Further, we were the third largest microwave ablation medical device provider in the PRC in terms of sales revenue in 2022.

Through our research and development team, led by our chief technical officer, Mr. Rongjian Lu, and our research and development partners, including Nanjing Forestry University and Zhuhai People’s Hospital, we have focused our development efforts on additional types of microwave ablation medical devices to meet market demand, and have also developed a product pipeline to achieve more extensive products offering.

Our products are ultimately sold to hospitals through (i) direct sales, (ii) deliverers, or (iii) distributors. Benefiting from our distributors’ established channels and resources, we have been able to cut costs and time in reaching target markets compared to the costs and time required to distribute those products through direct sales. See “Sales Channels” below for an explanation of the difference between deliverers and distributors. With a network of qualified deliverers, we have been able to sell products to a large group of hospitals at once. With our solid and strategically managed network of deliverers and distributors and close collaboration with medical associations and doctors through our sales and marketing efforts, we have seen the number of hospitals in China purchasing our products increase from approximately 505 in 2023 to approximately 579 in 2024 and further to 614 in 2025, with the number of Grade III hospitals (the highest tier hospitals in China as classified and graded pursuant to the Pilot Draft of the Hospital Hierarchy Management Scheme of the PRC) increasing from approximately 310 in 2023 to approximately 310 in 2024 and further to 329 in 2025.

Going Concern Assessment

In assessing our liquidity position and our ability to continue as a going concern for at least 12 months from the issuance date of our consolidated financial statements for the year ended December 31, 2025, management considered the conditions and events described below in the aggregate, including our cash position, working capital, accounts receivable profile and subsequent collections, bank financing arrangements, related-party support and expected operating needs.

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As of December 31, 2025, we had cash of US$0.2 million and restricted cash of US$0.4 million. The restricted cash as of December 31, 2025 related to an administrative penalty assessed in November 2024 in connection with our prior failure to timely renew a manufacturing license as a result of employee oversight. We paid the remaining penalty in full in January 2026, and the related cash freeze was lifted in January 2026. As of March 31, 2026, our cash balance increased to approximately US$1.6 million.

Although we recorded a net loss of US$27.5 million for the year ended December 31, 2025, including net loss attributable to controlling shareholders of US$27.3 million, management considered the underlying drivers of the loss in its liquidity assessment. A significant portion of the 2025 net loss was attributable to non-cash share-based compensation expenses of US$17.5 million and increased research and development service fees, including FDA certification fees, CE Marking fees and expenditures on AI ablation systems and equipment. Management does not expect equity awards of a comparable magnitude to recur in the near term, and expects research and development cash spending to decrease after the completion of certain regulatory, validation and project milestones. However, there can be no assurance that our actual cash requirements will not exceed management’s current expectations.

The Company had positive working capital as of both December 31, 2024 and 2025. Working capital was US$26.8 million and US$22.6 million as of December 31, 2024 and 2025, respectively. Management considered the Company’s positive working capital position as part of its going concern assessment.

Net cash used in operating activities improved in 2025, decreasing to US$1,344,032 from US$6,313,115 in 2024. Management considered this year-over-year improvement as part of its going concern assessment and believes it reflects the Company’s cash management and working capital optimization efforts.

As of December 31, 2025, the Company had segregated its total current liabilities into (i) items requiring cash settlement within the next 12 months, mainly include loans, accounts payable, accrued expenses and other current liabilities and (ii) non-cash or long-term natured items excluded from immediate liquidity concern, mainly include contract liabilities (which will be recognized as revenue upon delivery of goods and does not require cash repayment), and amounts due to a related party (i.e., Betters Medical Investment Holdings Limited, the related party of the Company, which provided the Company with an executed letter of continuing financial support confirming that payables due to it will not be required to be repaid within the next 12 months from the date the financial statements are issued).

Note (1) — Loans: Historical Debt Renewals and Refinancing

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In January, 2026, Baide Suzhou obtained four loans from Jiangsu Taicang Rural Commercial Bank Co., Ltd. Xinmao Sub-branch, as detailed: (1) On January 19, 2026, Baide Suzhou borrowed a loan of $0.4 million (RMB3 million) with the term of one year at an annual interest rate of 2.70%;(2) On January 20, 2026, Baide Suzhou borrowed a loan of $0.4 million (RMB3 million) with the term of one year at an annual interest rate of 2.70%;(3) On January 21, 2026, Baide Suzhou borrowed a loan of $0.4 million (RMB3 million) with the term of one year at an annual interest rate of 2.70%;(4) On January 22, 2026, Baide Suzhou borrowed a loan of $0.1 million (RMB1 million) with the term of one year at an annual interest rate of 2.70%.

In March, 2026, Baide Suzhou borrowed a loan of $1.4 million (RMB10 million) with the term of one year at an annual interest rate of 2.71% from Industrial and Commercial Bank of China.

In March, 2026, Baide Suzhou obtained three loans from China CITIC Bank Suzhou Branch, as detailed: (1) On March 23, 2026, Baide Suzhou borrowed a loan of $0.9 million (RMB6 million) with the term of one year at an annual interest rate of 2.70%;(2) On March 26, 2026, Baide Suzhou borrowed a loan of $0.1 million (RMB1 million) with the term of one year at an annual interest rate of 2.70%;(3) On March 26, 2026, Baide Suzhou borrowed a loan of $0.6 million (RMB4 million) with the term of one year at an annual interest rate of 2.70%.

Management believes these improved financing terms reflect the Company’s strengthened banking relationships and credit profile and are expected to reduce the Company’s overall cost of debt and improve liquidity going forward.

Note (2) — Accounts Payable, Accrued Expenses and Other Current Liabilities

Accounts payable, accrued expenses and other current liabilities relate to routine payments to suppliers, employees, tax authorities, and professional service providers. Management has identified the following liquidity resources available to satisfy the current liabilities that requiring cash settlement:

To alleviate short-term liquidity pressure and demonstrate commitment to the Company’s financial stability, Betters Medical Investment Holdings Limited, the related party of the Company, together with Haimei Wu, the Chairwoman of the Board of Directors and Chief Executive Officer of the Company, provided the Company with an executed letter of continuing financial support. Haimei Wu is able to provide financial support of US$2.0 million, supported by properties owned by Ms. Wu, as necessary to enable the Company to meet its obligations as they become due for a period of at least twelve months from the date the financial statements are issued. Betters Medical Investment Holdings Limited confirmed that payables due to it will not be required to be repaid within the next twelve months from the date the financial statements are issued. Management considered this financial support and non-demand confirmation in assessing the Company’s liquidity and its ability to meet obligations as they become due.

Between December 31, 2025 and the issuance date of the financial statements (i.e., April 24, 2026), the Company received collections of approximately US$4.6 million relating to accounts receivable outstanding as of December 31, 2025, representing approximately 10.8% of the Company’s net accounts receivable balance of US$42.5 million as of such date. In addition, between the issuance date of the financial statements (i.e., April 24, 2026) and May 29, 2026, the Company collected additional approximately US$1.2 million in accounts receivable outstanding as of December 31, 2025, representing approximately 2.8% of the Company’s net accounts receivable balance of US$42.5 million as of December 31, 2025.The Company believes that payment approval delays were temporary and were affected by slower internal approval processes during the past two years, including as a result of the anti-corruption campaign in the pharmaceutical industry. Management has implemented a focused collection initiative targeting outstanding accounts receivables to satisfy the operating payables.

Management also considered operational developments expected to support the Company’s business in 2026, including international market expansion and participation in national volume-based procurement tenders.

