Exhibit 99.1 bioAffinity Technologies Reports First Quarter 2025 Results CyPathLung sales up 276% year-over-year SAN ANTONIO, Texas (May 15, 2025) – bioAffinity Technologies, Inc. (Nasdaq: BIAF; BIAFW), a biotechnology company focused on the need for accurate, noninvasive tests for the detection of early-stage lung cancer and other lung diseases, today reported financial results for the three months ended March 31, 2025. Key Highlights Management Commentary "We began 2025 with strong momentum, delivering 27 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(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, 2024 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 19 ...

Revenue Performance - Revenue for the three months ended March 31, 2025, was $12,003, a decrease of 84.7% compared to $78,739 for the same period in 2024[53][61] Cost and Expenses - Cost of revenue for the three months ended March 31, 2025, was $30,862, down 55.1% from $68,498 in the same period in 2024[62] - Research and development expenses increased by $201,099, or 15%, to $1,567,992 for the three months ended March 31, 2025, compared to $1,366,893 in 2024[63] - General and administrative expenses rose by $46,133, or 5%, to $899,821 for the three months ended March 31, 2025, from $853,688 in 2024[64] - Sales and marketing expenses increased by $21,549, or 7%, to $338,160 for the three months ended March 31, 2025, compared to $316,611 in 2024[65] Operational Loss - Loss from operations for the three months ended March 31, 2025, was $2,824,832, a 12% increase from the loss of $2,526,951 in 2024[66] - Net loss for the three months ended March 31, 2025, was $2,703,024, a 9% increase from the net loss of $2,469,626 in 2024[67] Financial Position - Cash and cash equivalents at March 31, 2025, were $13.7 million, with net working capital of $13.4 million[68] Cash Flow - Operating activities resulted in cash outflows of $2,066,774 for the three months ended March 31, 2025, compared to $1,875,295 in 2024[70][71] Interest Income - Net interest income for the three months ended March 31, 2025, was $121,808, compared to $57,325 in the same period in 2024[67]

Financial Performance - Net sales for the three months ended March 31, 2025, were $8,009,619, representing a 29.6% increase from $6,176,499 in the same period of 2024[15] - Gross profit for the nine months ended March 31, 2025, was $6,667,444, compared to $2,867,684 for the same period in 2024, indicating a significant increase[15] - The company reported a net loss of $637,706 for the three months ended March 31, 2025, compared to a net loss of $1,310,320 for the same period in 2024, showing an improvement[15] - Total net sales for the nine months ended March 31, 2025, reached $39,159,629, up 58.8% from $24,679,824 in the same period of 2024[34] - The net loss attributable to the Parent Company for the nine months ended March 31, 2025, was $72,495, a significant improvement compared to a net loss of $2,297,180 for the same period in 2024[23] - Comprehensive loss for the three months ended March 31, 2025, was $641,515, compared to a comprehensive loss of $1,457,081 in the same period of 2024[15] Assets and Liabilities - Total current assets increased to $43,943,839 as of March 31, 2025, up from $40,220,460 as of June 30, 2024[13] - Total liabilities rose to $11,377,761 as of March 31, 2025, compared to $10,343,831 as of June 30, 2024[13] - The company’s cash and cash equivalents increased to $12,802,614 as of March 31, 2025, from $12,266,556 as of June 30, 2024[13] - As of March 31, 2025, the total stockholders' equity was $38,333,973, an increase from $36,375,998 as of June 30, 2024, reflecting a growth of approximately 5%[18] - Total current liabilities increased to $10.26 million as of March 31, 2025, compared to $9.09 million as of June 30, 2024, reflecting an increase of approximately 12.9%[13] Research and Development - Research and development expenses for the nine months ended March 31, 2025, were $2,745,763, up from $2,531,279 in the same period of 2024[15] - Research and development costs were $794,213 for the three months ended March 31, 2025, slightly down from $811,470 for the same period in 2024[15] Income