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During 2025 and early 2026, the Company obtained medical device registration approvals and sales licenses in multiple key international markets. Management expects these new geographic segments to provide incremental revenue streams outside the China hospital channel and to contribute revenue beginning in the second quarter of 2026.

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The Company has positioned its product portfolio for inclusion in China’s centralized procurement programs. While volume-based procurement generally implies lower per-unit pricing, it also provides volume commitments and can reduce sales and marketing costs. Management expects participation in these tenders to stabilize and grow the Company’s China revenue base with improved operating leverage, offsetting margin compression through volume efficiency.

Based on the factors described above, including the Company’s cash and restricted cash position, positive working capital, the nature of the 2025 net loss, improvement in operating cash outflows, historical debt renewals and refinancing activities, continuing financial support from Haimei Wu, the non-demand confirmation from Betters Medical Investment Holdings Limited, subsequent collections of accounts receivable, and expected 2026 profitability drivers, management concluded that there was no substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of the financial statements.

Factors Affecting Our Results of Operations

Legislation May Impact our Business and Operating Results

In China, a number of legislative and regulatory changes and proposed changes regarding medical device industry could prevent or delay regulatory approval of our pipeline products, restrict or regulate post-approval activities and affect our ability to profitably sell our products and any pipeline products for which we obtain regulatory approval. In recent years, there have been and will likely continue to be efforts to enact administrative or legislative changes in relation to the medical device industry, including measures which may result in more rigorous coverage criteria and downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain profitability.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for medical devices. We cannot be sure whether additional legislative changes will be enacted, or whether NMPA regulations, guidance or interpretations will be changed, or what the impact of such changes on the regulatory approvals of our product candidates, if any, may be.

In addition, in 2021, China started to initiate centralized procurement pilot programs in an effort to regulate prices of medical devices through Company procurement at the provincial level. Our products have not been covered by centralized national procurement as of the date of this annual report. However, on August 8, 2025, the Medical Insurance Bureau of Heilongjiang Province issued the “Notice on Carrying out Information Maintenance Work for Vena Cava Filters and Ablation Electrodes as Medical Consumables”, outlining the work plan. Starting from August 11, 2025, the information maintenance work for vena cava filters and ablation electrodes as medical consumables will be organized. The provinces (including autonomous regions and municipalities) participating in this centralized procurement include Tianjin, Hebei, Shanxi, Inner Mongolia Autonomous Region, Liaoning, Jilin, Jiangxi, Henan, Hubei, Hunan, Guangxi Zhuang Autonomous Region, Hainan, Chongqing, Sichuan, Guizhou, Yunnan, Tibet Autonomous Region, Shaanxi, Gansu, Qinghai, and Ningxia Hui Autonomous Region. It is out of our control as to whether or when the centralized national procurement will cover the types of products that we produce. If our products were covered by the centralized national procurement in the future, the price of our products may decrease, which could harm our profitability, if any increase in sales volume fails to fully compensate for such decrease in price.

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Our High Gross Profit Margin May Not Be Sustainable

We cannot assure you that our historical operating results, in particular our high gross profit margin, will be indicative of future performance for various reasons, including uncertainties of the success of our existing and new products, changes in market and the regulatory environment, as well as our ability to manage our sales network and the intensified competition in the microwave ablation medical device market in China. Our profitability for future years may be negatively affected by low-margin sales and competition strategies adopted by our competitors, increasing costs of raw materials and increasing selling and distribution costs arising from the expansion of our sales and distribution network. As a result, our gross profit margin may not be sustainable.

The Discontinuation of Preferential Tax Treatments or Government Incentives

Pursuant to the EIT Law, the EIT rate generally applicable in the PRC has been 25%. However, Nanjing Changcheng and Baide Suzhou, our principal operating subsidiaries, have been accredited as a High and New Technology Enterprise under the relevant PRC laws and regulations since 2020 and 2021 respectively. Accordingly, Nanjing Changcheng and Baide Suzhou were entitled to a preferential tax treatment of 15% for the fiscal years ended December 31, 2023, 2024 and 2025.

Moreover, according to the relevant laws and regulations promulgated by the State Tax Bureau of the PRC, for enterprises engaging in R&D activities, the Super Deduction ratio is 75% from January 1, 2018 to September 30, 2022. From October 1, 2022 onwards, the Super Deduction ratio is 100%. In addition, the Super Deduction ratio for outsourced R&D expenses is 80%. Two PRC subsidiaries of Pubco have claimed such Super Deduction in ascertaining its tax assessable profits in the fiscal years ended December 31, 2023, 2024 and 2025. If we fail to maintain or renew the High and New Technology Enterprise accreditation or if any of the preferential tax treatments or government grants discontinue or reduce, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Untimely or Unsuccessful Product Registration Testing or Clinical Trials May Impact our Business and Operating Results

We have five types of pipeline products. In order to obtain the registration certificates for Class III medical devices, such pipeline products are required to go through product registration testing to demonstrate their safety and effectiveness. Such testing is conducted by third party testing institutions recognized by the NMPA. The product registration testing schedule of these testing institutions is beyond our control, and we cannot provide assurance that our pipeline products will pass these tests in a timely manner, or at all.

Furthermore, success in testing procedures does not guarantee success in clinical trials. Negative or inconclusive results or safety issues associated with its pipeline products could cause us or regulatory authorities to interrupt, delay, suspend or terminate clinical trials, or could result in the delay or denial of regulatory approvals from the NMPA, all of which may have a significant impact on our business and operating results.

For further discussion on the potential risks involved with completion of our product registration testing or clinical trials, see “Item 3. Key Information—D. Risk Factors—Risks Related to our Business and Industry—We may not be able to successfully complete product registration testing or clinical trials in a timely manner and at acceptable costs, or at all.”

COVID-19

The outbreak of respiratory illness caused by a novel coronavirus (COVID-19) and the economy slowdown and/or negative business sentiment which followed the outbreak have had a negative impact on the industry, and our business operations and financial condition have been and may continue to be adversely affected. The COVID-19 pandemic in China and the government measures in response have also resulted in temporary closure of many corporate offices, manufacturing facilities and factories across China. We imposed work-from-home policy and continued liaising with our customers and suppliers.

Since around December 2022, the PRC government has lifted most the COVID-19 restrictions. Significant numbers of our employees were infected by the COVID-19 in the following months. However, as of the date of annual report, all the infected employees had recovered and our business had returned to normal operations.

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The occurrence of natural disasters, including hurricanes, floods, earthquakes, tornadoes, fires and pandemic disease may adversely affect our business, financial condition or results of operations. The potential impact of a natural disaster on our results of operations and financial position is speculative and would depend on numerous factors. The extent and severity of these natural disasters determines their effect on a given economy. Although the long-term effect of diseases such as the COVID-19 pandemic, H5N1 “avian flu”, or H1N1, the swine flu, cannot currently be predicted, previous occurrences of avian flu and swine flu had an adverse effect on the economies of those countries in which they were most prevalent. An outbreak of a communicable disease in our market could adversely affect our business, financial condition and results of operations, and timely reporting obligations under Regulation S-X and Regulation S-K following our business combination. We cannot assure you that natural disasters will not occur in the future or that our business, financial condition and results of operations will not be adversely affected.

Key Components of Our Results of Operations

Revenues

We principally derived our revenue from the following sources:

We follow ASC 280, Segment Reporting, which requires that companies to disclose segment data based on how management makes decision about allocating resources to each segment and evaluating their performances. We have one reporting segment. Our chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing our performance.

Our long-lived assets are all located in China, and the amount of long-lived assets attributable to any individual other country is not material. The following table presents the Company’s revenue disaggregated by geographic region based on the location of customers for the years ended December 31, 2025, 2024 and 2023:

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The following table presents our revenues by customer types:

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The following table presents our revenues by product lines:

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Cost of Revenues

Our cost of revenues mainly consisted of (1) costs of other medical devices; (2) direct material costs for our proprietary MWA medical devices; (3) direct staff costs; (4) production overheads; and (5) distribution costs.

Gross Profit and Gross Margin

Our gross profit was US$27.2 million, US$32.7 million and US$18.9 million in 2023, 2024 and 2025, respectively. Our gross profit margin was 86.6%, 88.2% and 83.8% in 2023, 2024 and 2025, respectively.

Operating Expenses

Our operating expenses consist of selling and marketing expenses, general and administrative expenses and research and development expenses. The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of our total revenues, for the periods indicated.

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Selling and marketing expenses

Selling and marketing expenses primarily consisted of meeting expenses, salary cost relating to our sales and marketing personnel, share-based compensation expenses, and also included entertainment, travelling and other expenses relating to our marketing activities.

General and administrative expenses

General and administrative expenses primarily consisted of salary and compensation expenses relating to our finance, legal, human resources and executive office personnel, rental expenses, depreciation and amortization expenses, office overhead, share-based compensation expenses, professional service fees and travel and transportation costs.

Research and development (“R&D”) expenses

Research and development expenses primarily consisted of CRO (Contract Research Organization) and other research and development service fee and depreciation expense related to equipment used for research and development, compensation and benefit expenses relating to our research and development personnel, as well as office overhead and other expenses relating to our R&D activities.

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Other (expenses) income, net

Our other (expenses) income, net include (1) interest expenses; (2) interest income; (3) subsidy income, primarily including government subsidies which represented amounts granted by local government authorities as a general incentive for us to promote development of the local technology industry, and we record government subsidies in subsidy income upon received and when there is no further performance obligation; and (4) other expenses, net, which primarily representing penalty expenses and donations.

Income Tax Provision

We had provision for income taxes of US$1.7 million, US$1.5 million and US$1.2 million in 2023, 2024 and 2025, respectively. The decrease of provision for income taxes in 2024 was primarily due to the net loss incurred, more deductible R&D expenditure and the utilization net operating loss carried forward from the PRC entities. The decrease of provision for income taxes in 2025 was primarily due to the net loss incurred.

Net Loss/Income

We had net income of US$10.7 million, US$12.6 million and net loss of US$27.5 million in 2023, 2024 and 2025, respectively. Our net income margin was 33.9%, 34.0% and net loss margin was 122.2% in 2023, 2024 and 2025, respectively.

Management considered the primary factors contributing to the 2025 net loss as part of the Company’s going concern assessment. The net loss was primarily attributable to two factors, as discussed below:

The primary driver of the revenue decline in 2025 was a significant slowdown in purchasing activity among our customers in China. During 2025, certain hospital customers and procurement departments adopted more conservative purchasing and approval procedures in response to heightened regulatory scrutiny and compliance review procedures in China’s pharmaceutical and healthcare sector. As a result, hospital administrators and procurement departments adopted a more conservative approach and deferred non-essential capital equipment purchases and new technology adoptions to ensure compliance with ongoing audits.

We believe this was an industry-wide phenomenon affecting medical device sales in China during periods of regulatory intensification. We also believe that the decline represented a deferral of demand rather than a permanent loss of market share or obsolescence of our product portfolio. We believe that our products maintain their clinical utility and competitive positioning, and management anticipates a normalization of procurement cycles as the inspection wave moderates.

The 2025 net loss was also affected by two significant expense items that we do not view as reflective of our core operating run rate: stock-based compensation expenses and research and development expenses.

We believe these factors indicate that the 2025 net loss was primarily attributable to non-recurring expenses and strategic R&D investments, rather than a deterioration in our underlying operating performance. Specifically, the projected reduction in future R&D expenditures is not expected to adversely impact our revenue trajectory for two primary reasons:

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First, the increased research and development expenditures incurred during 2025 were primarily related to our efforts to obtain regulatory approvals and establish market access in new international markets, including South Korea, New Zealand and Argentina. These expenditures were principally associated with initial market entry initiatives rather than the support of our existing commercialized products and established revenue-generating markets. Accordingly, we believe that the anticipated reduction in research and development spending relating to these new markets is not expected to adversely affect revenue generated from our existing mature markets and established product portfolio.

Second, the elevated research and development expenditures incurred during 2025 primarily consisted of one-time validation, testing and registration-related costs necessary to obtain initial regulatory approvals and commercialization permits in overseas jurisdictions. Our underlying product technologies are already commercially established and technologically mature. As a result, we do not believe that substantial ongoing foundational research and development activities will be required following completion of the applicable approval processes. Once the relevant regulatory approvals are obtained, we expect research and development activities in these jurisdictions to transition primarily to lower-cost commercialization support, product maintenance and routine regulatory compliance activities. Accordingly, we expect future research and development expenditures to decline meaningfully from 2025 levels while continuing to support anticipated international revenue growth.

We believe that the anticipated reduction in future research and development cash expenditures, together with our expectation that its existing revenue base will be maintained, supports the feasibility of our plans to mitigate liquidity pressures. We also believe that these planned reductions in expenditures are not expected to materially adversely affect our ongoing operations, commercial activities or long-term business strategy. We also considered our historical profitability for the fiscal years ended December 31, 2024 and 2023. We believe this historical profitability supports its view that the 2025 net loss was driven primarily by temporary or non-recurring factors, rather than a fundamental deterioration in our business model, customer credit quality or ability to continue as a going concern.

Taxation

Cayman Islands

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution, brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.

British Virgin Islands

Our wholly-owned subsidiary in the British Virgin Islands, Tycoon Choice Global Limited and all dividends, interest, rents, royalties, compensation and other amounts paid by Tycoon Choice Global Limited to personas who are not resident in the British Virgin Islands and any capital gains realized with respect to any shares, debt obligations, or other securities of the Company by persons who are not resident in the British Virgin Islands are exempt from all provisions of the Income Tax Ordinance in the British Virgin Islands.

No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by persons who are not resident in the British Virgin Islands with respect to any shares, debt obligation or other securities of the Company.

All instruments relating to transfers of property to or by Tycoon Choice Global Limited and all instruments relating to transactions in respect of the shares, debt obligations or other securities of Tycoon Choice Global Limited and all instruments relating to other transactions relating to the business of Tycoon Choice Global Limited are exempt from payment of stamp duty in the British Virgin Islands. This assumes that Tycoon Choice Global Limited does not hold an interest in real estate in the British Virgin Islands.

There are currently no withholding taxes or exchange control regulations in the British Virgin Islands applicable to Tycoon Choice Global Limited or its members.

Hong Kong

Our subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax of 8.25% on activities conducted in Hong Kong.