and Expenses - The company recorded a litigation settlement income of $1,000,000 during the three months ended March 31, 2025[15] - The company recorded an income tax expense of $218,199 for the nine months ended March 31, 2025, compared to an income tax benefit of $577,981 for the same period in 2024[72] - The company recorded an income tax expense of $2,592 for the three months ended March 31, 2025, compared to an income tax benefit of $312,764 for the same period in 2024, indicating a shift in tax position[72] Cash Flow - The company reported a net cash used in operating activities of $490,230 for the nine months ended March 31, 2025, a significant reduction from $6,972,515 in the same period of the previous year[23] - The company reported a net cash increase of $536,058 for the nine months ended March 31, 2025, contrasting with a decrease of $5,236,792 in the previous year[24] Inventory and Receivables - The company’s accounts receivable increased to $3,004,809 as of March 31, 2025, from $1,155,060 as of June 30, 2024[50] - Contract liabilities totaled $765,316 as of March 31, 2025, compared to $158,771 as of June 30, 2024, indicating a significant increase in undelivered products and accrued marketing development funds[51] - As of March 31, 2025, the company recorded inventory reserves of $91,482 for obsolete or slow-moving inventory[64] Joint Ventures and Partnerships - The company formed a joint venture corporation, Sigbeat, with a total capital contribution of $5 million, where it owns 60%[122] - The company entered into a joint venture with Forge International Co., Ltd., forming Sigbeat, which is expected to enhance its market presence in telecommunications modules[28] Operational Efficiency - The company anticipates continued growth in net sales and improvements in operational efficiency in the upcoming quarters[11] - The company accrued a commission of $643,656 to a customer for marketing support during the nine months ended March 31, 2025, compared to $247,592 for the same period in 2024, representing an increase of approximately 159%[87] Legal Matters - FTI, a subsidiary, is involved in litigation with Partron Co., Ltd., claiming damages of $8,126,786 under the South Korean Unfair Competition Prevention Act[105] - The company agreed to a settlement of $2.4 million related to a shareholder litigation, which is reflected in liabilities under "accrued legal contingency expense"[107] Cybersecurity and Compliance - The company has a cybersecurity risk management program in place, with no identified incidents materially affecting operations as of March 31, 2025[132] - The company has no material unrecognized tax benefits as of March 31, 2025, suggesting a stable tax compliance environment[72]

Exhibit 99.1 Ideal Power Reports First Quarter 2025 Financial Results AUSTIN, TX – May 15, 2025 -- Ideal Power Inc. (Nasdaq: IPWR) ("Ideal Power," the "Company," "we," "us" or "our"), developer and innovative provider of the highly efficient and broadly patented B-TRAN® bidirectional semiconductor power switch, reports results for its first quarter ended March 31, 2025. "We had a strong start to the year as we completed SSCB prototypes related to our first design win three months ahead of schedule. We expec ...

Financial Performance - For the three months ended March 31, 2025, the company reported revenue of $13,712,528, a decrease from $14,584,473 in the same period of 2024, representing a decline of approximately 6%[254]. - The net loss for the three months ended March 31, 2025, was $818,097, an improvement from a net loss of $1,866,690 in the corresponding period in 2024, indicating a reduction of approximately 44%[254]. - Revenue for the three-month period ended March 31, 2025, decreased by approximately 5.98% compared to the same period in 2024, primarily due to unfavorable foreign exchange movements and a marginal decrease in sales from Cosmofarm SA[256]. - Gross profit for the three months ended March 31, 2025, was $2,049,799, representing an increase of 53.7% compared to the same period in 2024, driven by a favorable revenue composition[260]. - Total operating expenses decreased by $286,790, or approximately 9.05%, to $2,882,944 for the three-month period ended March 31, 2025, reflecting disciplined cost management[261]. - The Company reported a net loss of $818,097 for the period ended March 31, 2025, with positive working capital of $1,259,012 compared to a negative working capital of $296,193 as of December 31, 2024[273][268]. - Cash generated from financing activities increased to $560,862 for the three-month period ended March 31, 2025, compared to $206,942 during the same period in 2024, driven by lower debt repayments and new financing arrangements[271]. - The foreign currency translation adjustment improved to a gain of $1,031,268 for the three-month period ended March 31, 2025, compared to a loss of $599,276 in the prior year[265]. Strategic Acquisitions and Growth - The acquisition of Bikas is expected to increase annual revenue by more than $10 million and enhance gross margins due to economies of scale[251]. - The company completed the acquisition of Cloudscreen for a total purchase price of $637,080, which includes 280,000 shares of common stock and cash to be settled in 2024[252]. - The company signed a definitive agreement to acquire ZipDoctor Inc. for a total sum of $150,000, enhancing its telemedicine capabilities[248]. - The company has made several strategic acquisitions to enhance its manufacturing, marketing, and R&D capabilities, strengthening its core product technology infrastructure[285]. Product Development and Innovation - The company has created and developed proprietary branded nutraceutical products, with over 160 product codes, aiming for high growth opportunities in the nutraceutical market[232]. - Innovation efforts include accelerating R&D on IP-driven products like CCX0722 for obesity and CCDL24 for gastrointestinal disorders, alongside the acquisition of the AI-driven drug repurposing platform "Cloudscreen®"[293]. - The proprietary biocide C-Sept Pro 2% combines 76% Isopropyl Alcohol and 2% chlorhexidine digluconate, while C-Scrub Wash 4% CHG is approved by the WHO for human use[294]. - The company’s portfolio includes Melatonin Spray® for insomnia, Otikon™ ear drops for ear pain, and Bio-bebe® organic infant care products[295][296][297]. Market Expansion and Distribution - The company anticipates receiving orders of more than 500,000 units in the first year and in excess of 3,000,000 units over the next five years for its Sky Premium Life products in the UAE[246]. - The company has established a distribution network exceeding 1,500 pharmacies in Greece, supported by upgraded robotic systems for efficient operations[231]. - The company aims to expand its sales distribution networks in new regions such as the UAE and Eastern Europe while strengthening market share in core markets[293]. - The Company plans to expand its brand name products and evaluate acquisition targets to enhance distribution, including a significant exclusive distribution agreement in the UAE[277]. Financial Outlook and Concerns - The Company anticipates using cash from debt or equity financing to conduct business in the upcoming year, with substantial doubt existing about its ability to continue as a going concern[272][278]. - The company intends to allocate funds for working capital, R&D, and marketing, although actual expenditures may differ due to industry uncertainties[288]. - As of March 31, 2025, there were no off-balance sheet arrangements reported[300]. - The company has net operating loss carry-forwards applicable to future taxable income in the United States, with income tax liabilities in the UK and Greece[311]. Operational Efficiency - Cost of Goods Sold (COGS) decreased by $1,588,118 or approximately 11.99%, amounting to $11,662,729 for the three-month period ended March 31, 2025, due to a shift towards higher-margin product lines[257]. - Management's strategy includes enhancing manufacturing capacities and building a multinational network of wholesalers, distributors, and pharmacies to support growth[281]. - The company continues to execute its "Growth Strategy" focusing on high-margin segments and proprietary brands such as Sky Premium Life®, Mediterranation®, and C-Sept® / C-Scrub® with launches in new geographical regions[283].