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PRC

Under the EIT Law and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules define the term “de facto management body” as the body that exercises full and substantial control over and overall management of the business, productions, personnel, accounts and properties of an enterprise. In April 2009, SAT issued SAT Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although SAT Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in SAT Circular 82 may reflect the general position of SAT on how the “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China only if all of the following conditions are met: (1) the primary location of the day-to-day operational management is in the PRC; (2) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (3) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (4) at least 50% of voting board members or senior executives habitually reside in the PRC. We believe that our Cayman Islands holding company, is not a PRC resident enterprise for PRC tax purposes. Our Cayman Islands holding company is not controlled by a PRC enterprise or PRC enterprise group, and we do not believe that it meets all of the conditions above. For the same reasons, we believe our other entities outside of China are not PRC resident enterprises either. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body”. Therefore, there can be no assurance that the PRC government will ultimately take a view that is consistent with ours. If the PRC tax authorities determine that our Cayman Islands holding company is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the Ordinary Shares. In addition, non-resident enterprise shareholders (including the holders of the Ordinary Shares) may be subject to a 10% PRC tax on gains realized on the sale or other disposition of the Ordinary Shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders (including the holders of the Ordinary Shares) would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally apply at a rate of 20%. Any PRC tax imposed on dividends or gains may be subject to a reduction if a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of our Cayman Islands holding company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that our Cayman Islands holding company is treated as a PRC resident enterprise.

Provided that our Cayman Islands holding company is not deemed to be a PRC resident enterprise, holders of the Ordinary Shares who are not PRC residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of the Ordinary Shares. However, under SAT Bulletin 7 and SAT Bulletin 37, where a non-resident enterprise conducts an “indirect transfer” by transferring taxable assets, including, in particular, equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being required to file a return and being taxed under SAT Bulletin 7 and SAT Bulletin 37, and we may be required to expend valuable resources to comply with SAT Bulletin 7 and SAT Bulletin 37, or to establish that we should not be taxed thereunder.

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Results of Operations

The following table sets forth a summary of our consolidated results of operations for the years indicated. You should read this information together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of the results that may be expected for any future years or periods.

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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Revenues

Our total revenues decreased by 39.2% from US$37.0 million in 2024 to US$22.5 million in 2025, resulting in a net decrease of US$14.5 million. The overall decrease in our revenue was primarily due to a decrease in demand for, and sales of, MWA devices in 2025.

Our revenue from distributors increased from US$17.2 million in 2024 to US$18.4 million in 2025, resulting in a net increase of US$1.2 million. Changes in overall average sales prices increased revenue by approximately US$1.9 million, while changes in the volume of products sold decreased revenue by approximately US$0.7 million. With respect to the sales of MWA needles, revenue decreased due to a decrease in the number of units sold. With respect to the sales of MWA therapeutic apparatus, revenue increased due to increases in both the number of units sold and the selling price. The increase in revenue from sales of MWA therapeutic apparatus outweighed the decrease in revenue from sales of MWA needles, resulting in an overall increase in revenue from distributors. The change in revenue of sales of other medical devices was immaterial.

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Our revenue from direct customers decreased from US$19.8 million in 2024 to US$4.1 million in 2025, resulting in a net decrease of US$15.7 million. Changes in overall average sales prices decreased revenue by approximately US$1.1 million, while changes in the volume of products sold decreased revenue by approximately US$14.6 million. With respect to the sales of MWA needles and other medical devices, revenue decreased due to decreases in both the number of units sold and the selling price. With respect to the sales of MWA therapeutic apparatus, revenue decreased due to decreases in both the number of units sold and the selling price.

Cost of revenues

Our cost of revenues decreased by 16.7% from US$4.4 million in 2024 to US$3.7 million in 2025, resulting in a net decrease of US$0.7 million, primarily due to the overall decrease in revenue. Our cost of revenues mainly consisted of (i) costs of other medical devices; (ii) direct material costs for our proprietary MWA medical devices; (iii) direct staff costs; (iv) production overheads; and (v) distribution costs.

Gross profit and gross margin

As a result of the above, our gross profit decreased from US$32.7 million in 2024 to US$18.9 million in 2025, resulting in a net decrease of US$13.8 million. Our gross profit margin decreased from 88.2% in 2024 to 83.8% in 2025, resulting in a decrease of 4.4 percentage points.

Operating expenses

Selling and marketing expenses

Our selling and marketing expenses increased by US$6.2 million from US$4.1 million in 2024 to US$10.3 million in 2025, primarily due to (i) an increase in share-based compensation expenses from nil in 2024 to US$6.9 million in 2025, (ii) an increase in staff cost of US$0.9 million, from US$1.5 million in 2024 to US$2.4 million in 2025, due to an increase in sales personnel costs for the U.S. market, partially offset by (iii) an decrease in advertising expenses of US$1.4 million, from US$1.9 million in 2024 to US$0.5 million in 2025, and other individually immaterial decreases. Accordingly, our selling and marketing expenses accounted for 45.5% and 11.0% of our revenues in 2025 and 2024, respectively.

Research and development expenses

Research and development expenses primarily consisted of CRO (Contract Research Organization) and other research and development service fees, depreciation expense related to equipment used for research and development, compensation and benefit expenses relating to our research and development personnel, as well as office overhead and other expenses relating to our R&D activities. Our research and development expenses increased by US$13.9 million from US$6.2 million in 2024 to US$20.1 million in 2025, primarily due to an increase in research and development service fee of US$13.9 million, from US$4.2 million in 2024 to US$18.1 million in 2025. These service fees included FDA certification fees, CE Marking fee, and R&D expenditures on AI ablation systems and equipment. Accordingly, our research and development expenses accounted for 89.3% and 16.7% of our total revenues in 2025 and 2024, respectively.

General and administrative expenses

Our general and administrative expenses increased by US$7.0 million, from US$7.0 million in 2024 to US$14.1 million in 2025, primarily due to (i) an increase in share-based compensation expenses from nil in 2024 to US$9.6 million in 2025, partially offset by (ii) a decrease in legal and professional fees of US$2.2 million, primarily attributable to the non-recurring elevated legal and professional service fees incurred in 2024 in connection with the Company’s Business Combination and related listing matters.

Loss/income from operations

As a result of the above, we incurred a loss from operations of $25.6 million in 2025, as compared to an income from operations of $15.3 million in 2024.

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Other (expenses)/income, net

We incurred total other expenses, net of US$0.7 million in 2025, as compared to total other expenses, net of US$1.2 million in 2024, primarily because (1) our interest expense increased from US$0.6 million in 2024 to US$0.7 million in 2025, primarily due to increase in bank borrowings, (2) we incurred subsidy income of US$0.09 million in 2025, as compared to US$266 in 2024, and (3) our other expenses decreased from US$0.7 million in 2024 to US$0.1 million in 2025, primarily due to the administrative penalty in November 2024, we did not experience such kind of administrative penalty in 2025.

Loss/Income before income tax

As a result of the above, we incurred a loss before income tax of $26.4 million in 2025, as compared to an income before income tax of $14.1 million in 2024.

Income tax provision

Our provision for income tax decreased from US$1.5 million in 2024 to US$1.1 million in 2025, primarily due to net loss incurred in 2025.

Net loss/income

As a result of the above, we incurred a net loss of $27.5 million in 2025, as compared to a net income of $12.6 million in 2024.

Other comprehensive income or loss

Foreign currency translation adjustments amounted to a loss of US$1.1 million and a gain of US$1.8 million in 2024 and 2025, respectively.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Revenues

Our total revenues increased by 17.7% from US$31.5 million in 2023 to US$37.0 million in 2024, resulting in a net increase of US$5.5 million. The overall increase in our revenue was primarily attributable to an increase of approximately US$6.1 million in sales of MWA devices, partially offset by a decrease of approximately US$0.5 million in sales of other medical device.

Our revenue from direct customers increased from US$16.5 million in 2023 to US$19.8 million in 2024, resulting in a net increase of US$3.3 million. Changes in overall average sales prices decreased the revenue by approximately US$0.6 million, while changes in the volume of products sold increased the revenue by approximately US$3.9 million. With respect to the sales of MWA needles, revenue increased by approximately US$3.5 million due to an increase in sales volume. With respect to the sales of MWA therapeutic apparatus, revenue increased by approximately US$0.3 million due to increases in both the quantity of sales and the selling price. With respect to the sales of other medical devices, revenue decreased by approximately US$0.5 million due to decreases in both the quantity of sales and the selling price. The increase in revenue from the sales of MWA needles and MWA therapeutic apparatus outweighed the decrease in revenue from the sales of other medical devices, resulting in an overall increase in revenue from direct customers.

Our revenue from distributors increased from US$15.0 million in 2023 to US$17.2 million in 2024, resulting in a net increase of US$2.2 million. Changes in overall average sales prices decreased revenue by approximately US$0.2 million, while changes in the volume of products sold increased revenue by approximately US$2.4 million. With respect to the sales of MWA needles, revenue increased by approximately US$4.0 million primarily due to an increase in sales volume. This increase was partially offset by an aggregate decrease of approximately US$1.8 million in revenue from sales of MWA therapeutic apparatus and other medical devices, primarily due to decreases in sales volume. The increase in revenue from the sales of MWA needles outweighed the decrease in revenue from the sales of MWA therapeutic apparatus and other medical devices, resulting in an overall increase in revenue from distributors.

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Cost of revenues

Our cost of revenues increased by 3.7% from US$4.2 million in 2023 to US$4.4 million in 2024, resulting in a net increase of US$0.2 million, primarily due to the overall increase in revenue from sales of MWA devices. Our cost of revenues mainly consisted of (i) costs of other medical devices; (ii) direct material costs for our proprietary MWA medical devices; (iii) direct staff costs; (iv) production overheads; and (v) distribution costs.

Gross profit and gross margin

As a result of the above, our gross profit increased from US$27.2 million in 2023 to US$32.7 million in 2024, resulting in a net increase of US$5.5 million, and our gross profit margin increased from 86.6% in 2023 to 88.2% in 2024, representing an increase of 1.6 percentage points. The increase in gross margin was primarily due to a higher proportion of revenue generated from sales of MWA devices, which generally have higher gross margins than other medical devices.

Operating expenses

Selling and marketing expenses

Our selling and marketing expenses increased by US$1.6 million from US$2.5 million in 2023 to US$4.1 million in 2024, primarily due to (i) a decrease in advertising expenses of US$0.9 million, from US$1.0 million in 2023 to US$1.9 million in 2024, (ii) an increase in staff cost of US$0.4 million, from US$1.2 million in 2023 to US$1.6 million in 2024, due to an increase in the sales personnel costs for the U.S market, (iii) an increase in travel expenses of US$0.2 million, from US$77,225 in 2023 to US$258,774 in 2024. Accordingly, our selling and marketing expenses accounted for 11.0% and 8.1% of our revenues in 2024 and 2023, respectively.

Research and development expenses

Research and development expenses primarily consisted of CRO (Contract Research Organization) and other research and development service fee, depreciation expense related to equipment used for research and development, compensation and benefit expenses relating to our research and development personnel, as well as office overhead and other expenses relating to our R&D activities. Our research and development expenses increased by US$1.9 million from US$4.3 million in 2023 to US$6.2 million in 2024, primarily due to an increase in research and development service fee of US$1.4 million, from US$2.8 million in 2023 to US$4.2 million in 2024. These service fees included FDA certification fees, CE Marking fees, and R&D expenditures on AI ablation systems and equipment. Accordingly, our research and development expenses accounted for 16.7% and 13.6% of our total revenues in 2024 and 2023, respectively.

General and administrative expenses

Our general and administrative expenses decreased from US$8.5 million in 2023 to US$7.1 million in 2024, resulting in a net decrease of $1.4 million, primarily due to a decrease in net allowance for expected credit losses on accounts receivable, from US$2.2 million in 2023 to US$1.2 million in 2024. In 2024, the net allowance for expected credit losses was US$2.3 million, partially offset by recoveries of allowance for expected credit losses of US$1.1 million.

Income from operations

As a result of the above, income from operations increased by 29.1% from US$11.9 million in 2023 to US$15.3 million in 2024.

Other (expenses)/income, net

We incurred total other expenses, net of US$1.2 million in 2024, as compared to total other income, net of US$0.5 million in 2023, primarily because (1) our interest expense increased from US$0.3 million in 2023 to US$0.6 million in 2024, primarily due to increase in bank borrowings, (2) we incurred subsidy income of US$266 in 2024, as compared to US$0.8 million in 2023, and (3) our other expenses increased from US$10,211 in 2023 to US$0.6 million in 2024, primarily due to the administrative penalty in November 2024.

Income before income tax

As a result of the above, our income before income tax increased from US$12.4 million in 2023 to US$14.1 million in 2024.

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Income tax provision

Our provision for income tax decreased from US$1.7 million in 2023 to US$1.5 million in 2024, primarily due to more deductible R&D expenditure and the utilization net operating loss carried forward from the PRC entities.

Net income

As a result of the above, our net income increased from US$10.7 million in 2023 to US$12.6 million in 2024.

Other comprehensive income or loss

Foreign currency translation adjustments amounted to a loss of US$0.7 million and a loss of US$1.1 million in 2023 and 2024, respectively.

B. Liquidity and Capital Resources

Liquidity and Capital Resources

As of December 31, 2024 and 2025, we had cash and restricted cash of US$3.0 million and US$0.6 million, respectively. There was no restricted cash as of December 31, 2024. The restricted cash amount was US$0.4 million as of December 31, 2025. The restricted cash as of December 31, 2025 was lifted in January 2026. As of December 31, 2025, we had a working capital balance of $22.6 million. As of March 31, 2026, our cash balance increased to approximately US$1.6 million.

Accounts Receivable Turnover Days, Subsequent Collection and Collectability Assessment

As of December 31, 2025, our net accounts receivable balance was US$42.5 million, of which US$39.7 million was overdue based on contractual payment terms ranging from 30 to 180 days. The overdue status was primarily attributable to a combination of factors, including the intensified anti-corruption campaign in China’s pharmaceutical and healthcare sector, which has contributed to a longer collection cycle for by prompting hospital customers to adopt more stringent internal payment approval procedures, and the lengthy payment cycles of hospital customers.

Although our standard contractual payment terms generally range from 30 to 180 days, we may, in practice, agree to extended payment arrangements with certain customers on a case-by-case basis. In evaluating whether to grant an extended payment arrangement, we consider customer-specific factors, including the purchase volume, the length of the customer relationship, the historical payment and default records, and our expected future business relationship with the customer. The length of any extended payment arrangement varies depending on the specific customers and the relevant circumstances. In certain cases, upon customer request, payment may be delayed beyond the original contractual payment terms. We review each request for an extension individually and approves such request only when management believes the extension is in our best interests.

Historically, we have not charged or collected material late payment fees from customers, because we intended to maintain positive working relationships with customers and has not otherwise experienced significant historical defaults. However, we continue to reserve its contractual rights to demand payment upon expiration of the applicable payment period. For certain customers, the need for extended payment arrangements has been driven primarily by lengthy internal payment approval processes and delays resulting from external factors, including heightened compliance review procedures in China’s pharmaceutical and healthcare sector.