Financial Performance - The company reported net losses of $24.1 million for Q1 2025, compared to $19.3 million for Q1 2024, with an accumulated deficit of $919.7 million as of March 31, 2025[151]. - Collaboration revenue decreased by $6.5 million, from $9.2 million for the three months ended March 31, 2024 to $2.8 million for the three months ended March 31, 2025[172]. - Net loss increased by $4.8 million, from $19.3 million for the three months ended March 31, 2024 to $24.1 million for the same period in 2025[171]. - Net cash used in operating activities was $29.3 million for the three months ended March 31, 2025, compared to $32.7 million for the same period in 2024[181]. - Total operating expenses decreased by $2.98 million, from $30.2 million for the three months ended March 31, 2024 to $27.3 million for the same period in 2025[171]. - Research and development expenses totaled $18.3 million for the three months ended March 31, 2025, a decrease of $0.3 million from $18.7 million in the same period of 2024[173]. - General and administrative expenses decreased by $2.6 million, from $11.6 million for the three months ended March 31, 2024 to $8.9 million for the same period in 2025[175]. Cash Position - As of March 31, 2025, the company had cash and cash equivalents of $102.3 million, which is expected to fund operations into mid-2026[151]. - Net cash provided by investing activities was $27.0 million in Q1 2025, a significant improvement from net cash used of $72.5 million in Q1 2024, primarily due to maturities of marketable securities[183]. - Net cash used in financing activities was $3.1 million in Q1 2025, down from net cash provided of $5.8 million in Q1 2024, mainly due to debt principal payments[184]. - The company anticipates increased cash expenditures related to ongoing development, clinical trials, and potential commercialization of product candidates[185]. - As of March 31, 2025, the company has borrowed $25.0 million under the New Credit Facility, with $5.2 million of principal repaid[180]. - The company may need to raise additional funds through equity offerings, debt financings, or strategic collaborations, with no assurance of success in obtaining sufficient funding[186][189]. Clinical Development - The ongoing Phase 1 clinical trial of Emi-Le has shown a confirmed objective response rate (ORR) of 31% among evaluable patients with "B7-H4 high" tumor expression, an increase from the previous 23% reported[144]. - The company plans to report initial clinical data from the expansion portion of the Phase 1 trial of Emi-Le in the second half of 2025[145]. - The company is currently enrolling patients in the dose escalation portion of the Phase 1 trial of XMT-2056, with initial pharmacodynamic data expected in 2025[145]. - The company has entered into a global collaboration with GSK for the co-development and commercialization of XMT-2056, which targets a novel HER2 epitope[149]. - The company is focusing on advancing the clinical development of Emi-Le and XMT-2056 while reducing research activities and internal pipeline development efforts[146]. Restructuring and Cost Management - The company has implemented a strategic restructuring plan, reducing approximately 55% of its employee base, expected to be completed by Q3 2025, incurring estimated costs of $4-5 million[146][147]. - The company has discontinued the development of upifitimab rilsodotin (XMT-1536) and completed the related restructuring by December 31, 2023[148]. - Significant external costs for manufacturing and clinical trials are incurred, with total research and development costs at $18.3 million for the three months ended March 31, 2025[162]. - The company expects to incur significant research and development expenses over the next several years as it continues clinical development and manufacturing efforts[166]. Market and Risk Factors - The interest rate on the New Credit Facility is sensitive to changes, with a principal balance of $19.8 million outstanding as of March 31, 2025[195]. - The company is exposed to market risk related to interest rates, but believes that a 100 basis points change would not materially affect the fair market value of its investment portfolio[194]. - There were no material changes to contractual obligations during the three months ended March 31, 2025[192].

Company Structure and Regulatory Risks - The company operates as a Marshall Islands holding company, conducting almost all operations through subsidiaries in China and Hong Kong, which poses unique risks to investors holding shares of its Common Stock[26]. - The company has obtained necessary licenses and approvals for its operations in China, but there is no assurance that it will always be able to renew these licenses in a timely manner[45]. - Recent regulatory actions by the Chinese authorities may impact the company's operations, including enhanced supervision over companies listed overseas and anti-monopoly enforcement[47]. - The company may face significant risks if the PRC government disallows its holding company structure, potentially leading to a material change in operations and a decline in the value of its shares[48]. - The Holding Foreign Companies Accountable Act may result in the company's securities being prohibited from trading on U.S. exchanges if its auditor is not subject to PCAOB inspection for two consecutive years[33]. - The China Securities Regulatory Commission (CSRC) introduced the Overseas Listing Trial Measures effective March 31, 2023, requiring domestic companies to file for overseas listings[50]. - Non-compliance with CSRC regulations could lead to penalties, adversely affecting the ability to list on U.S. exchanges and potentially causing a significant decline in securities value[52]. - The company faces uncertainties regarding the interpretation and application of PRC laws related to its previous VIE structure, which could lead to severe penalties[142]. - The PCAOB has determined it is unable to inspect or investigate registered public accounting firms in mainland China and Hong Kong, which could adversely affect the company's operations and stock value[181]. - The SEC approved Nasdaq's revised proposals to impose stricter criteria on companies operating in "Restrictive Markets," which may impact the company's listing status[178]. Financial Performance and Dividend Distribution - The company has not established cash management policies, and no dividends or distributions have been made to shareholders as of the date of the Annual Report[37]. - Current PRC regulations permit PRC operating subsidiaries to pay dividends only out of