We considered these factors, together with subsequent collections, historical collection patterns, payment plans agreed with major customers, and its allowance for expected credit losses, in assessing the collectability of the December 31, 2025 accounts receivable balance.

As of December 31, 2023, 2024 and 2025, our accounts receivable turnover days were 337 days, 412 days and 777 days, respectively. We calculated accounts receivable turnover days using the following formula:

Average accounts receivable × 360 days ÷ sales revenue = accounts receivable turnover days, average accounts receivable equals the sum of the opening accounts receivable balance and the closing accounts receivable balance divided by two.

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As of December 31, 2024, our gross accounts receivable balance was US$50.6 million. As of December 31, 2025, our gross accounts receivable balance decreased to US$47.3 million, representing a decrease of approximately 7% from December 31, 2024. For the year ended December 31, 2025, our revenue decreased to US$22.5 million by 39.2% from 2024. As a result of the significant decline in revenue and the continued lengthening of collection cycles, the net accounts receivable balance as of December 31, 2025 was $42.5 million (i.e., gross accounts receivable balance less allowance for expected credit losses), representing 188.9% of total revenue for 2025. Management believes this disproportionate relationship was primarily attributable to the continued delay in collections from prior periods and, in certain cases, further delays resulting from more stringent internal payment approval procedures at customers.

Between December 31, 2025 and the issuance date of the financial statements (i.e., April 24, 2026), we received collections of approximately US$4.6 million relating to accounts receivable outstanding as of December 31, 2025, representing approximately 10.8% of our net accounts receivable balance of US$42.5 million as of such date. As of December 31, 2025, we had 65 customers with outstanding accounts receivable balances. Among these customers, 14 customers were individually evaluated and determined to present collectability concerns. In accordance with ASC 326, we recorded an allowance for expected credit losses of approximately US$2.1 million relating to these customers.

The remaining 51 customers comprised our active accounts receivable portfolio, for which management continued to expect substantial recoverability. As of April 24, 2026, 24 of these 51 customers had made partial or full payments on their outstanding balances as of December 31, 2025. The accounts receivable balance attributable to these 24 customers was approximately US$32.2 million as of December 31, 2025, representing approximately 75.8% of our net accounts receivable balance of US$42.5 million as of such date.

We considered the collection of approximately US$4.6 million through April 24, 2026, together with the fact that 24 customers with significant outstanding balances had made partial or full subsequent payments, as indicators of ongoing collection activity subsequent to year-end. Management believes that these subsequent collections support its assessment that the overdue status of the relevant accounts receivable balances was primarily attributable to customers extended internal payment review and approval procedures, including delays associated with heightened compliance review measures in China’s pharmaceutical and healthcare sector, rather than customers’ inability or unwillingness to make payment.

We generate revenue from the sale of medical devices to hospitals through two primary channels: (i) direct customers, including sales directly to hospitals or through deliverers, and (ii) distributors. As of December 31, 2025, distributors accounted for 48% of our US$42.5 million accounts receivable balance, while direct customers accounted for the remaining 52%.

Hospitals generally have lengthy internal payment review and approval procedures. As a result, payments may be completed after the contractual due date due to internal administrative and approval processes, in which case the contractual payment terms may not strictly be followed as a result.

In 2024 and 2025, anti-corruption enforcement and heightened compliance review procedures in China’s pharmaceutical and healthcare sector affected the payment approval processes of certain hospital customers. In response to these developments, certain customers implemented enhanced internal review and approval procedures for payments. These procedures resulted in temporary delays in payment processing and further extended our collection cycles.

Management believes that these delays were primarily administrative and procedural in nature and did not reflect a deterioration in the underlying creditworthiness of the relevant customers. In reaching this view, management considered our subsequent collection activity after year-end, including the collection of approximately US$4.6 million through April 24, 2026, the fact that 24 customers with significant outstanding balances had made partial or full subsequent payments, historical collection patterns, and payment plans agreed with major customers.

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We believe it is appropriate to calculate current expected credit losses using both an individual basis and an aging group basis. For the aging group basis, we consider historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and recoveries in assessing lifetime expected credit losses. We apply expected credit loss rates of: 3% for balances aged within one year; 10% for balances aged between one and two years; 15% for balances aged between two and three years; and100% for balances aged over three years. For the individual basis analysis, we perform a qualitative, case-by-case assessment of each significant customer’s receivable balance. For each customer, management considers factors including: the length and history of the relationship with the customer; the customer’s historical default record and payment patterns; the customer’s current financial condition; the customer’s creditworthiness; and our future business prospects with the customer.

Based on this qualitative analysis, management determines the appropriate allowance for expected credit losses for each customer evaluated on an individual basis.

We recorded allowances for expected credit losses of US$4.8 million and US$4.0 million as of December 31, 2025 and 2024, respectively, representing 10.1% and 7.9% of the corresponding total accounts receivable balances.

Based on historical loss rates, current customer creditworthiness, and reasonable and supportable forecasts, we believe that its allowance for expected credit losses was adequate.

Between the issuance date of the financial statements (i.e., April 24, 2026) and May 29, 2026, we collected approximately US$1.2 million in accounts receivable outstanding as of December 31, 2025, representing approximately 2.8% of our net accounts receivable balance of US$42.5 million as of December 31, 2025.

As of May 29, 2026, 25 of these 51 customers had made partial or full payments on their outstanding balances as of December 31, 2025. The accounts receivable balance attributable to these 25 customers was approximately US$32.3 million as of December 31, 2025, representing approximately 76.0% of our net accounts receivable balance of US$42.5 million as of such date.

Expected Future Collections:

Management evaluated the expected future collections of the remaining accounts receivable balance outstanding as of December 31, 2025 based on the following factors:

(i)our historical collection patterns and subsequent actual collection status;

(ii)payment plans agreed with major customers.

Management considered these factors collectively in evaluating the collectability of the remaining accounts receivable balance. In particular, management believes that the historical collection record and subsequent payment records with major customers indicate continued collection activity, while the expected normalization of hospital payment approval processes supports management’s view that the current delays are primarily timing-related.

Based on this assessment, management believes that the substantial majority of the remaining accounts receivable balance outstanding as of December 31, 2025 will be collected.

We continue to closely monitor its accounts receivable portfolio. Management regularly reviews the aging status, payment trends, and any emerging indicators of collectability risk relating to significant customers. This ongoing monitoring process includes, but is not limited to:

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If, during the course of this ongoing monitoring process, we obtain evidence indicating that collection of certain accounts receivable balances is no longer probable, for example, where a customer declares bankruptcy, fails to honor payment commitments, or becomes subject to prolonged governmental restrictions affecting its ability to pay, we will record additional allowances for expected credit losses, as appropriate. Any such adjustments, if required, would be reflected in our interim financial statements for the six-month period ending June 30, 2026 and its annual report for fiscal year ending December 31, 2026.

Tabular Presentation of Gross Accounts Receivable, Aging, Credit Losses, Customer Categories, and 2026 Payments

An aging analysis of our gross amount of accounts receivable calculated from the expiration date of the customer’s credit terms is as follows:

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The following table further summarizes our accounts receivable and allowance for expected credit losses by customer type as of December 31, 2025 for each category (i.e. for distributors and for direct customers):

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As of December 31, 2025, we had 65 customers with outstanding accounts receivable balances. Among these customers, 14 customers were individually evaluated and determined to present collectability concerns. In accordance with ASC 326, we recorded an allowance for expected credit losses of approximately US$2.1 million relating to these customers.

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Of these 14 customers: (i) two customers were distributors. The aggregate accounts receivable balance attributable to these two distributor customers represented approximately 0.5% of the total gross accounts receivable balance as of December 31, 2025; (ii)12 customers were direct customers. The aggregate accounts receivable balance attributable to these 12 direct customers represented approximately 4.0% of the total gross accounts receivable balance as of December 31, 2025.

Through May 29, 2026, we received $5.8 million in collections from the December 31, 2025 gross accounts receivables balance. These payments relate primarily to receivables aged within 1 year and 1‑2 years. Of the $5.8 million collected:(i) $4.8 million was collected from distributors, representing approximately 82.8% of the total collections through May 29, 2026. (ii)$1.0 million was collected from direct customers, representing approximately 17.2% of the total collections through May 29, 2026.

Extended Payment Arrangements – Amount, Material Terms, and Categorization

As of December 31, 2025, we had agreed to extended payment arrangements with certain customers on a case‑by‑case basis. The total gross accounts receivable balance subject to such extended arrangements was approximately $39.7 million. Of this amount, $15.6 million related to distributors, representing approximately 39.1% of the total gross accounts receivables subject to extended arrangements, and $24.1 million related to direct customers, representing approximately 60.9% of the total.

Material terms of extended payment arrangements include: (i) Duration. Extensions days depending on the customer’s circumstances, purchase volume, and historical relationship. (ii) Contractual rights. We reserve all contractual rights to demand payment upon expiration of the extended period and does not waive any rights to pursue collection, including legal action, if necessary.

For purposes of calculating the allowance for expected credit losses, we age all accounts receivable based on the original contractual payment terms, regardless of whether an extended payment arrangement has been subsequently agreed with the customer.

The following table reflects. category of these extended payment arrangements amounts

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Hospital Processing Time, Anti‑Corruption Campaign Impact, Product‑Specific Processing Differences, and Expected Stabilization

The intensified anti‑corruption campaign in China’s pharmaceutical and healthcare sector began to have a noticeable impact on hospital payment processing in 2024, with the effects becoming more pronounced throughout the full year of 2025. The campaign prompted hospitals to implement more stringent internal review procedures, including:

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The difference in processing time observed between MWA needles and MWA therapeutic apparatus is not driven by the nature of the products themselves, but rather by hospital-specific factors and regional variations in approval workflows. Furthermore, processing times vary significantly across different hospitals and regions, depending on factors such as: The hospital's tier and internal organizational structure; Regional regulatory environments and compliance requirements; The maturity of the hospital's internal approval systems; The intensity of local anti-corruption campaign enforcement.

Consequently, the processing time differential between the two product categories is primarily a function of hospital-level administrative procedures and regional practices, rather than product-specific characteristics.

Management expects hospital payment processing times to gradually stabilize and improve beginning in the second half of 2026, based on the following projected timeline:

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The expected timeline described above is based on a combination of:

(i)Historical industry experience with regulatory cycles;

(ii)Informal peer communications and industry consensus;

(iii)Insights gathered from medical conferences and industry forums;

(iv)Direct feedback from hospital customers through ongoing relationship management; and

While these sources provide a reasonable basis for management’s expectations, we acknowledge that actual developments may differ from current expectations due to unforeseen regulatory changes or other external factors beyond our control. Management continues to monitor the situation closely and will update its assessments as further information becomes available.

Detailed discussion for the issues with the distributor portion of the significantly overdue net accounts receivable balance

As of December 31, 2025, distributors portion of overdue net accounts receivable balance accounted for 41.0% ($14.4 million) of the overdue net accounts receivable balance. Although the anti‑corruption campaign primarily affects hospitals, not distributors. However, the distributor portion of overdue AR is nevertheless significantly impacted by the same external factors for the following reasons:

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Our standard contractual payment terms with distributors generally range from 30 to 180 days, depending on the following factors:

In practice, we may enter into subsequent supplemental agreements with distributors on a case‑by‑case basis, which may contain extended credit terms, subject to applicable conditions.

Expected Collection Timeline and Current Asset Classification

Between December 31, 2025 and the issuance date of the financial statements (i.e., April 24, 2026), we received collections of approximately US$4.6 million relating to accounts receivable outstanding as of December 31, 2025, representing approximately 10.8% of our net accounts receivable balance of US$42.5 million as of such date.

Based on a comprehensive assessment that considers (i) seasonality factors – historically, our collections are concentrated in the second half of the year, with the first half being a slower season, and management expects significant collections to occur in the second half of 2026; and (ii) extended payment arrangements agreed with certain customers, management believes that the substantial majority of the December 31, 2025 accounts receivable balance will be collected within one year from the balance sheet date. Accordingly, we have classified the entire accounts receivable balance as a current asset in accordance with ASC 210‑10‑45.

Subsequent to the issuance of the financial statements on April 24, 2026, management continued to closely monitor the collection of accounts receivable outstanding as of December 31, 2025.

Between December 31, 2025 and the issuance date of the financial statements (April 24, 2026), we received collections of approximately $4.6 million relating to accounts receivable outstanding as of December 31, 2025, representing approximately 10.8% of our net accounts receivable balance of $42.5 million as of such date. However, in the approximately one‑month period between the financial statement issuance date (April 24, 2026) and May 29, 2026, we collected only an additional $1.2 million from the accounts receivable balance of December 31, 2025. This represented only 2.8% of the $42.5 million net accounts receivable balance, below the pace management had anticipated at the time of the financial statement issuance.

The slower‑than‑expected collection velocity during this approximately one‑month period prompted management to re‑evaluate its collection expectations for the remaining balance of approximately $36.7 million (after deducting the cumulative $5.8 million collected through May 29, 2026). The downward adjustment in the expected collection timeline was driven by the following factors:(i) while the first half of the year is historically a slower collection season, the actual collection volume observed between April 25,2026 and May 29, 2026 fell short of management’s expectations based on historical patterns for the same period. (ii) despite management’s earlier expectation that hospital payment approval processes would gradually normalize in the second half of 2026, actual progress through in the approximately one‑month period (May 2026) indicated that the recovery in payment processing has been more gradual than initially anticipated. Hospitals continue to apply enhanced compliance review procedures related to the anti‑corruption campaign.

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Revised Collection Timeline

As a result of the updated assessment, with respect to the remaining balance of approximately $36.7 million balance, management currently expects collections as follows: Approximately $10.0 million is expected to be collected during the remainder of 2026; and the remaining approximately $26.7 million is expected to be collected during 2027.

Ongoing Monitoring

We continue to closely monitor collection progress and will reassess its expectations on an ongoing basis. Should actual collection trends deviate materially from expectations, we will re‑evaluate the classification of the accounts receivable balance on the future financial reports, and adjust the classification between current and non‑current assets in accordance with ASC 210‑10‑45.

If our existing cash resources are insufficient to meet our working capital requirements, we may seek to issue equity or equity-linked securities or debt securities or obtain financing from banks and other third parties. The sale of equity or equity-linked securities would result in additional dilution to our shareholders, while the incurrence of indebtedness could subject us to operating and financial covenants that restrict our operations and ability to pay dividends to our shareholders. There is no assurance that we will be successful in raising funds, obtaining sufficient funding on terms acceptable to us, or if at all, which could have a material adverse effect on our business, financial condition and results of operations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Securities—The issuance of additional share capital in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other shareholders.”

Cash Flows Analysis

The following table sets forth a summary of our cash flows for the years indicated.