accumulated profits, which may restrict the ability to distribute dividends to the holding company[38]. - A withholding tax of 10% applies to dividends payable by Chinese companies to non-PRC-resident enterprises, which may reduce the amount of dividends received by the holding company from its PRC subsidiaries[42]. - The company relies on dividends from its PRC subsidiaries for cash and financing requirements, and any limitations on these distributions could adversely affect its liquidity[38]. - The company’s ability to pay dividends in the future depends on the financial performance of its PRC subsidiaries, which must meet specific reserve fund requirements[149]. - The company relies on dividends from its PRC subsidiaries for cash requirements, and any limitations on these payments could materially affect its business operations[146]. Market and Competitive Environment - The largest customer, Hefei Liantuo Tianji E-commence Corporation Ltd., accounted for 42% of revenue at $21,003,414 for the year ended December 31, 2024, down from 74% at $23,621,588 for the year ended December 31, 2023[76]. - The company faces intense competition in the cross-border merchandise and tourism industries, which may negatively affect its market share and financial results[66]. - The company’s growth may strain existing resources, leading to challenges in managing operational, administrative, and financial capabilities[68]. - Negative publicity regarding the company or its products could adversely affect its reputation and stock price, regardless of accuracy[71]. - The company is vulnerable to natural disasters and geopolitical uncertainties, which could disrupt operations and adversely affect financial results[117]. Operational Risks and Challenges - The company relies on its supply chain management to minimize inventory risks and maintain operational efficiency, but inaccuracies in demand forecasting could lead to inventory write-offs or shortages[77]. - The company’s technology infrastructure is critical for operations, and any disruptions could materially affect business results[80]. - The company’s brand portfolio is essential for attracting and retaining customers, and failure to maintain it could harm business prospects[70]. - The company allows order cancellations and product returns, which could negatively impact inventory turnover and cash flow if rates increase significantly[84]. - The company relies on third-party product suppliers and manufacturers, which may affect its operational efficiency if they fail to meet standards[86]. - Inventory management is critical, as mismanagement could lead to adverse operating results due to demand fluctuations and seasonality[89]. - The company faces risks of inventory obsolescence and write-downs if favorable credit terms with suppliers are not negotiated[91]. - The company’s dependence on third-party platforms for sales means that disruptions or adverse changes in those platforms could harm its operations[82]. Regulatory Compliance and Legal Risks - Regulatory compliance is essential, as failure to obtain necessary licenses could result in administrative penalties and operational disruptions[92]. - Risks include potential severe penalties if VIE contractual arrangements are deemed non-compliant with PRC regulations[63]. - The evolving PRC regulatory environment regarding cybersecurity and data protection poses challenges that could materially impact business operations[64]. - The company may face penalties for non-compliance with PRC regulations regarding employee benefits and tax withholdings[8]. - The company must implement new operational and financial systems to accommodate growth, which may strain resources and affect the ability to meet increased demand[131]. Economic and Trade Environment - Changes in international trade policies and tariffs could materially affect financial performance and operations in China[64]. - The Chinese economy's growth has been uneven and slowing, which may adversely affect the company's business and operating results[154]. - The company is closely monitoring potential changes in international trade policy and assessing their impact on business operations and financial performance due to rising tariffs and trade disputes, particularly between the U.S. and China[155]. - Recent U.S. tariffs on goods imported from China have increased costs, potentially necessitating price increases for U.S. customers, which could affect competitiveness[159]. - The uncertain nature of global economic conditions, including the ongoing Russia-Ukraine war and tensions in the Middle East, may lead to significant disruptions and rising commodity prices[155]. Cybersecurity and Data Protection - Cybersecurity threats are increasing, necessitating significant investment in security measures to protect sensitive information and maintain service reliability[101]. - The company utilizes third-party technology, which poses risks of cyber-attacks that could indirectly affect its operations[106]. - New regulations in China regarding personal information protection and cross-border data transfers may impose additional compliance costs and operational challenges[170][171]. - The evolving regulatory environment in China regarding cybersecurity and data protection poses risks that could materially affect the company's business operations and reputation[169]. - The company has not faced any investigations or sanctions related to personal information compliance as of the report date, but uncertainties remain regarding future regulatory interpretations[172]. Labor and Employment Regulations - Increases in labor costs and stricter labor laws in China may adversely impact profitability[207]. - Average wages in China have risen and are expected to continue increasing, affecting overall labor costs[207]. - Non-compliance with labor-related laws may lead to fines and adversely affect financial condition[209]. - Companies must participate in government-mandated employee benefit plans, which can vary by location[210]. - Failure to comply with SAFE regulations regarding stock incentive plans may result in fines and limit capital contributions[211]. Financial Liabilities and Insurance - The company does not carry key-man life insurance or product liability insurance, which could expose it to significant financial risks[137]. - The company may incur liabilities not covered by insurance, which could materially impact its financial condition[137]. - The PRC legal system's uncertainties, including rapid changes in laws and regulations, could limit legal protections for the company and affect its operations[166].

Regulatory Environment - The company operates as a Marshall Islands holding company, conducting almost all operations through subsidiaries in China and Hong Kong, which poses unique risks to investors[26]. - Current PRC regulations allow PRC subsidiaries to pay dividends only from accumulated profits, which may restrict the company's ability to satisfy liquidity requirements[38]. - The PRC government imposes capital controls that could affect the ability to remit dividends to foreign shareholders[39]. - The Holding Foreign Companies Accountable Act may lead to the delisting of the company's shares from U.S. exchanges if auditors are not subject to PCAOB inspection for two consecutive years[33]. - Recent regulatory actions in China may increase scrutiny over offshore offerings and foreign investments, potentially affecting the company's operations[47]. - The China Securities Regulatory Commission (CSRC) introduced the Overseas Listing Trial Measures effective March 31, 2023, requiring PRC domestic companies to file with the CSRC for overseas listings[50]. - Non-compliance with CSRC regulations could lead to penalties, adversely affecting the ability to list on U.S. exchanges and potentially causing a significant decline in the value of securities[52]. - The evolving PRC regulatory environment poses risks related to cybersecurity, information security, and data protection, which could materially affect business operations[64]. - The Foreign Investment Law may impose restrictions on the company's operations and ability to finance business activities in China[145]. - The Chinese government has indicated an intent to exert more oversight over foreign investments and offerings, which could limit the company's ability to offer securities and negatively impact their value[163]. - New cybersecurity regulations in China require companies handling large amounts of data to undergo reviews before listing abroad, potentially affecting the company's operations[164]. - The Personal Information Protection Law in China mandates strict guidelines on the processing of personal information, which could lead to penalties for non-compliance[170]. - Regulatory uncertainties in the PRC legal system may limit legal protections and increase the risk of costly administrative and court proceedings[166]. - The PCAOB has determined it is unable to inspect or investigate registered public accounting firms in mainland China and Hong Kong, which could adversely affect the company's operations and stock value[181]. - The SEC has approved Nasdaq's revised proposals to impose stricter criteria on companies operating in "Restrictive Markets," which may impact the company's listing status[178]. - The SEC's interim final rules under the HFCAA require additional disclosures from companies, potentially increasing compliance costs and operational uncertainties[179]. Financial Performance and Risks - The company has not established cash management policies, and no dividends have been distributed to shareholders as of the report date[37]. - A withholding tax of 10% applies to dividends payable by Chinese companies to non-PRC-resident enterprises, which may be reduced to 5% under certain conditions[42]. - The company relies on dividends from PRC subsidiaries for cash and financing needs, which may be limited by PRC regulations[38]. - The company faces risks related to the interpretation and enforcement of PRC laws, which could materially affect business operations and financial results[30]. - The company may rely on dividends from PRC subsidiaries to fund cash requirements, and limitations on these payments could adversely affect operations[63]. - The company faces intense competition in the cross-border merchandise and tourism industries, which may negatively affect its market share and financial results[66]. - The company’s revenue is highly dependent on a few major customers, and losing these customers could significantly impact financial performance[76]. - The company may face legal claims related to customer conduct and intellectual property rights, which could divert management resources and incur substantial legal costs[123][125]. - The company may experience trade barriers and taxes that could reduce international business capabilities and harm profitability[127]. - Rising costs associated with inflation and U.S. tariffs on imports from China are expected to increase operating expenses, potentially impacting profitability, especially in the airline reselling business[158]. - Recent U.S. tariffs on a range of goods imported from China have directly increased the cost of products, leading to a potential rise in prices for U.S. customers, which may affect competitiveness[159]. - The uncertain future of tariff policies and their impact on inflation could significantly influence the company's business, with no assurance of being able to fully absorb or mitigate negative financial impacts[160]. - The Chinese economy's growth has been uneven and slowing, which may adversely affect demand for the company's services and overall competitive position[154]. - The company may incur liabilities not covered by insurance, which could materially impact its financial condition[136]. Operational Challenges - The company faces challenges in pursuing growth through acquisitions due to certain PRC regulations[64]. - The company must adapt to rapid technological changes in the industry, as failure to innovate could render its products and services less competitive[81]. - The company allows order cancellations and product returns, which could adversely affect inventory turnover and cash flow if rates increase significantly[84]. - The company relies on third-party product suppliers and manufacturers, which may affect its operational efficiency and reputation if they fail to meet standards[86]. - Inventory management is critical, as mismanagement could lead to adverse operating results due to demand fluctuations and inability to return unsold products[89]. - The company faces risks of inventory obsolescence and significant write-downs if favorable credit terms with suppliers are not negotiated[91]. - The company’s technology infrastructure is critical for operations, and any interruptions or failures could materially affect business results[80]. - The company must implement new operational and financial systems to accommodate growth, which may strain resources and affect the ability to meet increased product demand[131]. - The company is vulnerable to natural disasters and geopolitical uncertainties, which could disrupt operations and adversely affect financial performance[117]. - Seasonal fluctuations in sales volume are expected, which may cause stock price volatility[95]. - The company faces uncertainties regarding reporting and implications of past and future transactions involving PRC taxable assets, such as offshore restructuring and share sales in offshore subsidiaries[219]. Human Resources and Labor Issues - The competition for qualified personnel in the cross-border merchandise and tourism industries is intense, which may increase costs and impact future growth[122]. - Increases in labor costs and stricter labor laws in China may adversely affect profitability and operational results[207]. - Average wages in China have been rising, impacting overall labor costs for the company[207]. - Non-compliance with labor-related laws may lead to fines and adversely affect financial condition[209]. - Failure to comply with employee benefit plans and tax withholding requirements may result in penalties[210]. Cybersecurity and Data Protection - The company currently does not possess personal information of over one million users, thus not subject to cybersecurity review by the CAC[54]. - Cybersecurity threats are increasing, and the company invests in advanced security measures to protect sensitive information and maintain service availability[101]. - The use of third-party software poses risks, as interruptions or compliance failures could disrupt service quality and lead to legal liabilities[104]. - The company has implemented a comprehensive open-source software approval process to mitigate legal and operational risks associated with third-party software[108]. - The company faces significant risks related to the performance and reliability of telecommunications and internet infrastructure in China, which could adversely affect margins if service costs rise significantly[109]. - The company operates in a sector that does not involve user data collection, thus currently not subject to the new cybersecurity review requirements, but future regulatory changes could pose risks[165]. - The evolving PRC regulatory environment regarding cybersecurity and data protection may adversely affect the company's business and results of operations[169].

Q1 2025 Financial Highlights: Exhibit 99.1 KARTOON STUDIOS Q1 2025 REVENUE SOARS 56% OVER PRIOR YEAR - COMPANY ON TRACK FOR PROFIT BY END OF YEAR Mainframe Animation Unit Achieves Profitability, with Revenue up 138% Over Prior Year Quarter and 29% Sequentially. Four Straight Quarters of Growth, Zero Long-Term Debt, Profitable Animation Studio, Profitable Kids Streaming service, and Valuable IP Projects Set the Stage for Investor Value Creation BEVERLY HILLS, CA – May 15, 2025 – Kartoon Studios (NYSE America ...