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Operating activities

Net cash used in operating activities was US$1.3 million in 2025, primarily due to net loss of US$27.5 million, as adjusted by (1) certain non-cash items, including depreciation of property, plant and equipment of US$1.1 million, Share-based compensation of US$17.5 million, and (2) changes in working capital that positively affected our operating cash flows, including a decrease in trade receivables of US$5.3 million, a decrease in prepayments of US$1.4 million, an increase in trade payables of US$0.5 million, partially offset by changes in working capital that negatively affected our operating cash flows, including a decrease in other payables and accrued expenses of US$0.5 million, and an decrease in operating lease liabilities of US$0.3 million.

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Net cash used in operating activities was US$6.3 million in 2024, primarily due to net income of US$12.6 million, as adjusted by (1) certain non-cash items, including additions charged to allowance for expected credit losses of US$2.3 million, recovery of allowance for expected credit losses of US$1.1 million, and depreciation of property, plant and equipment of US$1.1 million, and (2) changes in working capital that negatively affected our operating cash flows, including an increase in trade receivables of US$17.8 million, a decrease in other payables of $1.6 million and an increase in prepayments of US$4.7 million, partially offset by changes in working capital that positively affected our operating cash flows, including an increase in trade payables of US$0.7 million and an increase in tax payables of US$2.2 million.

Net cash used in operating activities was US$1.0 million in 2023, primarily due to net income of US$10.7 million, as adjusted by (1) certain non-cash items, including additions charged to allowance for expected credit losses of US$2.2 million and depreciation of property, plant and equipment of US$1.0 million, and (2) changes in working capital that negatively affected our operating cash flows, including an increase in trade receivables of US$9.7 million, an increase in prepayments of US$5.3 million, and a decrease in tax payables of US$1.0 million, partially offset by changes in working capital that positively affected our operating cash flows, including an increase in other payables and accrued expenses of US$1.2 million.

Investing activities

Net cash used in investing activities was US$42,315 in 2025, primarily due to purchase of property and equipment.

Net cash used in investing activities was approximately US$2.5 million, US$2.7 million in 2024 and 2023, primarily due to purchase of property and equipment.

Financing activities

Net cash used in financing activities was approximately US$1.4 million in 2025, primarily due to repayments of short-term bank loans of US$17.8 million and repayment of long-term loan of US$2.3 million, partially offset by withdrawal of short-term bank loans of US$11.5 million, proceeds from long-term loan of US$6.4 million, and proceeds of Interest-free advances for operation from related parties of US$0.9 million.

Net cash provided by financing activities was approximately US$10.3 million in 2024, primarily due to proceeds from PIPE investment of US$2.9 million, proceeds from short-term bank loans of US$19.3 million, and proceeds from long-term loan of US$2.8 million, partially offset by repayment of short-term bank loans of US$11.0 million, repayment of long-term loan of US$0.8 million and payment of listing cost of US$2.9 million.

Net cash provided by financing activities was approximately US$3.5 million in 2023. During the fiscal year 2023, we had withdrawal of short-term bank loans of approximately US$9.6 million, and repayments of short-term bank loans of approximately US$7.5 million, and proceeds from long-term loan of approximately US$2.5 million and repayment of long-term loan of approximately US$0.2 million, and repayment of Interest-free advances for operation to a related party of approximately US$0.1 million, and payment of listing cost of US$0.9 million.

Capital Expenditure

We incurred capital expenditure of US$2.6 million, US$2.9 million and US$42,315 in 2023, 2024 and 2025, respectively, primarily in connection with purchase of R&D equipment. We intend to fund our future capital expenditure through our existing cash balance, bank borrowings, proceeds from the Business Combination and other financing alternatives. We will continue to incur capital expenditure to support the growth of our business.

Off-Balance Sheet Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

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C. Research and Development, Patents and Licenses, etc.

See “Item 4. Information on the Company—B. Business Overview—Research and Development” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”

D. Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the 2025 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.

E. Critical Accounting Policies and Estimate

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) current expected credit losses; and (iii) income taxes. See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies.

We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates. An accounting estimate is considered critical if it is made basing on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We believe that the following critical accounting estimate involves the most significant judgments used in the preparation of our financial statements.

Expected credit losses in 2023

We recorded an allowance for expected credit losses of US$2.8 million as of December 31, 2023.

In the first half of 2023, we used an individual basis and pool basis of the customers sharing similar risk characteristics by applying the roll rate method under the Current Expected Credit Loss Model (“CECL Model”). We have identified the relevant risk characteristics of its customers and the related receivables and other receivables which include size, type of the products we provide, or a combination of these characteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include customer demographics, payment terms offered in the normal course of business to customers, and industry-specific factors that could impact our receivables. Additionally, external data and macroeconomic factors are also considered. They are assessed at each quarter based on our specific facts and circumstances. We use roll rate method to calculate average expected loss rate under pool basis. We consider the co-relationship between micro economic environment and overall default rate and calculated the future adjustment indicator use logistic regression model.

For the second half year of 2023, we still used an individual basis and pool basis to assess credit losses. When reassessing our methodology for calculating expected credit losses for customers sharing similar risk characteristics, we changed from using roll rate method to aging group method. This change in technique is based on newly obtained information and is considered an accounting estimate change.

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According to ASC 326-20-30-7, we evaluated both internally generated data and reasonably accessible external data. The change was driven by the following factors:

The change in the estimated credit loss rate was applied prospectively starting in the second half of 2023. This change is based on the analysis conducted during the preparation of financial statements as of December 31, 2023, and is expected to provide a more accurate reflection of our credit risk.

As a result of this change in accounting estimate, the allowance for expected credit losses for accounts receivable as of December 31, 2023, is summarized below:

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We use an individual basis and pool basis to assess credit losses. For the individual basis assessment, we perform a qualitative, case-by-case assessment of each significant customer’s receivable balance. For each customer, management considers a variety of factors, including but not limited to: the longevity and history of the relationship with the customer, the customer’s historical default record and payment patterns, the customer’s current financial condition, the customer’s creditworthiness, and our future business prospects with the customer. Based on this comprehensive qualitative analysis, management determines the appropriate amount of allowance for expected credit losses for each specific customer on an individual basis.

Expected credit losses in 2024

We recorded an allowance for expected credit losses of US$4.0 million as of December 31, 2024. For the year ended December 31, 2024 individual basis analysis, we perform a qualitative, case-by-case assessment of each significant customer’s receivable balance. For each customer, management considers a variety of factors, including but not limited to: the longevity and history of the relationship with the customer, the customer’s historical default record and payment patterns, the customer’s current financial condition, the customer’s creditworthiness, and our future business prospects with the customer. Based on this comprehensive qualitative analysis, management determines the appropriate amount of allowance for expected credit losses for each specific customer on an individual basis.

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The allowance for expected credit losses for accounts receivable as of December 31, 2024 is summarized below:

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Current Expected Credit Losses in 2025

We recorded an allowance for expected credit losses of US$4.8 million as of December 31, 2025. For the year ended December 31, 2025 individual basis analysis, we perform a qualitative, case-by-case assessment of each significant customer’s receivable balance. For each customer, management considers a variety of factors, including but not limited to: the longevity and history of the relationship with the customer, the customer’s historical default record and payment patterns, the customer’s current financial condition, the customer’s creditworthiness, and our future business prospects with the customer. Based on this comprehensive qualitative analysis, management determines the appropriate amount of allowance for expected credit losses for each specific customer on an individual basis.

The allowance for expected credit losses for accounts receivable as of December 31, 2025 is summarized below: