What changed in Zhongchao Inc.'s 2025 10-K compared to 2024?

Across the narrative sections we track, Zhongchao Inc. (ZCMD) added 425 paragraphs, removed 411, and edited 295 between the 2024 and 2025 10-K filings. The biggest movers are Item 3. Legal Proceedings (+152/−117), Item 4. Mine Safety Disclosures (+150/−117), Item 5. Market for Registrant's Common Equity (+86/−117).

What changed in Zhongchao Inc.'s MD&A (Item 7) in 2025?

Item 7 Management's Discussion & Analysis shows 12 new/edited paragraphs and 16 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Zhongchao Inc.'s Legal Proceedings (Item 3) change in 2025?

Item 3 shows 152 added/edited paragraphs and 117 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this ZCMD 10-K diff come from?

The source filings are Zhongchao Inc.'s official 2024 and 2025 Form 20-F annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Zhongchao Inc.'s 20-F — 2024 vs 2025

Paragraph-level year-over-year comparison of Zhongchao Inc.'s 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+425 added−411 removedSource: 20-F (2026-04-03) vs 20-F (2025-04-25)

Top changes in Zhongchao Inc.'s 2025 20-F

425 paragraphs added · 411 removed · 295 edited across 5 sections

Item 3. Legal Proceedings+152 / −117 · 98 edited
Item 4. Mine Safety Disclosures+150 / −117 · 103 edited
Item 5. Market for Registrant's Common Equity+86 / −117 · 63 edited
Item 6. [Reserved]+25 / −44 · 20 edited
Item 7. Management's Discussion & Analysis+12 / −16 · 11 edited

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

98 edited+54 added−19 removed608 unchanged

2024 filing

2025 filing

Biggest changeSelected Condensed Consolidated Balance Sheets Data December 31, 2024 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Cash and cash equivalents $ 1,088,565 $ 2,392,807 $ 5,280 $ 4,354,654 $ - $ 7,841,306 Short-term investment 4,040,000 1,202,441 - - - 5,242,441 Accounts receivable - - - 4,682,320 - 4,682,320 Other current assets 54,383 27,853 - 858,914 - 941,150 Total current assets 5,182,948 3,623,101 5,280 9,895,888 - 18,707,217 Investment in subsidiaries, VIE and VIE’s subsidiaries 5,113,612 - - (5,113,612 ) - Property and equipment, net - 1,661,000 - 4,206,154 - 5,867,154 Total non-current assets 5,113,612 1,661,000 - 5,516,736 (5,113,612 ) 7,177,736 Amount due from the Company and its subsidiaries 12,247,807 - 27,400 - (12,275,207 ) - Total Assets $ 22,544,367 $ 5,284,101 $ 32,680 $ 15,412,624 $ (17,388,819 ) $ 25,884,953 Total current liabilities $ - $ 16,226 $ - $ 1,514,204 $ - $ 1,530,430 Total non-current liabilities - - - 203,470 - 203,470 Amounts due to the Company and its subsidiaries - 11,056,078 - 483,800 (11,539,878 ) - Total Liabilities - 11,072,304 - 2,201,474 (11,539,878 ) 1,733,900 Total Shareholders’ Equity (Deficit) 22,544,367 (5,788,203 ) 32,680 13,211,150 (5,848,941 ) 24,151,053 Total Liabilities and Shareholders’ Equity $ 22,544,367 $ 5,284,101 $ 32,680 $ 15,412,624 $ (17,388,819 ) $ 25,884,953 5 December 31, 2023 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Cash and cash equivalents $ 150,071 $ 1,948,232 $ 6,829 $ 5,443,562 $ - $ 7,548,694 Short-term investment 5,241,677 656,132 - - - 5,897,809 Accounts receivable - - - 2,552,738 - 2,552,738 Other current assets 143,208 8,909 - 2,559,688 - 2,711,805 Total current assets 5,534,956 2,613,273 6,829 10,555,988 - 18,711,046 Investment in subsidiaries, VIE and VIE’s subsidiaries 5,756,419 - - (5,756,419 ) - Property and equipment, net - 1,524,676 - 1,697,576 - 3,222,252 Total non-current assets 5,756,419 1,690,547 - 4,015,050 (5,756,419 ) 5,705,597 Amount due from the Company and its subsidiaries 7,948,307 - 26,760 - (7,975,067 ) - Total Assets $ 19,239,682 $ 4,303,820 $ 33,589 $ 14,571,038 $ (13,731,486 ) $ 24,416,643 Total current liabilities $ - $ 3,389 $ - $ 2,674,972 $ - $ 2,678,361 Total non-current liabilities - - - 700,112 - 700,112 Amounts due to the Company and its subsidiaries - 6,910,884 - 564,652 (7,475,536 ) - Total Liabilities - 6,914,273 - 3,939,736 (7,475,536 ) 3,378,473 Total Shareholders’ Equity (Deficit) 19,239,682 (2,610,453 ) 33,589 10,631,302 (6,255,950 ) 21,038,170 Total Liabilities and Shareholders’ Equity $ 19,239,682 $ 4,303,820 $ 33,589 $ 14,571,038 $ (13,731,486 ) $ 24,416,643 Selected Condensed Consolidated Statements of Operations Data For the year ended December 31, 2024 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Revenues $ - $ - $ - $ 15,864,773 $ - $ 15,864,773 Costs of revenue $ - $ - $ - $ 6,952,560 $ - $ 6,952,560 Gross profit $ - $ - $ - $ 8,912,213 $ - $ 8,912,213 Share of (loss) income of subsidiaries, VIE and VIE’s subsidiaries $ (642,807 ) $ 2,532,747 $ 2,532,739 $ - $ (4,422,679 ) $ - Net (loss) income $ (643,229 ) $ (642,807 ) $ 2,532,747 $ 2,902,555 $ (4,422,679 ) $ (273,413 ) For the year ended December 31, 2023 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Revenues $ - $ - $ - $ 19,433,945 $ - $ 19,433,945 Costs of revenue $ - $ - $ - $ (10,921,753 ) $ - $ (10,921,753 ) Gross profit $ - $ - $ - $ 8,512,192 $ - $ 8,512,192 Share of loss of subsidiaries, VIE and VIE’s subsidiaries $ (11,440,721 ) $ (10,809,427 ) $ (10,809,444 ) $ - $ 33,059,592 $ - Net loss $ (11,335,911 ) $ (11,440,721 ) $ (10,809,427 ) $ (10,780,772 ) $ 33,059,592 $ (11,307,239 ) 6 For the year ended December 31, 2022 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Revenues $ - $ - $ - $ 14,151,516 $ - $ 14,151,516 Costs of revenue $ - $ - $ - $ (7,794,852 ) $ - $ (7,794,852 ) Gross profit $ - $ - $ - $ 6,356,664 $ - $ 6,356,664 Share of loss of subsidiaries, VIE and VIE’s subsidiaries $ (2,919,423 ) $ (1,545,868 ) $ (1,545,868 ) $ - $ 6,011,159 $ - Net loss $ (2,940,891 ) $ (2,919,423 ) $ (1,545,868 ) $ (1,427,296 ) $ 6,011,159 $ (2,822,319 ) Selected Condensed Consolidated Cash Flows Data For the year ended December 31, 2024 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Net cash provided by (used in) operating activities $ 198,117 $ 878,538 $ (1,382 ) $ 1,528,919 $ (4,077,435 ) $ (1,473,243 ) Net cash used in investing activities $ (3,097,823 ) $ (521,865 ) $ - $ (2,487,565 ) $ 4,299,500 $ (1,807,753 ) Net cash provided by financing activities $ 3,838,200 $ - $ - $ - $ - $ 3,838,200 For the year ended December 31, 2023 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Net cash (used in) provided by operating activities $ (193,778 ) $ (2,351,935 ) $ 17 $ 1,124,613 $ 1,475,312 $ 54,229 Net cash (used in) provided by investing activities $ (3,766,367 ) $ 1,530,264 $ - $ (43,240 ) $ (1,475,312 ) $ (3,754,655 ) Net cash provided by financing activities $ - $ - $ - $ - $ - $ - For the year ended December 31, 2022 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Net cash provided by (used in) operating activities $ 139,309 $ (1,198,586 ) $ 13,660 $ 383,877 $ $ (661,740 ) Net cash used in investing activities $ (1,638,455 ) $ (509,185 ) $ - $ (2,837,473 ) $ 1,638,455 $ (3,346,658 ) Net cash provided by financing activities $ 1,850,744 $ 1,638,455 $ - $ - $ (1,638,455 ) $ 1,850,744 A. [Reserved] B.

Biggest changeSelected Condensed Consolidated Balance Sheets Data December 31, 2025 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Cash and cash equivalents $ 79,976 $ 1,300,918 $ 795,297 $ 5,921,884 $ - $ 8,098,075 Short-term investment 1,750,059 4,074,498 - - - 5,824,557 Accounts receivable - - - 2,782,693 - 2,782,693 Other current assets 26,493 57,483 1,863 170,962 - 256,801 Total current assets 1,856,528 5,432,899 797,160 8,875,539 - 16,962,126 Investment in subsidiaries, VIE and VIE’s subsidiaries 2,443,215 - - (2,443,215 ) - Property and equipment, net - 1,735,579 - 4,141,645 - 5,877,224 Total non-current assets 2,443,215 1,828,907 - 5,355,813 (2,443,215 ) 7,184,720 Amount due from the Company and its subsidiaries 15,639,807 - - - (15,639,807 ) - Total Assets $ 19,939,550 $ 7,261,806 $ 797,160 $ 14,231,352 $ (18,083,022 ) $ 24,146,846 Total current liabilities $ - $ 16,449 $ - $ 1,510,181 $ - $ 1,526,630 Total non-current liabilities - - - 22,260 - 22,260 Amounts due to the Company and its subsidiaries - 14,422,923 761,183 (284,799 ) (14,899,307 ) - Total Liabilities - 14,439,372 761,183 1,247,642 (14,899,307 ) 1,548,890 Total Shareholders’ Equity (Deficit) 19,939,550 (7,177,566 ) 35,977 12,983,710 (3,183,715 ) 22,597,956 Total Liabilities and Shareholders’ Equity $ 19,939,550 $ 7,261,806 $ 797,160 $ 14,231,352 $ (18,083,022 ) $ 24,146,846 5 December 31, 2024 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Cash and cash equivalents $ 1,088,565 $ 2,392,807 $ 5,280 $ 4,354,654 $ - $ 7,841,306 Short-term investment 4,040,000 1,202,441 - - - 5,242,441 Accounts receivable - - - 4,682,320 - 4,682,320 Other current assets 54,383 27,853 - 858,914 - 941,150 Total current assets 5,182,948 3,623,101 5,280 9,895,888 - 18,707,217 Investment in subsidiaries, VIE and VIE’s subsidiaries 5,113,612 - - (5,113,612 ) - Property and equipment, net - 1,661,000 - 4,206,154 - 5,867,154 Total non-current assets 5,113,612 1,661,000 - 5,516,736 (5,113,612 ) 7,177,736 Amount due from the Company and its subsidiaries 12,247,807 - 27,400 - (12,275,207 ) - Total Assets $ 22,544,367 $ 5,284,101 $ 32,680 $ 15,412,624 $ (17,388,819 ) $ 25,884,953 Total current liabilities $ - $ 16,226 $ - $ 1,514,204 $ - $ 1,530,430 Total non-current liabilities - - - 203,470 - 203,470 Amounts due to the Company and its subsidiaries - 11,056,078 - 483,800 (11,539,878 ) - Total Liabilities - 11,072,304 - 2,201,474 (11,539,878 ) 1,733,900 Total Shareholders’ Equity (Deficit) 22,544,367 (5,788,203 ) 32,680 13,211,150 (5,848,941 ) 24,151,053 Total Liabilities and Shareholders’ Equity $ 22,544,367 $ 5,284,101 $ 32,680 $ 15,412,624 $ (17,388,819 ) $ 25,884,953 Selected Condensed Consolidated Statements of Operations Data For the year ended December 31, 2025 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Revenues $ - $ 270,931 $ - $ 11,374,996 $ (270,931 ) $ 11,374,996 Costs of revenue $ - $ - $ - $ 6,521,028 $ (267,573 ) $ 6,253,455 Gross profit $ - $ 270,931 $ - $ 4,853,968 $ (3,358 ) $ 5,121,541 Share of loss of subsidiaries, VIE and VIE’s subsidiaries $ (2,670,397 ) $ (1,277,578 ) $ (1,279,395 ) $ - $ 5,227,370 $ - Net loss $ (6,310,153 ) $ (2,670,397 ) $ (1,277,578 ) $ (784,109 ) $ 5,227,370 $ (5,814,867 ) For the year ended December 31, 2024 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Revenues $ - $ - $ - $ 15,864,773 $ - $ 15,864,773 Costs of revenue $ - $ - $ - $ 6,952,560 $ - $ 6,952,560 Gross profit $ - $ - $ - $ 8,912,213 $ - $ 8,912,213 Share of (loss) income of subsidiaries, VIE and VIE’s subsidiaries $ (642,807 ) $ 2,532,747 $ 2,532,739 $ - $ (4,422,679 ) $ - Net (loss) income $ (643,229 ) $ (642,807 ) $ 2,532,747 $ 2,902,555 $ (4,422,679 ) $ (273,413 ) 6 For the year ended December 31, 2023 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Revenues $ - $ - $ - $ 19,433,945 $ - $ 19,433,945 Costs of revenue $ - $ - $ - $ (10,921,753 ) $ - $ (10,921,753 ) Gross profit $ - $ - $ - $ 8,512,192 $ - $ 8,512,192 Share of loss of subsidiaries, VIE and VIE’s subsidiaries $ (11,440,721 ) $ (10,809,427 ) $ (10,809,444 ) $ - $ 33,059,592 $ - Net loss $ (11,335,911 ) $ (11,440,721 ) $ (10,809,427 ) $ (10,780,772 ) $ 33,059,592 $ (11,307,239 ) Selected Condensed Consolidated Cash Flows Data For the year ended December 31, 2025 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Net cash provided by operating activities $ 93,470 $ 2,014,370 $ 768,425 $ 1,339,326 $ (3,370,200 ) $ 845,391 Net cash used in investing activities $ (1,102,059 ) $ (3,116,540 ) $ - $ - $ 3,392,000 $ (826,599 ) Net cash provided by financing activities $ - $ - $ - $ - $ - $ - For the year ended December 31, 2024 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Net cash provided by (used in) operating activities $ 198,117 $ 878,538 $ (1,382 ) $ 1,528,919 $ (4,077,435 ) $ (1,473,243 ) Net cash used in investing activities $ (3,097,823 ) $ (521,865 ) $ - $ (2,487,565 ) $ 4,299,500 $ (1,807,753 ) Net cash provided by financing activities $ 3,838,200 $ - $ - $ - $ - $ 3,838,200 For the year ended December 31, 2023 Parent Subsidiaries WFOE VIE and its Subsidiaries Elimination Total Net cash (used in) provided by operating activities $ (193,778 ) $ (2,351,935 ) $ 17 $ 1,124,613 $ 1,475,312 $ 54,229 Net cash (used in) provided by investing activities $ (3,766,367 ) $ 1,530,264 $ - $ (43,240 ) $ (1,475,312 ) $ (3,754,655 ) Net cash provided by financing activities $ - $ - $ - $ - $ - $ - A. [Reserved] B.

The PRC operating entities have initiated their online operations in the recent 13 years and are developing its ability to provide its courses and education systems on a transactional basis over the Internet.

The PRC operating entities have initiated their online operations in the recent 13 years and are developing its ability to provide their courses and education systems on a transactional basis over the Internet.

We are a holding company no material operations of our own. All of our business is conducted through Zhongchao Shanghai, whose principle business is to provide healthcare information, education, and training services to healthcare professionals and the public in China. We do not plan to buy businesses or assets with a view to resale or profit from their resale.

We are a holding company with no material operations of our own. All of our business is conducted through Zhongchao Shanghai, whose principle business is to provide healthcare information, education, and training services to healthcare professionals and the public in China. We do not plan to buy businesses or assets with a view to resale or profit from their resale.

In particular, we cannot rule out the possibility that PRC regulatory authorities, courts or arbitral tribunals may in the future adopt a different or contrary interpretation or take a view that is inconsistent with the opinion of our PRC legal counsel.

Such developments could adversely affect the PRC operating entities’ businesses, lead to reduction in demand for our services and adversely affect the competitive position. Uncertainties regarding the enforcement of laws, and changes in policies, laws and regulations could materially and adversely affect us.

Such developments could adversely affect the PRC operating entities’ businesses, lead to reduction in demand for our services and adversely affect the PRC operating entities’ competitive position. Uncertainties regarding the enforcement of laws, and changes in policies, laws and regulations could materially and adversely affect us.

The PRC operating entities may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to continue to offer our Class A Ordinary Shares, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless.

According to the Trial Measures, among other requirements, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfil the filing procedures with the CSRC; if a domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties; (2) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; (3) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and such filings shall be submitted to the CSRC within three business days after the submission of the overseas offering and listing application; and (4) if the issuer issues securities in the same overseas market after the initial issuance and listing, it shall submit filings with the CSRC within three business days after the completion of the issuance.

Existing Issuers are not required to complete the filing procedures immediately but shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC.

The officials from the CSRC have also confirmed that for the PRC domestic companies that seek to list overseas with VIE structure, the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of companies with VIE structure which meet the compliance requirements.

However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control.

In addition, our management consists of five officers who are all located in China and three independent directors, among which two are located in the United States and one is located in China.

We may not be able to obtain these government approvals or complete such registrations on a timely basis, if at all, with respect to future capital contributions or foreign loans by us to our PRC subsidiaries.

In addition, changes in such PRC laws and regulations may materially and adversely affect our business. ● The shareholders of the VIE may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. 8 Risks Related to Doing Business in China Our WFOE and the PRC operating entities are based in China, and the PRC operating entities have all of their operations in China, and therefore, we face risks and uncertainties related to doing business in China in general, including, but not limited to, the following: ● The majority of the PRC operating entities’ business operations are conducted in China.

In addition, changes in such PRC laws and regulations may materially and adversely affect our business. ● The shareholders of the VIE may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. 8 Risks Related to Doing Business in China Zhongchao WFOE and the PRC operating entities are based in China, and the PRC operating entities have all of their operations in China, and therefore, we face risks and uncertainties related to doing business in China in general, including, but not limited to, the following: ● The majority of the PRC operating entities’ business operations are conducted in China.

Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to offer or continue to offer the Class A Ordinary Shares, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations, and cause the Ordinary Shares to significantly decline in value or become worthless.

If the PRC operating entities are subject to fines, our financial condition and results of operations may be adversely affected. The services agreements with certain dispatched workers will terminate upon the completion of the projects they are working on, and the PRC operating entities plan to enter to full-time employment agreements with all the staff in the future.

If the PRC operating entities are subject to fines, our financial condition and results of operations may be adversely affected. The services agreements with certain dispatched workers will terminate upon the completion of the projects they are working on, and the PRC operating entities plan to enter into full-time employment agreements with all the staff in the future.

To our knowledge, as the date hereof, all our current PRC resident beneficial owners who has more than 5% of our voting power, including our founder Weiguang Yang, have filed the foreign exchange registration in connection with their respective overseas shareholding in our company in accordance with the Circular 37.

To our knowledge, as the date hereof, all our current PRC resident beneficial owners who have more than 5% of our voting power, including our founder Weiguang Yang, have filed the foreign exchange registration in connection with their respective overseas shareholding in our company in accordance with the Circular 37.

See “Risk Factor — PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably .” on page 35 of this Annual Report. 9 ● Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities.

See “Risk Factor — PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably .” on page 36 of this Annual Report. 9 ● Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities.

New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business. 35 The PRC legal system is a civil law system based on written statutes.

New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business. The PRC legal system is a civil law system based on written statutes.

Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rules involves uncertainties. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.

Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rules involves uncertainties. 36 In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.

Where any entity or individual engages in online publishing services without approval, the competent departments shall ban such entity or individual according to their statutory functions and powers, and the competent departments shall order them to close their websites and delete all the relevant online publications, confiscate their illegal income and major equipment and tools used for engaging in the activities, and impose fines; (iv) certain medial and drug-related contents posted on the PRC operating entities’ website or mobile apps may be deemed as internet drug information service, and the PRC operating entities’ use of those contents may be required to obtain a Qualification Certificate for Internet Drug Information Services for provision of those contents.

Where any entity or individual engages in online publishing services without approval, the competent departments shall ban such entity or individual according to their statutory functions and powers, and the competent departments shall order them to close their websites and delete all the relevant online publications, confiscate their illegal income and major equipment and tools used for engaging in the activities, and impose fines; (iv) certain medical and drug-related contents posted on the PRC operating entities’ website or mobile apps may be deemed as internet drug information service, and the PRC operating entities’ use of those contents may be required to obtain a Qualification Certificate for Internet Drug Information Services for provision of those contents.

There remains uncertainty as to how the Review Measures and the Regulations on the Network Data Security Management will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Review Measures and the Regulations on the Network Data Security Management.

There remains uncertainty as to how the Cybersecurity Review Measures and the Regulations on the Network Data Security Management will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Regulations on the Network Data Security Management.

The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence on, such a registrant. 38 Furthermore, the HFCA Act, which requires that the PCAOB be permitted to inspect the issuer’s public accounting firm within three years, may result in the delisting of our Company in the future if the PCAOB is unable to inspect our accounting firm at such future time.

The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence on, such a registrant. 39 Furthermore, the HFCA Act, which requires that the PCAOB be permitted to inspect the issuer’s public accounting firm within three years, may result in the delisting of our Company in the future if the PCAOB is unable to inspect our accounting firm at such future time.

On February 17, 2023, the CSRC promulgated the Interim Administrative Measures on Overseas Securities Offering and Listing by Domestic Enterprises (CSRC Announcement [2022] No. 43) (“Trial Measures”), and five supporting guidelines, together with five supporting guidelines, which took effect on March 31, 2023.

On February 17, 2023, the CSRC promulgated the Interim Administrative Measures on Overseas Securities Offering and Listing by Domestic Enterprises (CSRC Announcement [2023] No. 43) (“Trial Measures”), and five supporting guidelines, together with five supporting guidelines, which took effect on March 31, 2023.

We and our non-PRC resident investors may be at risk of being required to file a return and being taxed under Circular 7, and we may be required to expend valuable resources to comply with the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 37, or to establish that we should not be taxed under Circular 7 and Bulletin 37. 49 In addition to the uncertainty in how the new resident enterprise classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect.

We and our non-PRC resident investors may be at risk of being required to file a return and being taxed under Circular 7, and we may be required to expend valuable resources to comply with the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 37, or to establish that we should not be taxed under Circular 7 and Bulletin 37. 50 In addition to the uncertainty in how the new resident enterprise classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect.

The conversion of Class B Ordinary Shares to Class A Ordinary Shares will have the effect, over time, of increasing the relative voting power of those holders of Class B Ordinary Shares who retain their shares in the long term. If, for example, Mr.

Any conversion of Class B Ordinary Shares to Class A Ordinary Shares will have the effect, over time, of increasing the relative voting power of those holders of Class B Ordinary Shares who retain their shares in the long term. If, for example, Mr.

PRC regulators, including the CAC, the Ministry of Industry and Information Technology, or MIIT, and the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection. The PRC regulatory requirements regarding cybersecurity are evolving.

PRC regulators, including the CAC, the Ministry of Industry and Information Technology, or MIIT, and the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection. 42 The PRC regulatory requirements regarding cybersecurity are evolving.

See “Risk Factor — PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiary, limit our PRC subsidiary ability to distribute profits to us, or otherwise materially and adversely affect us .” on page 46 of this Annual Report. ● The PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China.

See “Risk Factor — PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiary, limit our PRC subsidiary ability to distribute profits to us, or otherwise materially and adversely affect us .” on page 47 of this Annual Report. ● The PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China.

A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, develop non-infringing technology, or re-brand the PRC operating entities’ name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making, licensing or using products that have infringed a third party’s intellectual property rights.

A successful infringement claim against us, whether with or without merit, could, among other things, require us to pay substantial damages, develop non-infringing technology, or re-brand the PRC operating entities’ name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making, licensing or using products that have infringed a third party’s intellectual property rights.

See “Risk Factor — Governmental control of currency conversion may limit our ability to use our revenues effectively and the ability of our PRC subsidiaries to obtain financing .” on page 48 of this Annual Report. ● On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.

See “Risk Factor — Governmental control of currency conversion may limit our ability to use our revenues effectively and the ability of our PRC subsidiaries to obtain financing .” on page 49 of this Annual Report. ● On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.

Some of the applicable PRC operating entities have not obtained the above licenses or made such filings, and certain licenses that were obtained by the PRC operating entities have expired and have not been successfully renewed yet, and such PRC operating entities may be punished accordingly. 43 In addition, under current PRC laws and regulations, an information service provider that reposts news for internet publication shall first obtain license from Cyberspace Administration of China (“CAC”) or its local counterpart.

Some of the applicable PRC operating entities have not obtained the above licenses or made such filings, and certain licenses that were obtained by the PRC operating entities have expired and have not been successfully renewed yet, and such PRC operating entities may be punished accordingly. 44 In addition, under current PRC laws and regulations, an information service provider that reposts news for internet publication shall first obtain license from Cyberspace Administration of China (“CAC”) or its local counterpart.

See “Risk Factor — U.S. regulators’ ability to conduct investigations or enforce rules in China is limited. ” on page 44 of this Annual Report. 10 RISKS RELATED TO THE BUSINESS AND INDUSTRY OF THE PRC OPERATING ENTITIES The PRC operating entities may be unable to effectively manage their rapid growth, which could place significant strain on their management personnel, systems and resources.

See “Risk Factor — U.S. regulators’ ability to conduct investigations or enforce rules in China is limited. ” on page 45 of this Annual Report. 10 RISKS RELATED TO THE BUSINESS AND INDUSTRY OF THE PRC OPERATING ENTITIES The PRC operating entities may be unable to effectively manage their rapid growth, which could place significant strain on their management personnel, systems and resources.

If any of our PRC entities or the PRC operating entities or their ownership structure or the VIE Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or any of our PRC entities or the PRC operating entities fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including: ● revoking the business and operating licenses; ● discontinuing or restricting the operations; ● imposing conditions or requirements with which the PRC entities may not be able to comply; ● requiring us and the PRC operating entities to restructure the relevant ownership structure or operations; ● restricting or prohibiting our use of the proceeds from this offering to finance our business and operations in China; or ● imposing fines.

If any of our PRC entities or the PRC operating entities or their ownership structure or the VIE Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or any of our PRC entities or the PRC operating entities fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including: ● revoking the business and operating licenses; ● discontinuing or restricting the operations; ● imposing conditions or requirements with which the PRC entities may not be able to comply; ● requiring us and the PRC operating entities to restructure the relevant ownership structure or operations; ● restricting or prohibiting our use of the proceeds from our offerings to finance our business and operations in China; or ● imposing fines.

SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 46 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with the SAFE or its local branches.

SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 47 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with the SAFE or its local branches.

We cannot assure you that the registration process will not delay or prevent our conversion of Renminbi for use outside of China. 48 We may be classified as a “resident enterprise” for PRC enterprise income tax purposes; such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

We cannot assure you that the registration process will not delay or prevent our conversion of Renminbi for use outside of China. 49 We may be classified as a “resident enterprise” for PRC enterprise income tax purposes; such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

The PRC operating entities had been seeking business expansion countrywide, and, in consideration of cost, operation efficiency and business development need, established additional offices at shared workspace in 6 cities (Chongqing, Tianjin, Wuhan, Chengdu, Shijiazhuang and Baotou ) accommodating a total of 39 employees as of the date of this Annual Report.

For example, (i) certain business operated on the PRC operating entities’ websites and mobile apps, including providing platform for users to release, collect and process medial information, may be deemed as the internet information services, thus they may be required to obtain a License for Value-added Telecommunications Services for provision of such services.

For example, (i) certain business operated on the PRC operating entities’ websites and mobile apps, including providing platform for users to release, collect and process medical information, may be deemed as the internet information services, thus they may be required to obtain a License for Value-added Telecommunications Services for provision of such services.

As a result, recognition and enforcement in China of these judgments in relation to any matter, including U.S. securities laws and the laws of the Cayman Islands, may be difficult. 44 We face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of the operating company.

As a result, recognition and enforcement in China of these judgments in relation to any matter, including U.S. securities laws and the laws of the Cayman Islands, may be difficult. 45 We face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of the operating company.

Although the PRC operating entities try to use all commercially reasonable efforts to accurately estimate service orders and resource requirements from their customers, we may overestimate or underestimate, which may result in unexpected cost and strain or redundancy of their human capital and adversely effects on their utilization ability.

These developments could add uncertainties to our offering .” on page 38 of this Annual Report. ● The business of the PRC operating entities involves collecting and retaining certain internal and customer data. We also maintain information about various aspects of our operations as well as regarding our employees.

These developments could add uncertainties to our offering .” on page 39 of this Annual Report. ● The business of the PRC operating entities involves collecting and retaining certain internal and customer data. We also maintain information about various aspects of our operations as well as regarding our employees.

Pursuant to the Data Security Management Regulations Draft, data processor holding more than one million users/users’ individual information shall be subject to cybersecurity review before listing abroad. Data processing activities refers to activities such as the collection, retention, use, processing, transmission, provision, disclosure, or deletion of data.

Pursuant to the Data Security Management Regulations Draft, data processor holding more than one million users/users’ individual information shall be subject to cybersecurity review before listing abroad. Data processing activities refer to activities such as the collection, retention, use, processing, transmission, provision, disclosure, or deletion of data.

Risk Factors— Risks Related to Doing Business in China—We face risks associated with uncertainties surrounding the PRC laws and regulations governing the education industry in general, and the online for-profit private training in particular” “— We may be liable for improper use or appropriation of personal information provided by our customers” “— New rules for China-based companies seeking for securities offerings in foreign stock markets was released by the CSRC recently.

See “Risk Factor — We may be liable for improper use or appropriation of personal information provided by our customers .” on page 41 of this Annual Report. ● The majority of the operations of the PRC operating entities conducted outside of the U.S.

See “Risk Factor — We may be liable for improper use or appropriation of personal information provided by our customers .” on page 42 of this Annual Report. ● The majority of the operations of the PRC operating entities conducted outside of the U.S.

Risk Factors— Risks Related to Doing Business in China—PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of the initial public offering or any subsequent offerings to make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 4 Financial Information Related to the VIE The following tables present selected condensed consolidated statements of income and comprehensive income, and cash flows for the years ended December 31, 2024, 2023 and 2022, and the selected condensed consolidated balance sheets as of December 31, 2024 and 2023, which showing financial information for parent company, Zhongchao Cayman, its subsidiaries (Zhongchao Group Inc.

Risk Factors— Risks Related to Doing Business in China—PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of the initial public offering or any subsequent offerings to make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 4 Financial Information Related to the VIE The following tables present selected condensed consolidated statements of operations and comprehensive loss, and cash flows for the years ended December 31, 2025, 2024 and 2023, and the selected condensed consolidated balance sheets as of December 31, 2025 and 2024, which showing financial information for parent company, Zhongchao Cayman, its subsidiaries (Zhongchao Group Inc.

Further, the PRC government authorities may have wide discretion in the interpretation and enforcement of these laws. 40 On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the Data Security Law which took effect on September 1, 2021.

Further, the PRC government authorities may have wide discretion in the interpretation and enforcement of these laws. 41 On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the Data Security Law which took effect on September 1, 2021.

The PRC operating entities may be subject to risk related to potential infringement claims of the copyrights, as the copyrights of the PRC operating entities’ some medical education courses developed by us belong to their customers or share with their customers based on agreements.

The PRC operating entities may be subject to risk related to potential infringement claims of the copyrights, as the copyrights of some of the medical education courses of the PRC operating entities’ developed by them belong to their customers or share with their customers based on agreements.

Risks Related to the Business and Industry of the PRC Operating Entities Risks and uncertainties related to the business and industry of the PRC operating entities include, but are not limited to, the following: ● We depend on the healthcare industry for a significant portion of our revenues. ● We expect competition to increase significantly in the future which could reduce the PRC operating entities’ revenues, potential profits and overall market share. ● If the PRC operating entities are unable to collect their receivables from their customers, our results of operations and cash flows could be adversely affected. ● The PRC operating entities may not be able to prevent others from unauthorized use of the PRC operating entities’ intellectual property, which could cause a loss of customers, reduce the PRC operating entities’ revenues and harm their competitive position. ● The Internet is subject to many legal uncertainties and potential government regulations that may decrease demand for the PRC operating entities’ services, increase the PRC operating entities’ cost of doing business or otherwise have a material adverse effect on our financial results or prospects.

Risks Related to the Business and Industry of the PRC Operating Entities Risks and uncertainties related to the business and industry of the PRC operating entities include, but are not limited to, the following: ● We depend on the healthcare industry for a significant portion of our revenues. ● We expect competition to increase significantly in the future which could reduce the PRC operating entities’ revenues, potential profits and overall market share. ● We generate a significant portion of our revenues from a relatively small number of major customers and loss of business from these customers could reduce our revenues and significantly harm the PRC operating entities’ business. ● If the PRC operating entities are unable to collect their receivables from their customers, our results of operations and cash flows could be adversely affected. ● The PRC operating entities may not be able to prevent others from unauthorized use of the PRC operating entities’ intellectual property, which could cause a loss of customers, reduce the PRC operating entities’ revenues and harm their competitive position. ● The Internet is subject to many legal uncertainties and potential government regulations that may decrease demand for the PRC operating entities’ services, increase the PRC operating entities’ cost of doing business or otherwise have a material adverse effect on our financial results or prospects.

For the years ended December 31, 2024, 2023 and 2022, none of our subsidiaries, the consolidated VIE, or the subsidiaries of the VIE have made any dividends or distributions to Zhongchao Cayman. For the years ended December 31, 2024, 2023 and 2022, no dividends or distributions have been made to any U.S. investors.

For the years ended December 31, 2025, 2024 and 2023, none of our subsidiaries, the consolidated VIE, or the subsidiaries of the VIE have made any dividends or distributions to Zhongchao Cayman. For the years ended December 31, 2025, 2024 and 2023, no dividends or distributions have been made to any U.S. investors.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may be quick with little impair our ability to operate profitably.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may be quick with little advance notice and impair our ability to operate profitably.

If the PRC operating entities are subject to fines, our financial condition and results of operations may be adversely affected. 50 If the number of dispatched workers of the PRC operating entities exceeds statutory limit, the PRC operating entities may be subject to penalties.

If the PRC operating entities are subject to fines, our financial condition and results of operations may be adversely affected. 51 If the number of dispatched workers of the PRC operating entities exceeds statutory limit, the PRC operating entities may be subject to penalties.

Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiary’ ability to distribute dividends to us.

The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information. 42 As uncertainties remain regarding the interpretation and implementation of these laws and regulations, we cannot assure you that we will comply with such regulations in all respects and we may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities.

The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and impose export restrictions on certain data and information. 43 As uncertainties remain regarding the interpretation and implementation of these laws and regulations, we cannot assure you that we will comply with such regulations in all respects and we may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities.

Customers demand is varied and it may fall to zero or surge to a level that the PRC operating entities cannot cost-effectively satisfy.

Customer demand is varied and it may fall to zero or surge to a level that the PRC operating entities cannot cost-effectively satisfy.

In connection with audits of our financial statements for the fiscal years ended December 31, 2024and 2023, our management identified below material weaknesses in the design and operation of our internal controls: ● The Company lacked the key monitoring mechanisms such as an internal control department to oversee and monitor the Company’s risk management, business strategies and financial reporting procedure.

In connection with audits of our financial statements for the fiscal years ended December 31, 2025 and 2024, our management identified below material weaknesses in the design and operation of our internal controls: ● The Company lacked the key monitoring mechanisms such as an internal control department to oversee and monitor the Company’s risk management, business strategies and financial reporting procedure.

Because of the one-hundred-to-one voting ratio between our Class B and Class A Ordinary Shares, the holder of our Class B Ordinary Shares will continue to control a majority of the combined voting power of our ordinary share. This concentrated control will limit your ability to influence corporate matters for the foreseeable future.

Because of the one thousand-to-one voting ratio between our Class B and Class A Ordinary Shares, the holder of our Class B Ordinary Shares will continue to control a majority of the combined voting power of our ordinary shares. This concentrated control will limit your ability to influence corporate matters for the foreseeable future.

For example, to the extent that we need to convert U.S. dollar we receive from our initial public offering into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion.

For example, to the extent that we need to convert U.S. dollar we receive from our initial public offering or other offerings into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion.

Our listing on Nasdaq is conditioned on our continued compliance with Nasdaq’s continued listing requirements, including maintaining a minimum bid price of $1.00 per ordinary share, pursuant to Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Requirement. 27 On December 29, 2023, the Company received written notice from Nasdaq notifying the Company that it is not in compliance with the Minimum Bid Price Requirement, as the closing bid price for the Company’s Class A ordinary shares had been below $1.00 per share for the preceding 30 consecutive business days.

Our listing on Nasdaq is conditioned on our continued compliance with Nasdaq’s continued listing requirements, including maintaining a minimum bid price of $1.00 per ordinary share, pursuant to Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Requirement. 27 On November 28, 2025, the Company received written notice from Nasdaq notifying the Company that it is not in compliance with the Minimum Bid Price Requirement, as the closing bid price for the Company’s Class A ordinary shares had been below $1.00 per share for the preceding 30 consecutive business days.

If the PRC operating entities do not succeed in attracting new customers for their services or growing revenues from existing customers, they may not achieve our revenue growth goals. The PRC operating entities plan to significantly expand the number of customers they serve to diversify their client base and grow our revenues.

If the PRC operating entities do not succeed in attracting new customers for their services or growing revenues from existing customers, they may not achieve our revenue growth goals. The PRC operating entities plan to continue to increase the number of customers they serve to diversify their client base and grow our revenues.

As a result of the PRC operating entities’ significant recent growth, evaluating their business and prospects may be difficult and the PRC operating entities’ past results may not be indicative of its future performance. Our future success depends on the PRC operating entities’ ability to significantly increase revenue and maintain profitability from the PRC operating entities’ operations.

As a result of the PRC operating entities’ recent business evolvement and development, evaluating their business and prospects may be difficult and the PRC operating entities’ past results may not be indicative of its future performance. Our future success depends on the PRC operating entities’ ability to significantly increase revenue and maintain profitability from the PRC operating entities’ operations.

For the year ended December 31, 2022, Zhongchao Cayman made cash transfer of $1.5 million to Zhongchao USA. Except as otherwise disclosed above, for the years ended December 31, 2024, 2023 and 2022, no other cash transfer or transfer of other assets have occurred between Zhongchao Cayman, its subsidiaries, the consolidated VIE and the subsidiaries of the VIE.

For the year ended December 31, 2023, Zhongchao Cayman made cash transfer of $0.1 million to Zhongchao USA. Except as otherwise disclosed above, for the years ended December 31, 2025, 2024 and 2023, no other cash transfer or transfer of other assets have occurred between Zhongchao Cayman, its subsidiaries, the consolidated VIE and the subsidiaries of the VIE.

In 2023, 52.5% of our revenues were derived from services provided to pharmaceutical enterprises. Accordingly, our success is highly dependent on the sales and marketing expenditures of pharmaceutical enterprises and The PRC operating entities’ ability to attract these expenditures.

In 2024, 35.2% of our revenues were derived from services and products provided to pharmaceutical enterprises. In 2023, 52.5% of our revenues were derived from services and products provided to pharmaceutical enterprises. Accordingly, our success is highly dependent on the sales and marketing expenditures of pharmaceutical enterprises and The PRC operating entities’ ability to attract these expenditures.

However, as there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review, and if so, we may not be able to pass such review in relation to this offering.

For example, to the extent that we need to convert U.S. dollars we receive from our initial public offering into for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion.

For example, to the extent that we need to convert U.S. dollars we receive from our initial public offering or other offerings in the future into for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion.

Weiguang Yang, and his affiliates which he deemed to have control and/or have substantial influence is able to exercise full voting rights with respect to an aggregate of 549,772 Class B Ordinary Shares, representing a majority of the voting power of our outstanding ordinary shares. As a result, Mr.

Weiguang Yang, and his affiliates which he deemed to have control and/or have substantial influence is able to exercise full voting rights with respect to an aggregate of 68,750 Class A Ordinary Shares and 624,972 Class B Ordinary Shares, representing a majority of the voting power of our outstanding ordinary shares. As a result, Mr.

Any intellectual property claim or litigation in this area, whether they ultimately win or lose, could damage their reputation and have a material adverse effect on our business, results of operations or financial condition.

Any intellectual property claim or litigation in this area, whether the PRC operating entities ultimately win or lose, could damage their reputation and have a material adverse effect on our business, results of operations or financial condition.

The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future. 36 New rules for China-based companies seeking for securities offerings in foreign stock markets was released by the CSRC recently.

The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future. 37 New rules for China-based companies seeking for securities offerings in foreign stock markets were released by the CSRC.

Dividend Distributions or Transfers of Cash among the Holding Company, Its Subsidiaries, and the Consolidated VIE For the year ended December 31, 2024, Zhongchao Cayman made cash transfer of $4.4 million to Zhongchao USA. For the year ended December 31, 2023, Zhongchao Cayman made cash transfer of $0.1 million to Zhongchao USA.

Dividend Distributions or Transfers of Cash among the Holding Company, Its Subsidiaries, and the Consolidated VIE For the year ended December 31, 2025, Zhongchao Cayman made cash transfer of $ 3.4 million to Zhongchao USA. For the year ended December 31, 2024, Zhongchao Cayman made cash transfer of $4.4 million to Zhongchao USA.

As of the date of this Annual Report, Zhongchao Shanghai maintains 10 subsidiaries and 1 branch, of which are located in China (Beijing, Shanghai, Hainan and Chongqing) to serve different customers in various geographic locations. As of the date of this Annual Report, the PRC entities have 111 full-time employees and a few contractors from the third party.

As of the date of this Annual Report, Zhongchao Shanghai maintains 7 subsidiaries and 1 branch, of which are located in China (Beijing, Shanghai and Shijiazhuang) to serve different customers in various geographic locations. As of the date of this Annual Report, the PRC entities have 33 full-time employees and a few contractors from the third party.

We depend on the healthcare industry for a significant portion of our revenues. Our revenues could seriously decrease if there were adverse developments in the healthcare industry. Our near-term and long-term prospects depend upon selling the PRC operating entities’ services to the healthcare industry. In 2024, 35.2% of our revenues were derived from services provided to pharmaceutical enterprises.

We depend on the healthcare industry for a significant portion of our revenues. Our revenues could seriously decrease if there were adverse developments in the healthcare industry. Our near-term and long-term prospects depend upon selling the PRC operating entities’ services to the healthcare industry. In 2025, 32.5% of our revenues were derived from services and products provided to pharmaceutical enterprises.

Neither of them was included in the list of PCAOB Identified Firms in the PCAOB December Release. However, given that all PCAOB-registered firms in China were included on that list, our ability to retain an auditor subject to PCAOB inspection and investigation may depend on the relevant U.S. and PRC regulators reaching an agreement to permit these inspections and investigations.

However, given that all PCAOB-registered firms in China were included on that list, our ability to retain an auditor subject to PCAOB inspection and investigation may depend on the relevant U.S. and PRC regulators reaching an agreement to permit these inspections and investigations.

Additionally, the inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections. 39 The above recent developments may have added uncertainties to our ability to continue to list on Nasdaq or to offer our securities and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us since we are an emerging growth company and substantial all of our operations are conducting in China.

Additionally, the inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections. 40 The above recent developments may have added uncertainties to our ability to continue to list on Nasdaq or to offer our securities and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us since we are a non-accelerated filer and substantial all of our operations are conducting in China.

The State Administration of Taxation (“SAT”) has promulgated several rules and notices to tighten the scrutiny over acquisition transactions in recent years, including the Interim Measures for the Administration of Remittance of Income Tax for Non-Resident Enterprise Withheld at Source (the “Interim Measures”) which became effective on January 1, 2009, the Notice of the SAT on Strengthening the Administration of Enterprise Income Tax on Gain Derived from Equity Transfer Made by Non-Resident Enterprise (the “Notice”) which became effective on January 1, 2008 and was amended on July 19, 2015, the Announcement of the SAT on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source (the “SAT Circular 37”) which was promulgated on October 17, 2017, became effective on December 1, 2017 and was amended on June 15, 2018, and the Public Notice of the SAT Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-Resident Enterprises (the “Public Notice 7”) which became effective on February 3, 2015 and was amended on December 1, 2017 and December 29, 2017.

Distributions of earnings generated before January 1, 2008, are exempt from PRC withholding tax. 46 The State Administration of Taxation (“SAT”) has promulgated several rules and notices to tighten the scrutiny over acquisition transactions in recent years, including the Interim Measures for the Administration of Remittance of Income Tax for Non-Resident Enterprise Withheld at Source (the “Interim Measures”) which became effective on January 1, 2009, the Notice of the SAT on Strengthening the Administration of Enterprise Income Tax on Gain Derived from Equity Transfer Made by Non-Resident Enterprise (the “Notice”) which became effective on January 1, 2008 and was amended on July 19, 2015, the Announcement of the SAT on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source (the “SAT Circular 37”) which was promulgated on October 17, 2017, became effective on December 1, 2017 and was amended on June 15, 2018, and the Public Notice which became effective on February 3, 2015 and was amended on December 1, 2017 and December 29, 2017.

The dual class structure of our ordinary shares has the effect of concentrating voting control with our CEO, directors and their affiliates. Our Class B Ordinary Share has 100 votes per share, and our Class A Ordinary Share has 1 vote per share.

The dual class structure of our ordinary shares has the effect of concentrating voting control with our CEO, directors and their affiliates. A holder of a Class B Ordinary Share has the right to cast 1,000 votes per Class B Ordinary Share, and a holder of a Class A Ordinary Share has 1 vote per Class A Ordinary Share. Mr.

Because of our status as an emerging growth company, you will not be able to depend on any attestation from our independent registered public accountants as to our internal control over financial reporting for the foreseeable future.

Because of our status as a non-accelerated filer, you will not be able to depend on any attestation from our independent registered public accountants as to our internal control over financial reporting for the foreseeable future.

With respect to loans to the PRC subsidiaries by us, (i) if the relevant PRC subsidiaries adopt the traditional foreign exchange administration mechanism, or the Current Foreign Debt Mechanism, the outstanding amount of the loans shall not exceed the difference between the total investment and the registered capital of the PRC subsidiaries; and (ii) if the relevant PRC subsidiaries adopt the mechanism as provided in the PBOC Notice No. 9, or the Notice No. 9 Foreign Debt Mechanism, the outstanding amount of the loans shall not exceed 200% of the net asset of the relevant PRC subsidiary. 47 In addition, on October 23, 2019, the SAFE promulgated the Circular on Further Promoting the Facilitation of Cross-Border Trade and Investment, or SAFE Circular 28, pursuant to which, our PRC subsidiaries established in the pilot regions, which refers to the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan province, are not required to register each of their foreign debts with the SAFE or its local branches but to complete foreign debts registration with the SAFE or its local branches in the amount of 200% of the net asset of the relevant PRC subsidiary.

With respect to loans to the PRC subsidiaries by us, (i) if the relevant PRC subsidiaries adopt the traditional foreign exchange administration mechanism, or the Current Foreign Debt Mechanism, the outstanding amount of the loans shall not exceed the difference between the total investment and the registered capital of the PRC subsidiaries; and (ii) if the relevant PRC subsidiaries adopt the mechanism as provided in the PBOC Notice No. 9, or the Notice No. 9 Foreign Debt Mechanism, and apply the latest macro-prudential adjustment parameter adopted by the People’s Bank of China and SAFE on January 13, 2025, the outstanding amount of the loans shall not exceed 350% (which may be adjusted due to the change of PRC’s national macro-control policy) of the net asset of the relevant PRC subsidiary. 48 In addition, on October 23, 2019, the SAFE promulgated the Circular on Further Promoting the Facilitation of Cross-Border Trade and Investment, or SAFE Circular 28, pursuant to which, our PRC subsidiaries established in the pilot regions, which refers to the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan province, are not required to register each of their foreign debts with the SAFE or its local branches but to complete foreign debts registration with the SAFE or its local branches in the amount of 200% of the net asset of the relevant PRC subsidiary.

On November 7, 2016, the SCNPC issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017. Pursuant to the Cyber Security Law, network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services.

On October 28, 2025, the SCNPC issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on January 1, 2026. Pursuant to the Cyber Security Law, network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services.

The PRC operating entities’ business has grown and evolved significantly in recent years. The PRC operating entities’ growth in recent years makes it difficult to evaluate their historical performance and make a period-to-period comparison of the PRC operating entities’ historical operating results less meaningful.

The PRC operating entities’ business has evolved in recent years in response to changing market conditions and adjustment of business strategies. The PRC operating entities’ development in recent years makes it difficult to evaluate their historical performance and make a period-to-period comparison of the PRC operating entities’ historical operating results less meaningful.

Any transfer of funds by us to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to PRC regulations. Capital contributions to our PRC subsidiaries are subject to the approval of or filing with the MOFCOM in its local branches and registration with a local bank authorized by the SAFE.

Any transfer of funds by us to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to PRC regulations. Capital contributions to our PRC subsidiaries are subject to completion of registration with the market regulator and foreign exchange registration at an authorized bank by the SAFE.

For the year ended December 31, 2024, two customers accounted for approximately 15.4% and 13.8% of the total revenue. For the year ended December 31, 2023, one customer accounted for approximately 13.7% of the total revenue. For the year ended December 31, 2022, one customer accounted for approximately 15.9% of the total revenue.

For the year ended December 31, 2025, four customers accounted for approximately 17.3%, 17.2%, 15.3% and 11.1% of the total revenue. For the year ended December 31, 2024, two customers accounted for approximately 15.4% and 13.8% of the total revenue. For the year ended December 31, 2023, one customer accounted for approximately 13.7% of the total revenue.

For the fiscal years ended December 31, 2024, 2023 and 2022, our revenues were $15,864,773, $19,433,945 and $14,151,516, respectively, and our net loss were $(273,413), $(11,307,239) and $(2,822,319), respectively.

For the fiscal years ended December 31, 2025, 2024 and 2023, our revenues were $11,374,996, $15,864,773 and $19,433,945, respectively, and our net loss were $(5,814,867), $(273,413) and $(11,307,239), respectively.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

103 edited+47 added−14 removed354 unchanged

2024 filing

2025 filing

Biggest changeCurrent Owner Mark Registration Number Status Class/Description Expiration Date Country of Registration 9 Shanghai Zhongxun Medical Technology Co., Ltd. 47299361 Approved Category 44: Hospitals; Healthcare; Dispensing Consulting; Telemedicine services; Health consulting; Therapeutic services; Diet nutrition guidance; Providing medication information for patient; Medical information; Medical counseling (cut-off) 2031.02.20 China 10 Shanghai Zhongxin Medical Technology Co., Ltd 59477566 Approved Category 44: Medical clinic services; Medical assistance; Therapeutic services; Medical equipment rental; Health consulting; Diet nutrition guidance; Art therapy measures; Dispensing; Beauty services; Massage (cut-off) 2032.03.13 China 11 Chongqing Xinjiang Pharmaceutical Co., Ltd. 65011381 Approved Category 5: Medical drugs; human drugs; Chinese patent medicines; medical nutrition products; dietary fiber; mineral dietary supplements; Medical ; Veterinary medications; Dental fillings; Tablets (cut-off) 2032.11,23 China 12 Chongqing Xinjiang Pharmaceutical Co., Ltd. 64995408 Approved Category 42: Implementation of early evaluation in the field of new drugs; Drug evaluation; Pharmaceutical research; Computer software maintenance for Internet use; Medical planning computer programming; Computer software design; Computer hardware design and development consulting; Computer system analysis; Provision of Internet search engines; Cloud calculate(cut-off) 2032.11.13 China 13 Chongqing Xinjiang Pharmaceutical Co., Ltd. 64988009 Category 35: Displaying merchandise on communication media for retail purposes; Advertising; Commercial information offered through website; Franchising business management; Import and export agency; Promoting for others; Systemizing computer database information; Seeking sponsorship; Retail sale of pharmaceutical, veterinary, hygienic preparations and medical supplies (cut-off) 2033.01.20 China 70 As of the date of this Annual Report, the PRC operating entities owns 37 copyrights that have been approved.

Biggest changeCurrent Owner Mark Registration Number Status Class/Description Expiration Date Country of Registration 8 Beijing Zhongchao Boya Medical Technology Co., Ltd. 59474281 Approved Category 44: Medical clinic services; Healthcare; Therapeutic services; Medical equipment rental; Health counseling; Diet nutrition guidance; Art therapy methods; Dispensing; Beauty services; Massage (cut-off) 2032.03.13 China 9 Shanghai Zhongxun Medical Technology Co., Ltd. 47299361 Approved Category 44: Hospitals; Healthcare; Dispensing Consulting; Telemedicine services; Health consulting; Therapeutic services; Diet nutrition guidance; Providing medication information for patient; Medical information; Medical counseling (cut-off) 2031.02.20 China 10 Shanghai Zhongxin Medical Technology Co., Ltd 59477566 Approved Category 44: Medical clinic services; Medical assistance; Therapeutic services; Medical equipment rental; Health consulting; Diet nutrition guidance; Art therapy measures; Dispensing; Beauty services; Massage (cut-off) 2032.03.13 China As of the date of this Annual Report, the PRC operating entities owns 37 copyrights that have been approved.

The PRC operating entities utilize the system of a leading enterprise cloud service provider, Alibaba Cloud, in China so that the PRC operating entities enjoy the instant scalability and robustness of cloud-based services. 65 Recent Development Share Consolidation On February 20, 2024, the Company held an extraordinary general meeting of shareholders at which shareholders resolved that: (a) with effect upon the commencement of the second business day following the extraordinary general meeting or such later date as the Company’s board of directors may determine, that the authorized, issued, and outstanding shares of the Company be consolidated and divided by consolidating: (i) every ten (10) Class A Ordinary Shares with a par value of US$0.0001 each into one (1) Class A Ordinary Share with a par value of US$0.001 each; and (ii) every ten (10) Class B Ordinary Shares with a par value of US$0.0001 each into one (1) Class B Ordinary Share with a par value of US$0.001 each, with such consolidated shares having the same rights and being subject to the same restrictions (save as to par value) as the previously existing shares of such class (the “Share Consolidation”); (b) subject to and immediately following the Share Consolidation being effected, the authorized share capital of the Company be increased from US$50,000 divided into 45,000,000 Class A Ordinary Shares with a par value of US$0.001 each and 5,000,000 Class B Ordinary Shares with a par value of US$0.001 each to US$500,000 divided into 450,000,000 Class A Ordinary Shares with a par value of US$0.001 each and 50,000,000 Class B Ordinary Shares with a par value of US$0.001 each (the “Share Capital Increase”); and (c) subject to the Share Consolidation and the Share Capital Increase being approved and effected, the Company adopt an amended and restated memorandum and articles of association in substitution for, and to the exclusion of, the Company’s existing memorandum and articles of association, to reflect corrected typographical corrections, the Share Consolidation and the Share Capital Increase.

The PRC operating entities utilize the system of a leading enterprise cloud service provider, Alibaba Cloud, in China so that the PRC operating entities enjoy the instant scalability and robustness of cloud-based services. 66 Recent Development Share Consolidation On February 20, 2024, the Company held an extraordinary general meeting of shareholders at which shareholders resolved that: (a) with effect upon the commencement of the second business day following the extraordinary general meeting or such later date as the Company’s board of directors may determine, that the authorized, issued, and outstanding shares of the Company be consolidated and divided by consolidating: (i) every ten (10) Class A Ordinary Shares with a par value of US$0.0001 each into one (1) Class A Ordinary Share with a par value of US$0.001 each; and (ii) every ten (10) Class B Ordinary Shares with a par value of US$0.0001 each into one (1) Class B Ordinary Share with a par value of US$0.001 each, with such consolidated shares having the same rights and being subject to the same restrictions (save as to par value) as the previously existing shares of such class (the “Share Consolidation”); (b) subject to and immediately following the Share Consolidation being effected, the authorized share capital of the Company be increased from US$50,000 divided into 45,000,000 Class A Ordinary Shares with a par value of US$0.001 each and 5,000,000 Class B Ordinary Shares with a par value of US$0.001 each to US$500,000 divided into 450,000,000 Class A Ordinary Shares with a par value of US$0.001 each and 50,000,000 Class B Ordinary Shares with a par value of US$0.001 each (the “Share Capital Increase”); and (c) subject to the Share Consolidation and the Share Capital Increase being approved and effected, the Company adopt an amended and restated memorandum and articles of association in substitution for, and to the exclusion of, the Company’s existing memorandum and articles of association, to reflect corrected typographical corrections, the Share Consolidation and the Share Capital Increase.

In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that a foreign investor may freely transfer into or out of China, in Renminbi or a foreign currency, its contributions, profits, capital gains, income from disposition of assets, royalties of intellectual property rights, indemnity or compensation lawfully acquired, and income from liquidation, among others, within China; local governments shall abide by their commitments to the foreign investors; governments at all levels and their departments shall enact local normative documents concerning foreign investment in compliance with laws and regulations and shall not impair legitimate rights and interests, impose additional obligations onto FIEs, set market access restrictions and exit conditions, or intervene with the normal production and operation activities of FIEs; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; and mandatory technology transfer is prohibited. 94 C.

In addition, in accordance with Regulations on Supervision and Administration of Medical Devices, promulgated by the State Council on February 9, 2021 and effective as of June 1, 2021, was amended on December 6, 2024 and took effect on January 1, 2025, Class II and Class III medical devices shall be registered with the NMPA or its local branches, while Class I medical devices shall be filed with the competent local MPA.

In addition, in accordance with Regulations on Supervision and Administration of Medical Devices, promulgated by the State Council on February 9, 2021 and effective as of June 1, 2021, was amended on December 6, 2024 and took effect on January 20, 2025, Class II and Class III medical devices shall be registered with the NMPA or its local branches, while Class I medical devices shall be filed with the competent local MPA.

Any violation of the above decision or order may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, closedown of websites or even criminal liabilities. 82 Pursuant to the Ninth Amendment to the Criminal Law issued by the SCNPC in August 2015, which became effective in November 2015, any person or entity that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders is subject to criminal penalty for the result of (i) any dissemination of illegal information in large scale; (ii) any severe effect due to the leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other severe situation, and any individual or entity that (i) sells or provides personal information to others in a way violating the applicable law, or (ii) steals or illegally obtain any personal information is subject to criminal penalty in severe situation.

Any violation of the above decision or order may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, closedown of websites or even criminal liabilities. 83 Pursuant to the Ninth Amendment to the Criminal Law issued by the SCNPC in August 2015, which became effective in November 2015, any person or entity that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders is subject to criminal penalty for the result of (i) any dissemination of illegal information in large scale; (ii) any severe effect due to the leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other severe situation, and any individual or entity that (i) sells or provides personal information to others in a way violating the applicable law, or (ii) steals or illegally obtain any personal information is subject to criminal penalty in severe situation.

All public medical institutions shall participate in the centralized volume-based drug procurement. 76 Regulations Relating To Online Drug Information Services According to the Measures Regarding the Administration of Drug Information Service over the Internet, promulgated by the CFDA on July 8, 2004 and amended on November 17, 2017, the Internet drug information service refers to the activities of providing medical information (including medical devices) and other services to Internet users through the Internet, and where any website intends to provide Internet drug information services, it shall, prior to applying for an operation permit or record-filing from the State Council’s department in charge of information industry or the telecom administrative authority at the provincial level, file an application with the provincial FDA, and shall be subject to the examination and approval thereof for obtaining the qualifications for providing Internet drug information services.

All public medical institutions shall participate in the centralized volume-based drug procurement. 77 Regulations Relating To Online Drug Information Services According to the Measures Regarding the Administration of Drug Information Service over the Internet, promulgated by the CFDA on July 8, 2004 and amended on November 17, 2017, the Internet drug information service refers to the activities of providing medical information (including medical devices) and other services to Internet users through the Internet, and where any website intends to provide Internet drug information services, it shall, prior to applying for an operation permit or record-filing from the State Council’s department in charge of information industry or the telecom administrative authority at the provincial level, file an application with the provincial FDA, and shall be subject to the examination and approval thereof for obtaining the qualifications for providing Internet drug information services.

However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of “internet audio-visual programs.” 72 On March 16, 2018, the SAPPRFT promulgated the Notice on Further Regulating the Transmission Order of Internet Audio-Visual Program Services, providing that the classic literary works, radio, film and television programs, internet original audio-visual programs shall not be re-edited, re-dubbed, re-subtitled or partly captured and consolidated as a new program without authorizations and providers of internet audio-visual program services shall strictly manage and supervise such re-edited programs uploaded by the internet users and shall not provide any transmission channel for those internet audio-visual programs which have political orientation issues, copyright issues or content issues.

However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of “internet audio-visual programs.” 73 On March 16, 2018, the SAPPRFT promulgated the Notice on Further Regulating the Transmission Order of Internet Audio-Visual Program Services, providing that the classic literary works, radio, film and television programs, internet original audio-visual programs shall not be re-edited, re-dubbed, re-subtitled or partly captured and consolidated as a new program without authorizations and providers of internet audio-visual program services shall strictly manage and supervise such re-edited programs uploaded by the internet users and shall not provide any transmission channel for those internet audio-visual programs which have political orientation issues, copyright issues or content issues.

In addition, the National Medical Insurance Plan in the 14th Five-year Plan, issued by the General Office of the State Council on September 23, 2021, intends to take a series of measures to achieve the high-quality development of the basic medical insurance system, insecure people’s health and promote common wealth, including encouraging the innovation of insurance products, adjusting and optimizing the medical insurance catalog on a dynamic basis, and improve direct settlement services for medical treatment in different places. 81 Regulations Related to Internet Information Security and Privacy Protection PRC government authorities have enacted laws and regulations with respect to internet information security and protection of personal information from any abuse or unauthorized disclosure.

In addition, the National Medical Insurance Plan in the 14th Five-year Plan, issued by the General Office of the State Council on September 23, 2021, intends to take a series of measures to achieve the high-quality development of the basic medical insurance system, insecure people’s health and promote common wealth, including encouraging the innovation of insurance products, adjusting and optimizing the medical insurance catalog on a dynamic basis, and improve direct settlement services for medical treatment in different places. 82 Regulations Related to Internet Information Security and Privacy Protection PRC government authorities have enacted laws and regulations with respect to internet information security and protection of personal information from any abuse or unauthorized disclosure.

Also, the PRC operating entities work with healthcare professionals to develop the PRC operating entities’ programs. When starting to create any programs, the PRC operating entities make face to face or telephone surveys and get the learning needs from healthcare professionals, such as medical knowledge, clinical skills, case sharing, and the desire to communicate with peers.

Also, the PRC operating entities work with healthcare professionals to develop the PRC operating entities’ programs. When starting to create programs, the PRC operating entities make face to face or telephone surveys and get the learning needs from healthcare professionals, such as medical knowledge, clinical skills, case sharing, and the desire to communicate with peers.

Additionally, the Basic Standards for Internet Hospitals (Trial) as attached to the Measures for the Administration of Internet Hospitals (Trial) sets forth specific requirements for diagnosis and treatment items, departments, personnel, buildings and device and equipment, and rules and regulations of Internet hospitals. 78 On February 3, 2019, The Health Commission of Guangdong and the Bureau of Traditional Chinese Medicine of Guangdong issued a notice on the forwarding of three documents including The Construction Standards of Internet Hospitals (Trial), which states that articles 8 and 9 of the Measures for the Administration of Internet Diagnosis and Treatment (Trial) shall apply when a physical medical institution newly applied for establishment or a physical medical institution that has obtained the Practicing License for Medical Institutions applies for the establishment of an internet hospital.

Additionally, the Basic Standards for Internet Hospitals (Trial) as attached to the Measures for the Administration of Internet Hospitals (Trial) sets forth specific requirements for diagnosis and treatment items, departments, personnel, buildings and device and equipment, and rules and regulations of Internet hospitals. 79 On February 3, 2019, The Health Commission of Guangdong and the Bureau of Traditional Chinese Medicine of Guangdong issued a notice on the forwarding of three documents including The Construction Standards of Internet Hospitals (Trial), which states that articles 8 and 9 of the Measures for the Administration of Internet Diagnosis and Treatment (Trial) shall apply when a physical medical institution newly applied for establishment or a physical medical institution that has obtained the Practicing License for Medical Institutions applies for the establishment of an internet hospital.

On April 1, 2019, the General Office of the State Council of the PRC issued the Comprehensive Program on Reduction of Social Insurance Premiums, which generally reduced the social insurance contribution burden of enterprises, and re-emphasized that local authorities shall not conduct centralized collection of enterprises historical social insurance arrears before a uniform policy is published. 88 According to the Regulations on the Administration of Housing Provident Fund, which was promulgated by the State Counsel and became effective on April 3, 1999, and was amended on March 24, 2002 and March 24, 2019, housing provident fund contributions by an individual employee and housing provident fund contributions by his or her employer shall belong to the individual employee.

On April 1, 2019, the General Office of the State Council of the PRC issued the Comprehensive Program on Reduction of Social Insurance Premiums, which generally reduced the social insurance contribution burden of enterprises, and re-emphasized that local authorities shall not conduct centralized collection of enterprises historical social insurance arrears before a uniform policy is published. 90 According to the Regulations on the Administration of Housing Provident Fund, which was promulgated by the State Counsel and became effective on April 3, 1999, and was amended on March 24, 2002 and March 24, 2019, housing provident fund contributions by an individual employee and housing provident fund contributions by his or her employer shall belong to the individual employee.

In addition, an information processor shall take technical measures and other necessary measures to ensure the security of the personal information that is collected and stored and to prevent the information from being divulged, tampered with or lost; where personal information has been or may be divulged, tampered with or lost, the information processor shall take remedial measures in a timely manner, inform the natural person concerned in accordance with the provisions and report the case to the relevant competent department. 83 On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect on November 1, 2021.

In addition, an information processor shall take technical measures and other necessary measures to ensure the security of the personal information that is collected and stored and to prevent the information from being divulged, tampered with or lost; where personal information has been or may be divulged, tampered with or lost, the information processor shall take remedial measures in a timely manner, inform the natural person concerned in accordance with the provisions and report the case to the relevant competent department. 85 On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect on November 1, 2021.

A medical practitioner who practices for multiple institutions at the same place of practice shall determine one institution as the main practicing institution where he or she practices, and apply for registration to the administrative department of health and family planning approving the practice of such institution; and, for other institutions where the medical practitioner is to practice, respectively apply for recordation to the administrative health and family planning authority. 80 Protection of Patients’ Information Internet hospitals shall strictly comply with the relevant laws and regulations in the PRC on information security and confidentiality of medical data, and appropriately keep patients’ information, and shall not illegally trade or disclose patients’ information.

A medical practitioner who practices for multiple institutions at the same place of practice shall determine one institution as the main practicing institution where he or she practices, and apply for registration to the administrative department of health and family planning approving the practice of such institution; and, for other institutions where the medical practitioner is to practice, respectively apply for recordation to the administrative health and family planning authority. 81 Protection of Patients’ Information Internet hospitals shall strictly comply with the relevant laws and regulations in the PRC on information security and confidentiality of medical data, and appropriately keep patients’ information, and shall not illegally trade or disclose patients’ information.

If the domain name holder fails to pay the corresponding fees as required, the original domain name registrar shall write it off and notify the holder of the domain name in written form. 87 Regulations on Labor Protection in the PRC According to the Labor Law of the PRC, or the Labor Law, which was promulgated by the Standing Committee of the NPC on July 5, 1994, came into effect on January 1, 1995, and was most recently amended on December 29, 2018, an employer shall develop and improve its rules and regulations to safeguard the rights of its workers.

If the domain name holder fails to pay the corresponding fees as required, the original domain name registrar shall write it off and notify the holder of the domain name in written form. 89 Regulations on Labor Protection in the PRC According to the Labor Law of the PRC, or the Labor Law, which was promulgated by the Standing Committee of the NPC on July 5, 1994, came into effect on January 1, 1995, and was most recently amended on December 29, 2018, an employer shall develop and improve its rules and regulations to safeguard the rights of its workers.

The PRC operating entities generate the revenue on a case-by-case or project-by-project basis and by providing their customers with healthcare information, education, and training services, including the production of online medical training materials, the arrangement of onsite training programs or academic conferences, and the development of medical education software to their targeted end users. 63 Sunshine Health Forums’ Users Unlike MDMOOC online platform which require the users to register with their healthcare qualification and some of the PRC operating entities’ programs are limited to certain registered users of the platform, the Sunshine Health Forums is accessible to the public without limitation.

The PRC operating entities generate the revenue on a case-by-case or project-by-project basis and by providing their customers with healthcare information, education, and training services, including the production of online medical training materials, the arrangement of onsite training programs or academic conferences, and the development of medical education software to their targeted end users. 64 Sunshine Health Forums’ Users Unlike MDMOOC online platform which require the users to register with their healthcare qualification and some of the PRC operating entities’ programs are limited to certain registered users of the platform, the Sunshine Health Forums is accessible to the public without limitation.

Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 71 Government Regulation Regulation Related to Online Services Regulation Related to Online Transmission of Audio-Visual Programs The Measures for the Administration of Publication of Audio-Visual Programs through Internet or Other Information Network, or the Audio-Visual Measures, promulgated by the SARFT, on July 6, 2004 and put into effect on October 11, 2004, and ceased to be effect apply to the activities relating to the opening, broadcasting, integration, transmission or download of audio-visual programs using internet or other information network.

Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 72 Government Regulation Regulation Related to Online Services Regulation Related to Online Transmission of Audio-Visual Programs The Measures for the Administration of Publication of Audio-Visual Programs through Internet or Other Information Network, or the Audio-Visual Measures, promulgated by the SARFT, on July 6, 2004 and put into effect on October 11, 2004, and ceased to be effect apply to the activities relating to the opening, broadcasting, integration, transmission or download of audio-visual programs using internet or other information network.

The qualified medical inspection institutions and medical service institutions shall be encouraged to collaborate with internet enterprises to develop gene testing, disease prevention and other health service modes. 77 In April 2018, the Opinions on Promoting the Development of “Internet Plus Health Care” issued by the General Office of the State Council encouraged medical institutions to apply the internet and other information technologies to expand the space and content of medical services, developed an online and offline integrated medical service model that covers the whole process of medical service.

The qualified medical inspection institutions and medical service institutions shall be encouraged to collaborate with internet enterprises to develop gene testing, disease prevention and other health service modes. 78 In April 2018, the Opinions on Promoting the Development of “Internet Plus Health Care” issued by the General Office of the State Council encouraged medical institutions to apply the internet and other information technologies to expand the space and content of medical services, developed an online and offline integrated medical service model that covers the whole process of medical service.

In addition, Public Notice 7 provides clear criteria on how to assess reasonable commercial purposes. 89 Value-Added Tax According to the Temporary Regulations on Value-added Tax, which was most recently amended on November 19, 2017, and the Detailed Implementing Rules of the Temporary Regulations on Value-added Tax, which was amended on October 28, 2011, and became effective on November 1, 2011, all taxpayers selling goods, providing processing, repair or replacement services or importing goods within the PRC shall pay Value-Added Tax.

In addition, Public Notice 7 provides clear criteria on how to assess reasonable commercial purposes. 91 Value-Added Tax According to the Temporary Regulations on Value-added Tax, which was most recently amended on November 19, 2017, and the Detailed Implementing Rules of the Temporary Regulations on Value-added Tax, which was amended on October 28, 2011, and became effective on November 1, 2011, all taxpayers selling goods, providing processing, repair or replacement services or importing goods within the PRC shall pay Value-Added Tax.

Additionally, the New Opinion requests that competent local authorities formulate relevant local standards for extracurricular training institutions within their administrative area. 85 Regulation Related to Online and Distance Education Pursuant to the Interim Administrative Regulations on Educational Websites and Online and Distance Education Schools issued by the MOE, on July 5, 2000, educational websites may provide educational services in relation to higher education, elementary education, pre-school education, teaching education, occupational education, adult education, other education and public educational information services.

Additionally, the New Opinion requests that competent local authorities formulate relevant local standards for extracurricular training institutions within their administrative area. 87 Regulation Related to Online and Distance Education Pursuant to the Interim Administrative Regulations on Educational Websites and Online and Distance Education Schools issued by the MOE, on July 5, 2000, educational websites may provide educational services in relation to higher education, elementary education, pre-school education, teaching education, occupational education, adult education, other education and public educational information services.

Foreign-invested enterprises would need to submit relevant foreign investment materials to MIIT for the establishment or change of telecommunication operating permits. 74 Restrictions on Foreign Direct Investment in Value-Added Telecommunications Services Foreign direct investment in telecommunications companies in China is governed by the Provisions on the Administration of Foreign-Invested Telecommunications Enterprises (2016 Revision), which was promulgated on December 11, 2001 and amended on September 10, 2008 and February 6, 2016 by the State Council.

Foreign-invested enterprises would need to submit relevant foreign investment materials to MIIT for the establishment or change of telecommunication operating permits. 75 Restrictions on Foreign Direct Investment in Value-Added Telecommunications Services Foreign direct investment in telecommunications companies in China is governed by the Provisions on the Administration of Foreign-Invested Telecommunications Enterprises (2016 Revision), which was promulgated on December 11, 2001 and amended on September 10, 2008 and February 6, 2016 by the State Council.

The pharmaceutical wholesale enterprises distributing prescription drugs and/or OTC drugs, as well as pharmaceutical retail enterprises selling prescription drugs and/or Class-A OTC drugs are required to obtain the Pharmaceutical Operation License. 75 According to the Administrative Measures for the Supervision and Administration of Circulation of Pharmaceuticals, promulgated by the CFDA in January 2007 and effective in May 2007, pharmaceutical manufacture and operation enterprises and medical institutions shall be responsible for the quality of pharmaceuticals they manufacture, provide or use.

The pharmaceutical wholesale enterprises distributing prescription drugs and/or OTC drugs, as well as pharmaceutical retail enterprises selling prescription drugs and/or Class-A OTC drugs are required to obtain the Pharmaceutical Operation License. 76 According to the Administrative Measures for the Supervision and Administration of Circulation of Pharmaceuticals, promulgated by the CFDA in January 2007 and effective in May 2007, pharmaceutical manufacture and operation enterprises and medical institutions shall be responsible for the quality of pharmaceuticals they manufacture, provide or use.

At the bottom are the latest medical articles written or recommended by the PRC operating entities’ medical editors, and the users are able to add bookmarks categorized by different types of cancers to the main page for easy access to relevant articles in the future. 60 The screenshot below shows the main page of Zhongxin Health mini program: Medication management page primarily provides information of medication information and the PRC operating entities’ patient management projects.

At the bottom are the latest medical articles written or recommended by the PRC operating entities’ medical editors, and the users are able to add bookmarks categorized by different types of cancers to the main page for easy access to relevant articles in the future. 61 The screenshot below shows the main page of Zhongxin Health mini program: Medication management page primarily provides information of medication information and the PRC operating entities’ patient management projects.

The infringer shall, according to the circumstances of the case, undertake to cease the infringement, take remedial action, and offer an apology, pay damages, etc. 86 The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the National Copyright Administration on February 20, 2002, amended on July 1, 2004, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.

The infringer shall, according to the circumstances of the case, undertake to cease the infringement, take remedial action, and offer an apology, pay damages, etc. 88 The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the National Copyright Administration on February 20, 2002, amended on July 1, 2004, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.

Ltd 21587230 Approved Category 44: health care; medical assistance; rental of medical equipment; treatment services; health counseling; dietary and nutritional guidance; dispensing; art therapy; massage; beauty services (deadline) 2027.11.27 China 68 No. Current Owner Mark Registration Number Status Class/Description Expiration Date Country of Registration 5 Zhongchao Medical Technology (Shanghai) Corp.

Ltd 21587230 Approved Category 44: health care; medical assistance; rental of medical equipment; treatment services; health counseling; dietary and nutritional guidance; dispensing; art therapy; massage; beauty services (deadline) 2027.11.27 China 70 No. Current Owner Mark Registration Number Status Class/Description Expiration Date Country of Registration 5 Zhongchao Medical Technology (Shanghai) Corp.

We have no substantive operations other than holding all of the issued and outstanding shares of Zhongchao Group Inc., or Zhongchao BVI, established under the laws of the British Virgin Islands on April 23, 2019. 51 Zhongchao BVI is also a holding company holding all of the outstanding equity of Zhongchao Group Limited, or Zhongchao HK, which was established in Hong Kong on May 14, 2019.

We have no substantive operations other than holding all of the issued and outstanding shares of Zhongchao Group Inc., or Zhongchao BVI, established under the laws of the British Virgin Islands on April 23, 2019. 52 Zhongchao BVI is also a holding company holding all of the outstanding equity of Zhongchao Group Limited, or Zhongchao HK, which was established in Hong Kong on May 14, 2019.

The total number of patients covered under these patient-aid projects has reached nearly 159,981 by the end of 2024. Sunshine Health Forums-Healthcare Information and Education for the Public The PRC operating entities’ goal is not only provide continuing education and training to healthcare professionals but to promote healthy lifestyle and provide healthcare knowledge to the public.

The total number of patients covered under these patient-aid projects has reached nearly 159,981 by the end of 2025. Sunshine Health Forums-Healthcare Information and Education for the Public The PRC operating entities’ goal is not only provide continuing education and training to healthcare professionals but to promote healthy lifestyle and provide healthcare knowledge to the public.

The PRC operating entities’ experienced and large pool of in-house editors incubate original ideas and present them in video format and collaborate closely with medical professionals in the content creation process. 58 ● Featured Articles -- The PRC operating entities’ in-house content team and resources of well-known healthcare professionals bring the PRC operating entities’ assessment and analysis of the latest medical theories and information to the PRC operating entities’ users through featured articles.

The PRC operating entities’ experienced and large pool of in-house editors incubate original ideas and present them in video format and collaborate closely with medical professionals in the content creation process. 59 ● Featured Articles -- The PRC operating entities’ in-house content team and resources of well-known healthcare professionals bring the PRC operating entities’ assessment and analysis of the latest medical theories and information to the PRC operating entities’ users through featured articles.

Users could check the projects status they applied for by providing their names and identification numbers to track their application status, prescription amount, delivery status and other relevant matters. 61 The screenshot below shows the main page of Zhongxin Health mini program: 62 The users could sign up and log in on the account page.

Users could check the projects status they applied for by providing their names and identification numbers to track their application status, prescription amount, delivery status and other relevant matters. 62 The screenshot below shows the main page of Zhongxin Health mini program: 63 The users could sign up and log in on the account page.

The State Administration of Taxation (“SAT”) has promulgated several rules and notices to tighten the scrutiny over acquisition transactions in recent years, including the Interim Measures for the Administration of Remittance of Income Tax for Non-Resident Enterprise Withheld at Source (the “Interim Measures”) which became effective on January 1, 2009, the Notice of the SAT on Strengthening the Administration of Enterprise Income Tax on Gain Derived from Equity Transfer Made by Non-Resident Enterprise (the “Notice”) which became effective on January 1, 2008, the Announcement of the SAT on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source (the “SAT Circular 37”) which was promulgated on October 17, 2017, became effective on December 1, 2017 and was amended on June 15, 2018, and the Public Notice of the SAT Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-Resident Enterprises (the “Public Notice 7”) which became effective on February 3, 2015 and was partially repealed on December 1, 2017 and December 29, 2017.

The Company was offering these Class A Ordinary Shares pursuant to a prospectus supplement dated October 1, 2024 and a prospectus dated December 17, 2021, which is part of a registration statement on Form F-3 (File No. 333-256190) that was declared effective by the Securities and Exchange Commission on December 17, 2021. 2024 Private Placement On November 19, 2024, the Company consummated a private placement, pursuant to those certain securities purchase agreements, dated as of November 14, 2024 (the “Securities Purchase Agreements”), by and between the Company and the purchasers listed on the signature pages thereto (the “PIPE Purchasers”), in which the Company issued and sold (i) an aggregate of 10,000,000 Class A Ordinary Shares and (ii) warrants (the “PIPE Warrants,” and, together with the Class A Ordinary Shares, the “Securities”) to purchase an aggregate of 40,000,000 Class A Ordinary Shares at an exercise price of $1.80 per share with respect to 50% of the PIPE Warrants and an exercise price of $2.00 per share with respect to the other 50% of the PIPE Warrants, subject to adjustment as provided therein, for an aggregate purchase price of $3,000,000.

Such amendments took effect on April 30, 2021. 84 The Law for Promoting Private Education and its Implementing Rules On December 28, 2002, the SCNPC promulgated the Law for Promoting Private Education, or the Private Education Law and was later amended on June 29, 2013, November 7, 2016 and December 29, 2018, the amendment of which took effect on December 29,2018.

Such amendments took effect on April 30, 2021. 86 The Law for Promoting Private Education and its Implementing Rules On December 28, 2002, the SCNPC promulgated the Law for Promoting Private Education, or the Private Education Law and was later amended on June 29, 2013, November 7, 2016 and December 29, 2018, the amendment of which took effect on December 29,2018.

On July 15, 2023, upon the shareholders’ approvals at the annual general meeting, the Company adopted the amended and restated articles of association, pursuant to which each holder of Class B Ordinary Shares is entitled to one hundred (100) votes for each Class B Ordinary Shares held.

On July 5, 2023, upon the shareholders’ approvals at the annual general meeting, the Company adopted the amended and restated articles of association, pursuant to which each holder of Class B Ordinary Shares is entitled to one hundred (100) votes for each Class B Ordinary Shares held.

The PRC operating entities’ MDMOOC WeChat subscription account features similar interfaces and functions as their mobile app. It serves as additional access points to the PRC operating entities’ platform. 55 MDMOOC Website Users can access online healthcare information, education and training content and the services through the PRC operating entities’ website MDMOOC.org.

The PRC operating entities’ MDMOOC WeChat subscription account features similar interfaces and functions as their mobile app. It serves as additional access points to the PRC operating entities’ platform. 56 MDMOOC Website Users can access online healthcare information, education and training content and the services through the PRC operating entities’ website MDMOOC.org.

The PRC operating entities believe that after attending these programs, the participants would acquire the basic capacity to lead a wound-management department in a hospital. 57 The PRC operating entities believe the combination of online and onsite services would provide their end-users the greatest convenience.

The PRC operating entities believe that after attending these programs, the participants would acquire the basic capacity to lead a wound-management department in a hospital. 58 The PRC operating entities believe the combination of online and onsite services would provide their end-users the greatest convenience.

As of the date of the Annual Report, the PRC subsidiary of the VIE holds the Internet Content Provider License, and it falls within the restricted foreign investment for value-added telecommunications services that foreign ownership may not be more than 50%.

Below are screenshots of the PRC operating entities’ mobile app main entrance interface: 54 Opening Course is a collection of video courses of various medical fields and topics. The courses are often presented by medical experts. Most of the courses are free to users.

Below are screenshots of the PRC operating entities’ mobile app main entrance interface: 55 Opening Course is a collection of video courses of various medical fields and topics. The courses are often presented by medical experts. Most of the courses are free to users.

Prescription Outflow In March 2007, the National Ministry of Health (currently the National Health Commission of the People’s Republic of China) promulgated the Measures for the Administration of Prescriptions, stipulating that doctors must use the common name of drugs when prescribing, and shall not restrict the outflow of prescriptions.

Prescription Outflow In February 2007, the National Ministry of Health (currently the National Health Commission of the People’s Republic of China) promulgated the Measures for the Administration of Prescriptions, stipulating that doctors must use the common name of drugs when prescribing, and shall not restrict the outflow of prescriptions.

The PRC operating entities analysis the information about concepts and forms of medical education by searching medical articles from medical journals, and attending medical conferences such as Global Alliance for Medical Education, or GAME annual meeting, and integrate the information into the PRC operating entities’ programs.

The PRC operating entities analyze the information about concepts and forms of medical education by searching medical articles from medical journals, and attending medical conferences such as Global Alliance for Medical Education, or GAME annual meeting, and integrate the information into the PRC operating entities’ programs.

Internet diagnosis and treatment activities shall not be allowed for any patient receiving initial diagnosis. 79 Management of Prescription and Medical Records Internet hospitals who provide internet diagnosis and treatment activities shall strictly comply with the Measures for the Administration of Prescriptions and other provisions on the administration of prescriptions.

Internet diagnosis and treatment activities shall not be allowed for any patient receiving initial diagnosis. 80 Management of Prescription and Medical Records Internet hospitals who provide internet diagnosis and treatment activities shall strictly comply with the Measures for the Administration of Prescriptions and other provisions on the administration of prescriptions.

Any increase in the amount of the total investment and registered capital must be approved by the PRC Ministry of Commerce or its local counterpart. 90 The dividends paid by the subsidiary to its shareholder are deemed shareholder income and are taxable in China.

Any increase in the amount of the total investment and registered capital must be approved by the PRC Ministry of Commerce or its local counterpart. 92 The dividends paid by the subsidiary to its shareholder are deemed shareholder income and are taxable in China.

Below are screenshots of MDMOOC.org website: 56 The PRC operating entities designed their professional website to meet the needs of their users in a personalized and easy-to-use manner.

Below are screenshots of MDMOOC.org website: 57 The PRC operating entities designed their professional website to meet the needs of their users in a personalized and easy-to-use manner.

Our Structure The following charts summarize our corporate legal structure and identify our subsidiaries, the VIE and its subsidiaries as of the date hereto. 95 D. Property, Plants and Equipment Our headquarter and executive office is located in Shanghai, China and consist of approximately 166.23 square meter of office space.

Our Structure The following charts summarize our corporate legal structure and identify our subsidiaries, the VIE and its subsidiaries as of the date hereto. 97 D. Property, Plants and Equipment Facilities Our headquarter and executive office is located in Shanghai, China and consist of approximately 166.23 square meter of office space.

In addition to trademark protection, the PRC operating entities own 26 URL designations and domain names, including www.mdmooc.org, www.mdmooc.com, www.zhongxun.online, ygjkclass.com, zxylmd.com, which are important to our business. As of the date of this Annual Report, we have registered 36 trademarks. The following is a list of trademarks we have registered that are important to our business: No.

In addition to trademark protection, the PRC operating entities own 20 URL designations and domain names, including www.mdmooc.org, www.mdmooc.com, www.zhongxun.online, ygjkclass.com, zxylmd.com, which are important to our business. As of the date of this Annual Report, we have registered 18 trademarks. The following is a list of trademarks we have registered that are important to our business: No.

The principal regulations governing the distribution of dividends by foreign holding companies include the Company Law of the PRC, which was promulgated by SCNPC on December 29, 1993 and became effective on July 1, 1994 and subsequently amended on December 25,1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018, and December 29, 2023, the Foreign Investment Enterprise Law (1986) and its detailed rules, Foreign Investment Law, which was promulgated by SCNPC on March 15, 2019 and became effective on January 1, 2020.

The principal regulations governing the distribution of dividends by foreign holding companies include the Company Law of the PRC, which was promulgated by SCNPC on December 29, 1993 and became effective on July 1, 1994 and subsequently amended on December 25,1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018, and December 29, 2023, and the Foreign Investment Law, which was promulgated by SCNPC on March 15, 2019 and became effective on January 1, 2020.

Users need to register on Zhongxun IT system and WeChat mini program or log in their WeChat before accessing their portals for tailored patient management services. Services Customers For the fiscal year ended December 31, 2024, we generated revenue of service business from a total of 64 customers, of which 35 customers were NFP and 29 customers were pharmaceutical enterprises.

Users need to register on Zhongxun IT system and WeChat mini program or log in their WeChat before accessing their portals for tailored patient management services. Services Customers For the fiscal year ended December 31, 2025, we generated revenue of service business from a total of 60 customers, of which 29 customers were NFP and 31 customers were pharmaceutical enterprises.

As of the date of this Annual Report, we have established nearly 25 columns for cancer-related drug treatment, including drug treatment for lung cancer, liver cancer, and extended blood cancer, and 12 columns for drug treatment of rare diseases, including drug treatment for pulmonary fibrosis, multiple sclerosis, systemic lupus erythematosus, Crohn’s disease, and skin diseases.

As of the date of this Annual Report, we have established nearly 17 columns for cancer-related drug treatment, including drug treatment for lung cancer, liver cancer, and extended blood cancer, and 7 columns for drug treatment of rare diseases, including drug treatment for pulmonary fibrosis, multiple sclerosis, systemic lupus erythematosus, Crohn’s disease, and skin diseases.

The PRC operating entities’ product development team closely monitors the market to adjust and upgrade their existing educational products, and designs new products based on customers’ requests.

The PRC operating entities’ product development team closely monitors the market to adjust and upgrade their existing educational products, and designs new products based on customers’ requests for each program.

In the event of trademark infringement, the State Administration for Industry and Commerce has the authority to fine the infringer and to confiscate or destroy the infringing products. 67 The PRC operating entities’ primary trademark portfolio consists of 36 registered trademarks.

In the event of trademark infringement, the State Administration for Industry and Commerce has the authority to fine the infringer and to confiscate or destroy the infringing products. 69 The PRC operating entities’ primary trademark portfolio consists of 18 registered trademarks.

According to the Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.

The Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition. 95 According to the Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.

Xinjiang Pharmaceutical commenced its pharmaceutical business from the second half of 2022. For the year ended December 31, 2024, 2023 and 2022, Xinjiang Pharmaceutical generated revenues of approximately $2.15 million, $9.03 million and $1.22 million from sales of patented drugs, respectively.

Xinjiang Pharmaceutical commenced its pharmaceutical business from the second half of 2022. For the year ended December 31, 2025, 2024 and 2023, Xinjiang Pharmaceutical generated revenues of approximately $0.70 million, $2.15 million and $9.03 million , respectively, from sales of patented drugs, respectively.

On October 2, 2024, the Company consummated the Offering and issued the Shares to the investors at a price of $0.30 per share, generating the gross proceeds to the Company in the total amount of $928,200.

On October 2, 2024, the Company consummated the Offering and issued the Shares to the investors at a price of $0.30 per share, without giving effect to the 2026 Share Consolidation, generating the gross proceeds to the Company in total amount of $928,200.

For the fiscal year ended December 31, 2023, we generated revenue of service business from a total of 73 customers, of which 26 customers were NFP and 47 customers were pharmaceutical enterprises.

For the fiscal year ended December 31, 2023, we generated revenue of service business from a total of 73 customers, of which 26 customers were NFP and 47 customers were pharmaceutical enterprises. We generate revenues from a relatively small number of customers.

Registered Direct Offering On October 1, 2024, the Company entered into securities purchase agreements with investors (collectively, the “Purchase Agreements”) providing for the issuance and sale by the Company of 3,094,000 Class A ordinary Shares, in a registered direct offering (the “Offering”).

Xinjiang Pharmaceutical’s Customers Xinjiang Pharmaceutical’s customers are primarily pharmaceutical agents. Branding and Marketing The PRC operating entities believe that their rich content and satisfactory user experience have contributed to the expansion of their user base and the increase in user engagement, leading to a strong word-of-mouth effect that strengthens their brand awareness.

Branding and Marketing The PRC operating entities believe that their rich content and satisfactory user experience have contributed to the expansion of their user base and the increase in user engagement, leading to a strong word-of-mouth effect that strengthens their brand awareness.

However, as this promulgation is relatively new and no detailed guidance or implementation measures have been issued, there remains uncertainty as to how it should be interpreted and implemented.

However, and no detailed guidance or implementation measures have been issued, there remains uncertainty as to how it should be interpreted and implemented.

Compared with the Internet Publishing Measures, the Online Publishing Provisions set out more detailed provisions for online publishing activities, which mainly cover issues such as defining online publishing services, licensing and approvals, the administrative and supervisory regime and legal liabilities.

The Online Publishing Provisions, taking effect on March 10, 2016, superseded the Internet Publishing Measures. Compared with the Internet Publishing Measures, the Online Publishing Provisions set out more detailed provisions for online publishing activities, which mainly cover issues such as defining online publishing services, licensing and approvals, the administrative and supervisory regime and legal liabilities.

On March 29, 2022, the Decision of the State Council on Revising and Repealing Certain Administrative Regulations, which took effect on May 1, 2022, was promulgated to amend certain provisions of regulations including the Provisions on the Administration of Foreign-Invested Telecommunications Enterprises (2016 Revision), the requirement for major foreign investor to demonstrate a good track record and experience in operating value-added telecommunications businesses was deleted.

On March 29, 2022, the Decision of the State Council on Revising and Repealing Certain Administrative Regulations, which took effect on May 1, 2022, was promulgated to amend certain provisions of regulations including the Provisions on the Administration of Foreign-Invested Telecommunications Enterprises (2016 Revision), foreign-invested value-added telecommunications enterprises are no longer required to adopt the Sino-foreign joint venture form, and the requirement for major foreign investor to demonstrate a good track record and experience in operating value-added telecommunications businesses and the review by the MOFCOM was deleted.

As of the date hereto, the anti-influenza drug from Natco have been sold in over 20 provinces/cities in China The Customers and End Users of the PRC Operating Entities MDMOOC’s Customers and End Users The PRC operating entities’ customers are enterprises, NFP, and medical journals, primarily located in China.

As of the date hereto, the anti-influenza drug from Natco have been sold in over 20 provinces/cities in China. On June 30, 2025, the Company ceased operations of Xinjiang Pharmaceutical. The Customers and End Users of the PRC Operating Entities MDMOOC’s Customers and End Users The PRC operating entities’ customers are enterprises, NFP, and medical journals, primarily located in China.

We conduct our business through the VIE, Zhongchao Medical Technology (Shanghai) Corp., or Zhongchao Shanghai, a PRC company, and through 10 subsidiaries of Zhongchao Shanghai, including Shanghai Zhongxun, Shanghai Zhongxin, Maidemu Health, Beijing Boya, , Hainan Muxin, Shanghai Huijing, Xinjiang Pharmaceutical, Beijing Yisuizhen, West Angel, and Shanghai Zhongxuan, each a PRC company.

We conduct our business through the VIE, Zhongchao Medical Technology (Shanghai) Corp., or Zhongchao Shanghai, a PRC company, and through 7 subsidiaries of Zhongchao Shanghai, including Shanghai Zhongxun, Shanghai Zhongxin, Beijing Boya, Shanghai Huijing, Xinjiang Pharmaceutical, Beijing Zhongxuanboya, West Angel, and Shanghai Zhongxuan, each a PRC company.

For the fiscal years ended December 31, 2024, 2023 and 2022, the PRC operating entities’ pharmaceutical enterprise customers accounted for 21.8%, 13.1% and 33.1% of our total revenues, respectively. For the fiscal years ended December 31, 2024, 2023 and 2022, the PRC operating entities’ NFP customers accounted for 61.5%, 39.2% and 58.0%, of our total revenues, respectively.

For the fiscal years ended December 31, 2025, 2024 and 2023, the PRC operating entities’ pharmaceutical enterprise customers accounted for 26.3%, 21.8% and 13.1% of our total revenues, respectively. For the fiscal years ended December 31, 2025, 2024 and 2023, the PRC operating entities’ NFP customers accounted for 67.2%, 61.5% and 39.2%, of our total revenues, respectively.

The PRC operating entities’ R&D consists of product development and technology support. The PRC operating entities’ product development team is focused on market research and product development. The PRC operating entities develop and update their products and services based on market conditions and government policies.

The PRC operating entities’ product development team is focused on market research and product development. The PRC operating entities develop and update their products and services based on market conditions and government policies.

The Company did not retained an underwriter or placement agent with respect to the Offering and therefore was not paying any underwriting discounts or commissions.

The Company did not retain an underwriter or placement agent with respect to the Offering and therefore did not pay any underwriting discounts or commissions.

Ltd 21587258 Approved Category 5: Pharmaceutical preparations; Vaccines; Analgesics; Medical drugs; Medical tea; Medical ointments (cut-off) 2028.01.20 China 6 Shanghai Zhongxun Medical Technology Co., Ltd. 47286982 Approved Category 41: Education; Providing of training, Providing of educational information; Arranging and conducting of conferences, congresses and symposiums; Organization of exhibitions for cultural or educational purposes; Arranging and conducting of training; Publication of books and texts (cut-off) 2031.02.12 China 7 Beijing Zhongchao Boya Medical Technology Co., Ltd. 59485462 Approved Category 41: Providing of training, Arranging of experts conferences, Mobile libraries; text publishing (except advertising texts); E-books and magazines publishing; Providing non-downloadable global computer network online publishing; Publishing electronic newspapers through global computer network; Providing global network publishing Editing website publishing; Publishing and distributing medical technology related scientific paper (cut-off) 2032.03.13 China 8 Beijing Zhongchao Boya Medical Technology Co., Ltd. 59474281 Approved Category 44: Medical clinic services; Healthcare; Therapeutic services; Medical equipment rental; Health counseling; Diet nutrition guidance; Art therapy methods; Dispensing; Beauty services; Massage (cut-off) 2032.03.13 China 69 No.

Shanghai Zhongxuanboya is primarily engaged in providing patient management services. On February 24, 2025, Hainan Muxin Medical Technology Co., Ltd. (“Hainan Muxin”), a wholly owned subsidiary of Shanghai Zhongxin, and Shanghai Zhongxuanboya entered into an equity interest transfer agreement, pursuant to which Hainan Muxin agreed to transfer all its equity interest in Beijing Yisuizhen to Shanghai Zhongxuanboya.

On February 24, 2025, Hainan Muxin Medical Technology Co., Ltd. (“Hainan Muxin”), a wholly owned subsidiary of Shanghai Zhongxin, and Shanghai Zhongxuanboya entered into an equity interest transfer agreement, pursuant to which Hainan Muxin agreed to transfer all its equity interest in Beijing Yisuizhen to Shanghai Zhongxuanboya. As a result, Beijing Yisuizhen became a wholly owned subsidiary of Shanghai Zhongxuanboya.

Practicing Physicians On August 20, 2021, the Standing Committee of NPC (the “SCNPC”) issued the Doctors Law of the PRC (the “Doctors Law”), effective on May 1, 1999, and amended on August 27, 2009 and March 1, 2022.

Practicing Physicians On August 20, 2021, the Standing Committee of NPC (the “SCNPC”) issued the Doctors Law of the PRC (the “Doctors Law”), effective on March 1, 2022.

Beginning with the opening of trading on February 29, 2024, the Company’s Class A Ordinary Shares began trading on a post-2024 Share Consolidation basis on the Nasdaq Capital Market under the same symbol “ZCMD,” but under a new CUSIP number of G9897X115.

Beginning with the opening of trading on March 2, 2026, the Company’s Class A Ordinary Shares began trading on a post-2026 Share Consolidation basis on the Nasdaq Capital Market under the same symbol “ZCMD,” but under a new CUSIP number of G9897X123.

The “works” as defined under the Internet Publishing Measures include (i) contents from books, newspapers, periodicals, audio-visual products, electronic publications that have already been formally published or works that have been made public in other media, and (ii) all other edited or processed works of literatures, art, natural science, social science, engineering technology, etc.

Pursuant to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment (the “SAFE Circular 13”), which was promulgated by SAFE on February 13, 2015, became effective on June 1, 2015 and partially repealed on December 30, 2019, the power to accept foreign exchange registration was delegated from local foreign exchange bureau to local commercial banks where the assets or interest in the domestic entity was located. 91 Regulation Related to Overseas Listings On February 17, 2023, CSRC promulgated the Trial Measures, and five supporting guidelines, which became effective on March 31, 2023.

The PRC operating entities’ technology team, coupled with the large volume of data generated and collected on their platform each day, have created opportunities for continued improvements in their technology capabilities, empowering reliability, scalability and flexibility. 64 As of the date of this Annual Report, the PRC operating entities had a technology team with approximately 10 engineers, including those focusing on technology development to support every aspect of their business operation and those focusing on underlying data and technology maintenance.

The PRC operating entities’ technology team, coupled with the large volume of data generated and collected on their platform each day, have created opportunities for continued improvements in their technology capabilities, empowering reliability, scalability and flexibility. 65 As of the date of this Annual Report, the PRC operating entities had one engineer, who is supported by third-party contractors, including those focusing on technology development to support every aspect of their business operation and those focusing on underlying data and technology maintenance.

In addition, if future laws, administrative regulations or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing VIE Arrangements, the PRC operating entities may face substantial uncertainties as to whether the PRC operating entities can complete such actions in a timely manner, or at all. 93 According to the Foreign Investment Law, the State Council will publish or approve to publish the “negative list” for special administrative measures concerning foreign investment.

As part of this strategy, the PRC operating entities will (1) work with more medical associations to produce programs and courses to meet the need of healthcare professionals; (2) expand their R&D team and provide more support to their self-developed courses; (3) cooperate with international continuing medical education providers to improve the quality and diversity of their courses; and (4) expand their new media team to create and provide high-quality online courses for mobile users.

As part of this strategy, the PRC operating entities will (1) work with more medical associations to produce programs and courses to meet the need of healthcare professionals; (2) enhance their R&D development and provide more support to their self-developed courses; (3) cooperate with international continuing medical education providers to improve the quality and diversity of their courses; and (4) search for opportunities and expand into the global medical market .

The PIPE Warrants became exercisable for cash or on a cashless basis upon issuance. On December 12, 2024, the Company issued an aggregate of 9,600,000 Class A Ordinary Shares to the PIPE Purchasers upon cashless exercise of the PIPE Warrants, pursuant to the terms of the PIPE Warrants. As of the date hereof, no PIPE Warrants remain outstanding.

The PIPE Warrants became exercisable for cash or on a cashless basis upon issuance. On December 12, 2024, the Company issued an aggregate of 9,600,000 Class A Ordinary Shares to the PIPE Purchasers upon cashless exercise of the PIPE Warrants, pursuant to the terms of the PIPE Warrants without giving effect to the 2026 Share Consolidation.

The Foreign Investment Law grants national treatment to foreign-invested entities (“FIEs”), except for those FIEs that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list”.

According to the Foreign Investment Law, the State Council will publish or approve to publish the “negative list” for special administrative measures concerning foreign investment. The Foreign Investment Law grants national treatment to foreign-invested entities (“FIEs”), except for those FIEs that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list”.

Network data processing activities refers to the collection, retention, use, processing, transmission, provision, disclosure, deletion, and other activities of network data. Pursuant to the PRC Civil Code which was approved by the National People’s Congress on May 28, 2020, and came into effect on January 1, 2021, the personal information of a natural person shall be protected by the law.

Pursuant to the PRC Civil Code which was approved by the National People’s Congress on May 28, 2020, and came into effect on January 1, 2021, the personal information of a natural person shall be protected by the law.

Big Data The PRC operating entities build proprietary big data analysis framework on their platform to improve operating efficiencies and user satisfaction. The PRC operating entities leverage big data analytics and artificial intelligence technologies to enhance the accuracy of user behavior predictions and user profiling and optimize the PRC operating entities’ operation, targeted content and user experience.

The PRC operating entities leverage big data analytics and artificial intelligence technologies to enhance the accuracy of user behavior predictions and user profiling and optimize the PRC operating entities’ operation, targeted content and user experience.

As a result, Shanghai Zhongxin owns 60% of equity interest in West Angel. On February 7, 2025, Shanghai Zhongxuanboya Medical Technology Co., Ltd. (“Shanghai Zhongxuanboya”) was incorporated under the PRC laws, 100% of equity interest of which is owned by Shanghai Zhongxun Medical Technology Co., Ltd. (“Shanghai Zhongxun”), a wholly owned subsidiary of Zhongchao Shanghai.

On February 7, 2025, Shanghai Zhongxuanboya Medical Technology Co., Ltd. (“Shanghai Zhongxuanboya”) was incorporated under the PRC laws, 100% of equity interest of which is owned by Shanghai Zhongxun Medical Technology Co., Ltd. (“Shanghai Zhongxun”), a wholly owned subsidiary of Zhongchao Shanghai. Shanghai Zhongxuanboya is primarily engaged in providing patient management services.

Regulations on Tax in the PRC Income Tax In January 2008, the PRC Enterprise Income Tax Law (“EIT Law”) took effect, which was last amended by the Standing Committee of the National People’s Congress on December 29, 2018, and on December 6, 2007, the State Council enacted the Implementation Regulations for the Enterprise Income Tax Law of the PRC, which was amended on April 23, 2019 and December 6, 2024 .

Infrastructure, Operations and Technology The success of the PRC operating entities’ business is supported by their strong technological capabilities that enable them to deliver superior user experience and increase their operational efficiency.

The PRC operating entities also conduct onsite marketing primarily in the form of donation activities with hospitals to improve the PRC operating entities’ brand awareness. Infrastructure, Operations and Technology The success of the PRC operating entities’ business is supported by their strong technological capabilities that enable them to deliver superior user experience and increase their operational efficiency.

Regulation of Foreign Currency Exchange and Dividend Distribution Foreign Currency Exchange. The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations (1996), as amended on August 5, 2008, the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996) and the Interim Measures on Administration on Foreign Debts (2003).

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations (1996), as amended on August 5, 2008, and the Interim Measures on Administration on Foreign Debts (2003), last amended on July 26, 2022.

The Implementation Rules for the Drug Administration Law of the PRC, was promulgated by the State Council in August 2002 and amended in 2016, 2019 and 2024, which emphasized the detailed implementation rules of drugs administration.

The Implementation Rules for the Drug Administration Law of the PRC, was promulgated by the State Council in August 2002 and amended in 2016, 2019 and 2024, and most recently on January 16, 2026, with the latest amendments to take effect on May 15, 2026, which emphasized the detailed implementation rules of drugs administration.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

63 edited+23 added−54 removed37 unchanged

2024 filing

2025 filing

Biggest changeFor the Years Ended December 31, 2024 2023 2022 Net cash (used in) provided by operating activities $ (1,473,243 ) $ 54,229 $ (661,740 ) Net cash used in investing activities (1,807,753 ) (3,754,655 ) (3,346,658 ) Net cash provided by financing activities 3,838,200 - 1,850,744 Effect of exchange rate changes on cash and cash equivalents (264,592 ) (271,333 ) (236,875 ) Net change in cash and cash equivalents 292,612 (3,971,759 ) (2,394,529 ) Cash and cash equivalents at beginning of year 7,548,694 11,520,453 13,914,982 Cash and cash equivalents at end of year $ 7,841,306 $ 7,548,694 $ 11,520,453 105 Operating activities Fiscal Years Ended December 31, 2024 and 2023 Net cash used in operating activities was $1,473,243 for the fiscal year ended December 31, 2024, a change of $1,527,472 from net cash provided by operating activities of $54,229 for the fiscal year ended December 31, 2023.

Biggest changeFor the Years Ended December 31, 2025 2024 2023 Net cash provided by (used in) operating activities $ 845,391 $ (1,473,243 ) $ 54,229 Net cash used in investing activities (826,599 ) (1,807,753 ) (3,754,655 ) Net cash provided by financing activities - 3,838,200 - Effect of exchange rate changes on cash and cash equivalents 237,977 (264,592 ) (271,333 ) Net change in cash and cash equivalents 256,769 292,612 (3,971,759 ) Cash and cash equivalents at beginning of year 7,841,306 7,548,694 11,520,453 Cash and cash equivalents at end of year $ 8,098,075 $ 7,841,306 $ 7,548,694 105 Operating activities For the year ended December 31, 2025, we had net cash provided by operating activities of approximately $0.8 million, primarily attributable to: (i) non-cash share-based compensation expenses of approximately $3.7 million, provision for expected credit losses of approximately $0.9 million and depreciation and amortization expenses of approximately $0.3 million; (ii) a decrease in accounts receivable of approximately $1.2 million, attributable to both declining sales caused by intense industry competition and our intensified collection, and (ⅲ) a decrease in inventories of approximately $0.6 million, due to inventory clearance following Chongqing Xinjiang’s deregistration.

Cost of revenues incurred for preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects was comprised of direct related costs incurred for preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects, including expenses of travelling and accommodation, seminar site-rental, video production and backdrop production, professional service fees charged by experts who provide online and offline seminars, and salary and welfare expenses incurred by the key members of the editorial, design and production team and patient-aid projects, as well as outsourced labor cost in patient-aid projects.

We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements. Revenue recognition ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

We believe the following accounting policy and estimates involve the most significant judgments used in the preparation of our financial statements. Revenue recognition ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

Although the outcomes of these legal proceedings cannot be predicted, we do not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

The increase in gross profit margin for service sales was mainly due to a shift in the mix of services sold, with the fiscal year of 2024 we providing more consulting and academic support services, which had higher profit margins. 98 Cost of revenues Cost of revenues was comprised of direct related costs incurred for preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects and cost of patented drugs.

The increase in gross profit margin for service sales was mainly due to a shift in the mix of services sold, with the fiscal year of 2024 we providing more consulting and academic support services, which had higher profit margins. 102 Cost of revenues Cost of revenues was comprised of direct related costs incurred for preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects and cost of patented drugs.

Trend information Other than as disclosed elsewhere in this Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

The Company identified each distinct service, or each series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, as a performance obligation. Transaction price is allocated among different performance obligations identified in one contract. Timing of revenue recognition may differ from the timing of invoicing to customers.

We identified each distinct service, or each series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, as a performance obligation. Transaction price is allocated among different performance obligations identified in one contract. Timing of revenue recognition may differ from the timing of invoicing to customers.

The decrease was partially offset by an increase of approximately $0.6 million in professional service expenses mostly related to business development. 99 Research and development expenses Research and development expenses decreased by approximately $0.2 million, or 50.9%, from approximately $0.5 million for the fiscal year ended December 31, 2023 to approximately $0.3 million for the fiscal year ended December 31, 2024.

The decrease was partially offset by an increase of approximately $0.6 million in professional service expenses mostly related to business development. 103 Research and development expenses Research and development expenses decreased by approximately $0.2 million, or 50.9%, from approximately $0.5 million for the fiscal year ended December 31, 2023 to approximately $0.3 million for the fiscal year ended December 31, 2024.

The travelling and accommodation expenses, including but not limited to the transportation expenses and hotel accommodation expenses, represented the costs arising from lecturers’ attendance and participation of the offline seminars. Other travelling expenses were incurred by the Company’s medical department for videos production, live streaming of the offline seminars, and materials collection to create online courses.

The travelling and accommodation expenses, including but not limited to the transportation expenses and hotel accommodation expenses, represented the costs arising from lecturers’ attendance and participation of the offline seminars. Other travelling expenses were incurred by our medical department for videos production, live streaming of the offline seminars, and materials collection to create online courses.

Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues We generate revenues from pharmaceutical enterprise customers and NFP from design and production of online medical courses, organizing offline medical training services, consulting and academic support services and patient management services for patient-aid projects. We also generate revenues from sales of patented drugs.

Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues We generate revenues from pharmaceutical enterprise customers and NFP from design and production of online medical courses, organizing offline medical training services, consulting and academic support services and patient management services for patient-aid projects. We also generate revenues from sales of patented drugs.

The travelling and accommodation expenses, including but not limited to the transportation expenses and hotel accommodation expenses, represented the costs arising from lecturers’ attendance and participation of the offline seminars. Other travelling expenses were incurred by our medical department for videos production, live streaming of the offline seminars, and materials collection to create online courses.

We believe the following factors drive our success: - Acknowledged by leading pharmaceutical enterprises - Reliable Professional Content Production - Well Organized and Easy-To-Use Websites and Apps 97 Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented.

We believe the following factors drive our success: - Acknowledged by leading pharmaceutical enterprises - Reliable Professional Content Production - Well Organized and Easy-To-Use Websites and Apps 99 Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented.

Offline medical training and education services courses – though customers can benefit from each service commitment, including design, production and presentation of medical courses, together with other readily available resources. The promises in the contracts with customers is integration of all of these service commitments.

Offline medical training and education services courses – though customers can benefit from each service commitment, including design, production and presentation of medical courses, together with other readily available resources. The promises in the contracts with customers are integration of all of these service commitments.

However, these restrictions have no impact on the ability of our PRC subsidiary to transfer funds to us as we have no present plans to declare dividend which we plan to retain our retained earnings to continue to grow our business.

However, these restrictions have no impact on the ability of the PRC entities to transfer funds to us as we have no present plans to declare dividend which we plan to retain our retained earnings to continue to grow our business.

The Company is responsible to provide doctors with access to training courses or training materials in connection with the drug treatment, review the completeness of application documents from patients, and other ad-hoc works (such programs with these plug-in features are hereinafter referred as the “patient-aid projects”). The arrangements are structured as fixed price contracts.

We are responsible to provide doctors with access to training courses or training materials in connection with the drug treatment, review the completeness of application documents from patients, and other ad-hoc works (such programs with these plug-in features are hereinafter referred as the “patient-aid projects”). The arrangements are structured as fixed price contracts.

The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.

We applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.

The decrease was mainly attributable to: i) a decrease of approximately $1.5 million in advertising and promotion expenses as the Company gained reputation in medical healthcare industry and decreased domestic related expenditure, ii) a decrease of approximately $0.9 million in sales commission paid to third parties as the Company’s patented drug sales decreased, and iii) a decrease of approximately $0.4 million in salary and welfare expenses due to sales force reduction as the Company experienced a decrease in patented drug sales.

The decrease was mainly attributable to: i) a decrease of approximately $1.5 million in advertising and promotion expenses as we gained reputation in medical healthcare industry and decreased domestic related expenditure, ii) a decrease of approximately $0.9 million in sales commission paid to third parties as our patented drug sales decreased, and iii) a decrease of approximately $0.4 million in salary and welfare expenses due to sales force reduction as we experienced a decrease in patented drug sales.

The performance obligation of presentation of the courses online for users for a period of time is immaterial in the context of the contract because presentation of each course incurred no significant additional cost, nor will it occupy any significant resources of the Company, except for little digital space on the Company’s server, which is inconsequential.

The performance obligation of presentation of the courses online for users for a period of time is immaterial in the context of the contract because presentation of each course incurred no significant additional cost, nor will it occupy any significant resources of us, except for little digital space on our server, which is inconsequential.

The decrease was mainly attributable to: i) a decrease of approximately $1.2 million in bad debt expenses as the Company enhanced their collection efforts in 2024, ii) a decrease of approximately $0.8 million in salary and welfare expenses as a result of decreased personnel number, and iii) a decrease of approximately $0.3 million in depreciation and amortization expenses .

The decrease was mainly attributable to: i) a decrease of approximately $1.2 million in bad debt expenses as we enhanced our collection efforts in 2024, ii) a decrease of approximately $0.8 million in salary and welfare expenses as a result of decreased personnel number, and iii) a decrease of approximately $0.3 million in depreciation and amortization expenses.

These travelling and accommodation expenses are well budgeted before any agreements entered into by the Company and the customers. Therefore, such expenses are well covered by the customers under those agreements. The Company is not reimbursed by the customers separately. Cost of revenues incurred for patented drugs was primarily comprised of purchase cost of drugs.

These travelling and accommodation expenses are well budgeted before any agreements entered into by us and the customers. Therefore, such expenses are well covered by the customers under those agreements. We are not reimbursed by the customers separately. Cost of revenues incurred for patented drugs was primarily comprised of purchase cost of drugs.

Net income As a result of the foregoing, we reported a net loss of approximately $0.3 million for the year ended December 31, 2024, as compared with a net loss of approximately $11.3 million for the year ended December 31, 2023.

Net loss As a result of the foregoing, we reported a net loss of approximately $0.3 million for the year ended December 31, 2024, as compared with a net loss of approximately $11.3 million for the year ended December 31, 2023. 104 B.

The Company uses an input-based method to measure the progress, by reference to the cost incurred in performing the obligation. The fees are fixed at the inception of the services and are collected either in advance or after the services are provided.

We use an input-based method to measure the progress, by reference to the cost incurred in performing the obligation. The fees are fixed at the inception of the services and are collected either in advance or after the services are provided.

In accordance with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

In accordance with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

Current foreign exchange and other regulations in the PRC may restrict our PRC subsidiary, our VIE and VIE’s subsidiaries in their ability to transfer their net assets to the Company and its subsidiaries in Cayman Islands, and Hong Kong.

Current foreign exchange and other regulations in the PRC may restrict our PRC subsidiary, Zhongchao VIE and its subsidiaries in their ability to transfer their net assets to us and its subsidiaries in Cayman Islands, and Hong Kong.

Therefore, the Company combines all service commitments performed as a single performance obligation. Patient management services in patient-aid projects The Company is engaged by NFPs and pharmaceutical enterprises to assist in the operation of patient-aid projects with a purpose to facilitate qualified patients to obtain free drug treatment from NFPs.

Therefore, we combine all service commitments performed as a single performance obligation. Patient management services in patient-aid projects We are engaged by NFPs and pharmaceutical enterprises to assist in the operation of patient-aid projects with a purpose to facilitate qualified patients to obtain free drug treatment from NFPs.

Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements.

Therefore, the PRC entities are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements.

The price is determined as stated in contracts and does not include any variable consideration. The Company identifies a single performance obligation from contracts and recognizes revenue over a period of time during which the Company provides the assistance to the NFPs till the earlier of the expiration of contract period or the free drugs are completely delivered.

The price is determined as stated in contracts and does not include any variable consideration. We identify a single performance obligation from contracts and recognize revenue over a period of time during which we provide the assistance to the NFPs till the earlier of the expiration of contract period or the free drugs are completely delivered.

Cost of revenues Cost of revenues was comprised of direct related costs incurred for preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects and cost of patented drugs.

We discontinued the operation of sales of drugs. 100 Cost of revenues Cost of revenues was comprised of direct related costs incurred for preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects and cost of patented drugs.

Zhongchao VIE and its subsidiaries also plug in supplemental features, to manage the drug treatment including reviewing patients’ applications, tracking their usage of drugs, and collecting related information, or the patient-aid projects. Since 2022, Zhong VIE, through its subsidiary, also sells patented drugs.

Zhongchao VIE and its subsidiaries also plug in supplemental features, to manage the drug treatment including reviewing patients’ applications, tracking their usage of drugs, and collecting related information, or the patient-aid projects. From January 2022 to June 2025, Zhongchao VIE, through its subsidiary, also sold patented drugs.

Accounts receivable consisted of amounts invoiced and amounts for which revenue recognized prior to invoicing when the Company has satisfied its performance obligation and has the unconditional right to payment. Advances from customers consists of payments received related to unsatisfied performance obligations at the end of the period.

Accounts receivable consisted of amounts invoiced and amounts for which revenue was recognized prior to invoicing when we had satisfied our performance obligation and had the unconditional right to payment. Advances from customers consist of payments received related to unsatisfied performance obligations at the end of the period.

The Company concludes that these service commitments are highly dependent with each other, in the context of the contract term. Thus, these service commitments are not distinct from each other, and the Company combines all service commitments performed as a single performance obligation.

We conclude that these service commitments are highly dependent on each other, in the context of the contract term. Thus, these service commitments are not distinct from each other, and we combine all service commitments performed as a single performance obligation.

We expect that a substantial majority of our future revenues will be denominated in Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled.

The Company has no material incremental costs for obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year. 108 Medical training and education services The Company designs and provides medical training and education courses in both online and offline formats to physicians and allied healthcare professionals (the “training and education services”).

We have no material incremental costs for obtaining contracts with customers for which we expect the benefit of those costs to be longer than one year. 108 Medical training and education services We design and provide medical training and education courses in both online and offline formats to physicians and allied healthcare professionals (the “training and education services”).

However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.

If our existing PRC subsidiary or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.

As a result, Zhongchao Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiary. If our existing PRC subsidiary or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.

Online medical training and education services courses – the promises in the contracts with customers consist of provision of online courses and presentation of the courses online for users to access for a period of time.

We are a principal in the provision of service and recognize revenues on a gross basis. Online medical training and education services courses – the promises in the contracts with customers consist of provision of online courses and presentation of the courses online for users to access for a period of time.

To utilize the proceeds, we received from the private placement for the fiscal year ended December 31, 2024, we may make additional capital contributions to our PRC subsidiary, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, or make loans to the PRC subsidiaries. However, most of these uses are subject to PRC regulations.

To utilize the proceeds, we received from the private placement in 2024, we may make additional capital contributions to the PRC entities, establish new PRC entities and make capital contributions to these PRC entities, or make loans to the PRC entities. However, most of these uses are subject to PRC regulations.

Investing activities For the fiscal year ended December 31, 2024, we had net cash used in investing activities of $1,807,753 which was primarily attributable to purchase of properties and equipment of $3,045,183, investments of $10,656,730 in short-term investments.

For the year ended December 31, 2024, we had net cash used in investing activities of approximately $1.8 million which was primarily attributable to purchase of properties and equipment of approximately $3.0 million, investments of approximately $10.7 million in short-term investments.

The Company identifies a single performance obligation from contracts. The Company recognizes revenue at the point when the service was rendered. Payments received in advance from customers are recorded as “advance from customers” in the consolidated balance sheets. Advance from customers is recognized as revenue when the Company delivers the courses to its customers. Such advance payment received are non-refundable.

We identify a single performance obligation from contracts. We recognize revenue at the point when the services are rendered. Payments received in advance from customers are recorded as “advance from customers” in the consolidated balance sheets. Advance from customers is recognized as revenue when we deliver the courses to our customers. Such advance payments received are non-refundable.

We also generate revenues from sales of patented drugs. Revenues decreased by approximately $3.6 million, or 18.4%, from approximately $19.4 million for the fiscal year ended December 31, 2023 to approximately $15.9 million for the fiscal year ended December 31, 2024.

Revenues decreased by approximately $3.6 million, or 18.4%, from approximately $19.4 million for the fiscal year ended December 31, 2023 to approximately $15.9 million for the fiscal year ended December 31, 2024. The overall revenue decrease was primarily caused by a decrease of approximately $6.9 million in revenues from sales of drugs.

For the Years Ended December 31, 2024 2023 2022 Revenues $ $ $ Service 13,712,964 10,406,734 12,935,420 Product 2,151,809 9,027,211 1,216,096 Total revenues 15,864,773 19,433,945 14,151,516 Cost of revenues Service (5,510,088 ) (5,162,425 ) (7,166,871 ) Product (1,442,472 ) (5,759,328 ) (627,981 Total cost of revenues (6,952,560 ) (10,921,753 ) (7,794,852 ) Gross Profit 8,912,213 8,512,192 6,356,664 Operating Expenses Selling and marketing expenses (4,010,382 ) (6,710,757 ) (2,099,968 ) General and administrative expenses (4,989,784 ) (6,697,309 ) (6,799,634 ) Research and development expenses (252,451 ) (514,411 ) (411,524 ) Loss from disposal of property and equipment (863 ) (1,719,442 ) - Impairment of goodwill - (5,617,865 ) - Impairment of intangible assets - (536,206 ) - Total Operating Expenses (9,253,480 ) (21,795,990 ) (9,311,126 ) Loss from Operations (341,267 ) (13,283,798 ) (2,954,462 ) Interest income, net 243,008 237,054 142,014 Other income, net 160,015 1,069,745 262,442 Income (Loss) Before Income Taxes 61,756 (11,976,999 ) (2,550,006 ) Income tax (expenses) benefits (335,169 ) 669,760 (272,313 ) Net Loss $ (273,413 ) $ (11,307,239 ) $ (2,822,319 ) Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues We generate revenues from pharmaceutical enterprise customers and NFP from design and production of online medical courses, organizing offline medical training services, consulting and academic support services and patient management services for patient-aid projects.

For the Years Ended December 31, 2025 2024 2023 Revenues Service $ 10,678,554 $ 13,712,964 $ 10,406,734 Product 696,442 2,151,809 9,027,211 Total revenues 11,374,996 15,864,773 19,433,945 Cost of revenues Service (5,665,996 ) (5,510,088 ) (5,162,425 ) Product (587,459 ) (1,442,472 ) (5,759,328 ) Total cost of revenues (6,253,455 ) (6,952,560 ) (10,921,753 ) Gross Profit 5,121,541 8,912,213 8,512,192 Operating Expenses Selling and marketing expenses (1,490,594 ) (4,010,382 ) (6,710,757 ) General and administrative expenses (9,814,087 ) (4,990,647 ) (6,697,309 ) Research and development expenses (8,085 ) (252,451 ) (514,411 ) Loss from disposal of property and equipment - - (1,719,442 ) Impairment of goodwill - - (5,617,865 ) Impairment of intangible assets - - (536,206 ) Total Operating Expenses (11,312,766 ) (9,253,480 ) (21,795,990 ) Loss from Operations (6,191,225 ) (341,267 ) (13,283,798 ) Interest income, net 343,128 243,008 237,054 Other income, net 79,412 160,015 1,069,745 (Loss) Income Before Income Taxes (5,768,685 ) 61,756 (11,976,999 ) Income tax (expenses) benefits (46,182 ) (335,169 ) 669,760 Net Loss $ (5,814,867 ) $ (273,413 ) $ (11,307,239 ) Year ended December 31, 2025 compared to year ended December 31, 2024 Revenues We generate revenues from pharmaceutical enterprise customers and NFP from design and production of online medical courses, organizing offline medical training services, consulting and academic support services, patient management services for patient-aid projects, and sales of patented drugs.

We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us. F. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP.

Financing activities For the fiscal year ended December 31, 2024, we had net cash provided by financing activities of $3,838,200 from offering 13,094,000 Class A ordinary shares, including 3,094,000 Class A ordinary Shares in a registered direct offering and 10,000,000 Class A Ordinary Shares and such PIPE Warrants to purchase an aggregate of 40,000,000 Class A Ordinary Shares in a private placement sale.

For the year ended December 31, 2024, we had net cash provided by financing activities of $3 .8 million from offering 1,636,750 Class A ordinary shares, including 386,750 Class A ordinary Shares in a registered direct offering and 1,250,000 Class A Ordinary Shares and such PIPE Warrants to purchase an aggregate of 5,000,000 Class A Ordinary Shares in a private placement sale (giving effect to the 2026 Share Consolidation).

The overall revenue decrease was primarily caused by a decrease of approximately $6.9 million in revenues from sales of drugs. These drugs, introduced in the second half of 2022, quickly reached peak sales in 2023 during the spread of COVID-19. However, demand for the drugs normalized in 2024, leading to the lower sales.

These drugs, introduced in the second half of 2022, quickly reached peak sales in 2023 during the spread of COVID-19. However, demand for the drugs normalized in 2024, leading to the lower sales.

The decrease wa s mainly attributable to the decreased personnel number as the Company reduced its R&D projects.

The decrease was mainly attributable to the decreased personnel number as we reduced our R&D projects.

Our expectations regarding the future are based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates.

We continually evaluate these judgments and estimates based on our own experience, knowledge and assessment of current business and other conditions. Our expectations regarding the future are based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources.

For the fiscal year ended December 31, 2023, we had net cash used in investing activities of $3,754,655 which was primarily attributable to purchase of properties and equipment of $839,736, investments of $6,317,257 in certain short-term investments, and loans of $833,226 made to third parties.

The cash used in investing activities was partially offset by proceeds of approximately $11.4 million from redemption of short-term investments, collection of loans of approximately $0.3 million from third parties and proceeds of approximately $0.2 million from redemption of equity investment. 106 For the year ended December 31, 2023, we had net cash used in investing activities of approximately $3.8 million which was primarily attributable to purchase of properties and equipment of approximately $0.8 million, investments of approximately $6.3 million in certain short-term investments, and loans of approximately $0.8 million made to third parties.

The cash used in investing activities was partially offset by proceeds of $11,421,047 from redemption of short-term investments, collection of loans of $277,944 from third parties and proceeds of $195,169 from redemption of equity investment.

The cash used in investing activities was partially offset by proceeds of approximately $1.6 million from redemption of short-term investments, collection of loans of approximately $2.4 million from third parties and collection of loans from related parties of approximately $0.2 million.

In addition to the change in profitability, the change in net cash used in operating activities was the result of several factors, including: ● An increase of $2,295,858 in accounts receivable for the fiscal year ended December 31, 2024 was mainly caused by an increase of service revenue close to the end of year 2024, which was mainly due to the absence of COVID-19 related disruptions and services demand normalized in 2024, and the Company generally provide credit term ranging between one to six months for customers. ● A decrease of $1,285,433 in prepayments for the fiscal year ended December 31, 2024 which was mainly caused by decreased purchases for the drugs to reduce our inventories in the year of 2024. ● A decrease of $620,949 in advances from customers for the fiscal year ended December 31, 2024 which was mainly due to the decrease in our drugs sales which customers are required to prepay for their orders.

For the year ended December 31, 2024, we had net cash used in operating activities of approximately $1.5 million, primarily attributable to: (i) a net loss of approximately $0.3 million; (ii) an increase in accounts receivable of approximately $2.3 million, which was mainly due to the absence of COVID-19 related disruptions the normalization of and services demand which increased the services revenue, and we generally provide credit terms ranging between one to six months for customers, and (ⅲ) a decrease of approximately $0.6 million in advances from customers, which was mainly due to the decrease in our drugs sales which customers are required to prepay for their orders.

GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. We continually evaluate these judgments and estimates based on our own experience, knowledge and assessment of current business and other conditions.

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

Net income As a result of the foregoing, we reported a net loss of $11,307,239 for the year ended December 31, 2023, as compared with a net loss of $2,822,319 for the year ended December 31, 2022. 102 Off-balance Sheet Arrangements We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements.

Off-balance Sheet Arrangements We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements.

Cash Flows The following table sets forth a summary of our cash flows for the fiscal years ended December 31, 2024, 2023 and 2022.

The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future Cash Flows The following table sets forth a summary of our cash flows for the fiscal years ended December 31, 2025, 2024 and 2023.

In cases where the Company engages third party experts to provide presentation in medical courses, as the Company determines the contents and the participants, it has the ability to direct these experts to provide medical training services for the Company.

In cases where we engage third party experts to provide presentation in medical courses, as we determine the contents and the participants, we have the ability to direct these experts to provide medical training services for us. Therefore, we are primarily responsible for fulfilling the promise to provide the medical courses and have the discretion in establishing the transaction price.

Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Commitments and Contingencies From time to time, we may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business.

For the year ended December 31, 2024, we do not have any similar impairment. Other income, net For the fiscal year ended December 31, 2024, other income, net was primarily consisted of approximately $0.1 million gain from changes in fair value of our short-term investments.

Other income, net mainly includes interest income of approximately $0.2 million and other income of approximately $0.2 million. Other income primarily consisted of approximately $0.1 million gain from changes in fair value of our short-term investments.

For the fiscal year ended December 31, 2023, we had no cash provided by or used in financing activities. For the fiscal year ended December 31, 2022, we had net cash provided by financing activities of $1,850,744 from offering 1,060,000 Class A ordinary shares in a shelf offering.

Financing activities For the year ended December 31, 2025, we had no cash provided by or used in financing activities.

Some of our accounting policies require a higher degree of judgment than others in their application.

Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

To date, we have financed our operations primarily through cash flows from operations, and equity financing. During the years ended December 31, 2024, 2023 and 2022, we had a net loss of approximately $0.3 million, $11.3 million and $2.8 million, respectively.

During the years ended December 31, 2025, 2024 and 2023, we generated net losses of approximately $5.8 million, $0.3 million and $11.3 million, respectively. As of December 31, 2025, we had cash and cash equivalents of approximately $8.1 million and working capital of approximately $15.4 million.

We intend to continue to use these funds to grow our business primarily by: ● Strengthen our brand awareness of MDMOOC and Zhongxin Health ● Expand and enhancement of medical course content 104 ● Grow medical professional user community ● Recruit more experienced editorial staff, and ● Develop new teaching platforms ● Explore the business in services for cancer patients support Although we consolidate the results of the PRC operating entities and its subsidiaries, we only have access to cash balances or future earnings of the PRC operating entities through our VIE Arrangements with the PRC operating entities.

We intend to use these funds to grow our business primarily by: ● Conduct research on international markets to identify expansion opportunities ● Recruit talent globally to support business growth and innovation ● Explore and gradually develop global markets for long-term international presence Although we consolidate the results of the Zhongchao VIE and its subsidiaries, we only have access to cash balances or future earnings of the Zhongchao VIE and its subsidiaries through our VIE Arrangements with Zhongchao VIE.

Selling and marketing expenses Selling and marketing expenses increased by $4,610,789, from $2,099,968 for the fiscal year ended December 31, 2022 to $6,710,757 for the fiscal year ended December 31, 2023.

Selling and marketing expenses Selling and marketing expenses decreased by approximately $2.5 million, or 62.8%, from approximately $4.0 million for the year ended December 31, 2024 to approximately $1.5 million for the year ended December 31, 2025.

Revenues increased by $5,282,429, or 37.3% from $14,151,516 for the fiscal year ended December 31, 2022 to $19,433,945 for the fiscal year ended December 31, 2023.

Revenues decreased by approximately $4.5 million, or 28.3%, from approximately $15.9 million for the fiscal year ended December 31, 2024 to approximately $11.4 million for the fiscal year ended December 31, 2025.

We conduct our operations primarily through our PRC subsidiary and the PRC operating entities in China. As a result, Zhongchao Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiary.

For the year ended December 31, 2023, we had no cash provided by or used in financing activities. Holding Company Structure Zhongchao Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our PRC subsidiary and the PRC operating entities in China.

Removed

For the fiscal year ended December 31, 2023, other income, net was primarily consisted of approximately $0.7 million gain from changes in fair value of our short-term investments and approximately $0.1 million upward adjustments to our long-term investments in an equity security as well as approximately $0.1 million government subsidies.

Added

The primary reason for the overall revenue decline is an approximately $0.8 million decrease in revenue from medical training and education services and an approximately $2.2 million decrease in revenues from patient-aid projects. This decrease resulted from our optimizing projects with extended payment cycles by choosing not to renew contracts or reducing collaborations.

Removed

The increase was primarily caused by an increase of $7,811,115 in revenues from sales of drugs, which was attributable to our continual expansion of patent drugs sales since our commencement of the drug sales in 2022. Furthermore, the increase in revenue is partially offset by the decrease in assistance in patient-aid projects of $2,290,147.

Added

Sales of drugs also decreased by approximately $1.5 million for the year ended December 31, 2025 as compared to the same period in the prior year. Over the past two years, intensified competition among similar pharmaceutical products, coupled with the impact of centralized procurement in China, has made imported drugs uncompetitive in pricing.

Removed

The decrease in assistance in patient-aid projects is primarily attributable to the Company discontinued some low margin projects during fiscal year 2023 to improve overall profitability. 100 For the fiscal years ended December 31, 2023 and 2022, we earned a gross profit margin of 43.8% and 44.9%, respectively.

Added

Cost of revenues decreased by approximately $0.7 million, or 10.1%, from approximately $6.9 million for the fiscal year ended December 31, 2024 to approximately $6.2 million for the fiscal year ended December 31, 2025.

Removed

For product sales, we earned a gross profit margin of 36.2% in the fiscal year ended December 31, 2023 as compared to 48.4% for the fiscal year ended December 31, 2022. The decrease in gross margin for product sales is primarily due to increased cost for purchases made from India due to the continually depreciation of RMB.

Added

This was primarily attributable to a decrease of approximately $0.2 million in cost of patient management services, resulting from reduced patient-aid projects, which led to lower labor costs.

Removed

For service sales, we earned a gross profit margin of 50.4% as compared to 44.6% for the fiscal year ended December 31, 2022. The increase in gross profit margin for service sales is mainly due to we terminated certain low margin projects to improve overall profitability.

Added

This decrease was partially offset by an increase of approximately $0.4 million in cost of medical training and education services, mainly due to higher video production, live streaming and technology costs incurred to better meet customers demands. Additionally, the cost of patented drug sales decreased by approximately $0.9 million, consistent with the decline in revenue from patented drugs.

Removed

Cost of revenues increased by $3,126,901, or 40.1%, from $7,794,852 for the fiscal year ended December 31, 2022 to $10,921,753 for the fiscal year ended December 31, 2023. The increase was mainly attributable to an increase of $5,131,347 in cost of sales of patent drugs as we continually grow our patent drug sale business since 2022.

Added

Gross Profit Gross profit decreased by approximately $3.8 million, or 42.5%, from approximately $8.9 million for the year ended December 31, 2024 to approximately $5.1 million for the year ended December 31, 2025. For the years ended December 31, 2025 and 2024, our overall gross margin was 45.0% and 56.2%, respectively.

Removed

The increase is partially offset by decrease of $1,131,169 cost of revenue for assistance in patient-aid projects as our revenue generated from this revenue stream decreased in 2023 and decrease of $882,045 in cost of revenues for medical training and education services as we terminated certain lower margin projects during the fiscal year ended December 31, 2023.

Added

The decrease in gross margin was primarily due to intensified competition leading to reduced revenue, while platform costs and other inputs could not be reduced at the same pace. Moreover, project execution costs have increased to meet higher customer expectations. The decrease in gross margin for patented drug sales resulted from inventory clearance and discounted sales of patented drugs.

Removed

The increase was mainly attributable to an increase of $3,208,093 in advertisement and promotion expenses as the Company is expanding its market, and $1.0 million increase in sales commission paid to third parties as the Company aggressively developing its patented drug retailing business in the year ended December 31, 2023.

Added

The primary reason was due to a decrease of approximately $2.4 million in advertising and promotional expenses for the year ended December 31, 2025. This decline resulted from our enhanced reputation within the healthcare industry, reduced domestic expenditures, and decreased promotional expenses for the sale of patented drugs.

Removed

The increase also contributed by the $220,905 increase in salary expenses as the Company expanded its marketing departments and had more staffs to work on marketing and selling projects and activities.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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2024 filing

2025 filing

Biggest changeOur board plays a significant role in our risk oversight. The board makes all relevant Company decisions. As such, it is important for us to have our Chief Executive Officer serve on the board as he plays key roles in the risk oversight or the Company.

Biggest changeAs such, it is important for us to have our Chief Executive Officer serve on the board as he plays key roles in the risk oversight or the Company. As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.

The term of the agreement shall expire on August 6, 2022, which term will automatically extend for additional 3-year periods unless a party to the agreement terminates it upon 1-month’ notice or proposes to re-negotiate the terms of the employment with the other party within 3 months prior to the expiration of the applicable term, or unless the employment is terminated earlier pursuant to the terms of the agreement.

He holds a bachelor degree in liberal arts from Denison University and a master degree in business administration from the Tuck School of Business at Dartmouth College. 111 Dan Li is an independent director of the Company. Ms.

He holds a bachelor degree in liberal arts from Denison University and a master degree in business administration from the Tuck School of Business at Dartmouth College. Dan Li is an independent director of the Company. Ms.

Except as otherwise disclosed in this Annual Report, no grants have been made under the plan as of the date hereof. The following is a summary of the Plan and is qualified by the full text of the Plan. Administration .

The number of Class A Ordinary Shares that may be issued under the Plan is the maximum aggregate number of Class A Ordinary Shares reserved and available pursuant to this Plan shall be the aggregate of (i) 97,088 (giving effect to the 2024 Share Consolidation) Class A Ordinary Shares and (ii) on each January 1, starting with January 1, 2020 until December 31, 2025, an additional number of shares equal to the lesser of (A) 2% of the outstanding number of Class A Ordinary Shares (on a fully-diluted basis) on the immediately preceding December 31, and (B) such lower number of Class A Ordinary Shares as may be determined by the Committee, subject in all cases to adjustment as provided in.

The number of Class A Ordinary Shares that may be issued under the Plan is the maximum aggregate number of Class A Ordinary Shares reserved and available pursuant to this Plan shall be the aggregate of (i) 12,136 (giving effect to the 2024 Share Consolidation and the 2026 Share Consolidation) Class A Ordinary Shares and (ii) on each January 1, starting with January 1, 2020 until December 31, 2025, an additional number of shares equal to the lesser of (A) 2% of the outstanding number of Class A Ordinary Shares (on a fully-diluted basis) on the immediately preceding December 31, and (B) such lower number of Class A Ordinary Shares as may be determined by the Committee, subject in all cases to adjustment as provided in.

None of our employee is represented by a labor union or covered by collective bargaining agreements. We have not experienced any work stoppages. E. Share Ownership See Item 7 below. F. Disclosure of Action to Recover Erroneously Awarded Compensation. Not applicable.

None of our employees are represented by a labor union or covered by collective bargaining agreements. We have not experienced any work stoppages. E. Share Ownership See Item 7 below. F. Disclosure of Action to Recover Erroneously Awarded Compensation. Not applicable.

Shuang Wu has agreed not to compete with us for 2 years after the termination of her employment; she also executed certain non-solicitation, confidentiality and other covenants customary for agreements of this nature. Director Compensation The directors may receive such remuneration as our board of directors may determine from time to time.

Pei Xu has agreed not to compete with us for 2 years after the termination of her employment; she also executed certain non-solicitation, confidentiality and other covenants customary for agreements of this nature. 113 Director Compensation The directors may receive such remuneration as our board of directors may determine from time to time.

Compensation Executive Compensation Summary Compensation Table The following table shows the annual compensation paid by us for the years ended 2024.

Compensation Executive Compensation Summary Compensation Table The following table shows the annual compensation paid by us for the years ended 2025.

(5) Appointed Chief Operating Officer effective as of August 2019. 112 Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire.

(2) Appointed CFO effective as of August 2019 (3) Former Chief Medical Officer (4) Former Chief Sales Officer (5) Former Chief Operating Officer 112 Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire.

General, Kevin Dean Vassily, and Dan Li is “independent” within the meaning of the NASDAQ rules. In making this determination, our board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our board deemed relevant in determining their independence.

In making this determination, our board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our board deemed relevant in determining their independence.

Employees As of the date of this Annual Report, we had a total of 111 full-time employees, of which 5 are in research and development, 19 are in sales and marketing, 74 are in technical and customer services, and 13 are in general administration.

Employees As of the date of this Annual Report, we had a total of 33 full-time employees, of which 4 are in sales and marketing, 21 are in technical and customer services, and 8 are in general administration.

Name/principal position Salary Equity Compensation All Other Compensation Total Paid Weiguang Yang/ CEO (1) $ 66,707 $ - $ - $ 66,707 Pei Xu / CFO (2) $ 45,839 $ - - $ 45,839 Xuejun Chen / Chief Medical Officer (3) $ 63,371 $ - $ - $ 63,371 Baoqian Tian / Chief Sales Officer (4) $ 83,438 $ - $ - $ 83,438 Shuang Wu / Chief Operating Officer (5) $ 31,686 $ - $ - $ 31,686 (1) Appointed Chairman and CEO effective as of August 2019.

Name/principal position Salary Equity Compensation All Other Compensation Total Paid Weiguang Yang/ CEO (1) $ 66,783 $ 5,150,000 $ - $ 5,216,783 Pei Xu / CFO (2) $ 45,913 $ - - $ 45,913 Xuejun Chen / Chief Medical Officer (3) $ 65,007 $ - $ - $ 65,007 Baoqian Tian / Chief Sales Officer (4) $ 78,598 $ - $ - $ 78,598 Shuang Wu / Chief Operating Officer (5) $ 38,312 $ - $ - $ 38,312 (1) Appointed Chairman and CEO effective as of August 2019.

The Class I Directors shall stand elected for a one year term, and the term of the current Class I Directors, consisting of Weiguang Yang and Pei Xu, expires on December 18, 2025 The Class II Directors shall stand elected for a five-year term and the term of the current Class II Directors, consisting of John C.

General, Kevin Dean Vassily, Dan Li, expires on December 18, 2026 The Class II Directors shall stand elected for a five-year term and the term of the current Class II Directors, consisting of Weiguang Yang and Pei Xu, expires on December 18, 2029.

From September 2008 to August 2013, Ms. Xu worked for Otsuka (China) Investment Co., Ltd. as a financial director. Ms. Xu holds a bachelor degree in finance from Jiangxi University of Finance and Economics. Xuejun Chen is the Chief Medical Officer of Zhongchao Inc. and Deputy General Manager of Medicine of Zhongchao Shanghai.

From September 2008 to August 2013, Ms. Xu worked for Otsuka (China) Investment Co., Ltd. as a financial director. Ms. Xu holds a bachelor degree in finance from Jiangxi University of Finance and Economics. 110 John C. General is an independent director of the Company. Mr.

Except as noted above, there are no family relationships between any of our executive officers and directors. Officers are elected by, and serve at the discretion of, the board of directors. 117 There is no formal requirement under the Company’s Amended and Restated Memorandum and Articles of Association mandating that we hold an annual meeting of our shareholders.

Officers are elected by, and serve at the discretion of, the board of directors. 117 There is no formal requirement under the Company’s Amended and Restated Memorandum and Articles of Association mandating that we hold an annual meeting of our shareholders. Our board plays a significant role in our risk oversight. The board makes all relevant Company decisions.

Each of the non-employee directors is entitled to receive annual cash compensation in the amount of $24,000, payable quarterly, and stock option to purchase certain amount of Class A Ordinary Shares under Company’s 2019 Equity Incentive Plan. On December 27, 2024, we compensated each of three independent directors, John C.

Each of the non-employee directors is entitled to receive annual cash compensation in the amount of $24,000, payable quarterly, and stock option to purchase certain amount of Class A Ordinary Shares under Company’s 2019 Equity Incentive Plan. 2025 Equity Incentive Plan (the “2025 Plan”) On August 4, 2025, the board of directors of the Company approved the adoption of the Company’s 2025 Equity Incentive Plan (the “2025 Plan”), which became effective on the same day.

None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the ability or integrity of any of our directors, director nominees or executive officers.

Li holds a bachelor degree in clinical medicine from the Medical School of North China University of Science and Technology, a master degree in hemorheology from the Medical School of Peking University, and a Ph.D. in biochemistry from the Medical School of Keio University. 111 None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the ability or integrity of any of our directors, director nominees or executive officers.

General, Kevin Dean Vassily, Dan Li, expires on December 18, 2029. A director will be removed from office automatically if, among other things, the director becomes bankrupt or makes any arrangement or composition with his creditors, or becomes physically or mentally incapable of acting as director.

A director will be removed from office automatically if, among other things, the director becomes bankrupt or makes any arrangement or composition with his creditors, or becomes physically or mentally incapable of acting as director. Except as noted above, there are no family relationships between any of our executive officers and directors.

The business address for our directors and officers is Room 2504, OOCL Tower, 841 Yan’An Middle Road, Jing’An District, Shanghai, China 200040.

The business address for our directors and officers is Room 2504, OOCL Tower, 841 Yan’An Middle Road, Jing’An District, Shanghai, China 200040. Name Age Position Weiguang Yang 43 President, Chief Executive Officer, and Chairman of the Board Pei Xu 43 Chief Financial Officer, Secretary, and Director John C.

As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters. Director Independence Our board has reviewed the independence of our directors, applying the NASDAQ independence standards. Based on this review, the board determined that each of John C.

Director Independence Our board has reviewed the independence of our directors, applying the NASDAQ independence standards. Based on this review, the board determined that each of John C. General, Kevin Dean Vassily, and Dan Li is “independent” within the meaning of the NASDAQ rules.

Removed

Name Age Position Weiguang Yang 43 President, Chief Executive Officer, and Chairman of the Board Pei Xu 43 Chief Financial Officer, Secretary, and Director Xuejun Chen 46 Chief Medical Officer Baoqian Tian 41 Chief Sales Officer Shuang Wu 41 Chief Operating Officer John C.

Added

The 2025 Plan provides for discretionary grants of, among the others, options, share appreciation right, restricted shares, restricted share units, performance units and performance shares to employees, directors and consultants of the Company.

Removed

He has been serving as our deputy general manager of medicine of Zhongchao Shanghai since March 2012, mainly responsible for designing PI and COPS courses on our MDMOOC online platform. Mr. Chen also serves as medical Director at Medwork from January 2010 to February 2012. From September 2008 to December 2009, Mr.

Added

The number of ordinary shares that may be issued under the 2025 Plan is limited to 10,000,000 ordinary shares, including both Class A Ordinary Shares and Class B Ordinary Shares, to be increased on the first trading day of each calendar year of the Company beginning on the first trading day in January 2026, by an amount equal to 2.0% of the total number of issued and outstanding ordinary shares as of the last trading day in the immediately preceding calendar year.

Removed

Chen served D&S, a Chinese public relation corporation, as medical director. Mr. Chen holds a bachelor degree in Clinical Medicine Science from Shanxi Medical University and a master degree in pharmacology from Harbin University of Commerce. 110 Baoqian Tian has been serving as our Chief Sales Officer of Zhongchao Inc. and Deputy General Manager of Sales of Zhongchao Shanghai.

Added

Notwithstanding, the aggregate maximum number of ordinary shares that may be issue under the 2025 Plan is 50,000,000 shares. The provisions of the 2025 Plan are substantially the same as those of the 2019 Plan as discussed below.

Removed

He has been serving as our deputy general manager of sales of Zhongchao Shanghai since November 2017. Prior to joining us, he served as the account director in Beijing Think Marketing Consulting Co., Ltd., a provider of advertising and consulting services to pharmaceutical enterprises from July 2010 to July 2016. From July 2007 to July 2010, Mr.

Added

As of the date hereof, an aggregate 5,000,000 ordinary shares have been issued under the 2025 Plan, without taking effect of the 2026 Share Consolidation. 2019 Equity Incentive Plan (the “2019 Plan”) We have adopted a 2019 Equity Incentive Plan (the “Plan”).

Removed

Tian worked as a project manager of China International Exhibition Center Group Corporation. Mr. Tian holds a bachelor degree in Tourism Management (Event Management) from Beijing International Studies University and a master degree in Business Administration from University of Chinese Academy of Sciences. Shuang Wu is the Chief Operating Officer of Zhongchao Inc. and Zhongchao Shanghai.

Added

The Class I Directors shall stand elected for a one year term, and the term of the current Class I Directors, consisting of John C.

Removed

She has been serving as our Chief Operating Officer of Zhongchao Shanghai since March 2012. She is also the founder of Sunshine Health Forum. Ms. Wu holds a Bachelor of Management in healthcare management from North China University of Science and Technology. John C. General is an independent director of the Company. Mr.

Removed

(2) Appointed CFO effective as of August 2019 (3) Appointed Chief Medical Officer effective as of August 2019. (4) Appointed Chief Sales Officer effective as of August 2019.

Removed

Xuejun Chen Employment Agreement On August 7, 2019, we entered into an employment agreement with Xuejun Chen pursuant to which he agreed to serve as our Chief Medical Officer. The agreement provides for an annual base salary of USD$40,016 payable in accordance with the Company’s ordinary payroll practices.

Removed

If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the agreement.

Removed

If his employment is terminated at our election without cause or by him, the Company shall provide 1-month’ advanced notice or payment of 1-month’ salary in lieu of the notice.

Removed

Xuejun Chen has agreed not to compete with us for 2 years after the termination of his employment; he also executed certain non-solicitation, confidentiality and other covenants customary for agreements of this nature. 113 Baoqian Tian Employment Agreement On August 7, 2019, we entered into an employment agreement with Baoqian Tian pursuant to which he agreed to serve as our Chief Sales Officer.

Removed

The agreement provides for an annual base salary of USD$52,195 payable in accordance with the Company’s ordinary payroll practices.

Removed

If his employment is terminated at our election without cause or by him, the Company shall provide 1-month’ advanced notice or payment of 1-month’ salary in lieu of the notice.

Removed

Baoqian Tian has agreed not to compete with us for 2 years after the termination of his employment; he also executed certain non-solicitation, confidentiality and other covenants customary for agreements of this nature.

Removed

Shuang Wu Employment Agreement On August 7, 2019, we entered into an employment agreement with Shuang Wu pursuant to which she agreed to serve as our Chief Operating Officer. The agreement provides for an annual base salary of USD$33,056 payable in accordance with the Company’s ordinary payroll practices.

Removed

If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of her salary through the date of her termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of her benefits under the agreement.

Removed

If her employment is terminated at our election without cause or by her, the Company shall provide 1-month’ advanced notice or payment of 1-month’ salary in lieu of the notice.

Removed

General, Kevin Dean Vassily, and Dan Li, 13,000 Class A Ordinary Shares for their services provided to the Company as members of the Board and the Board’s committees. 114 2019 Equity Incentive Plan (the “2019 Plan”) We have adopted a 2019 Equity Incentive Plan (the “Plan”).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

11 edited+1 added−5 removed7 unchanged

2024 filing

2025 filing

Biggest changeMajor Shareholders The following tables set forth certain information with respect to the beneficial ownership of our Class A Ordinary Shares (including Class A Ordinary Shares issuable upon the conversion of outstanding Class B Ordinary Shares) for: ● each shareholder known by us to be the beneficial owner of more than 5% of our outstanding Class A Ordinary Shares or Class B Ordinary Shares; ● each of our directors; ● each of our named executive officers; and ● all of our directors and executive officers as a group. 121 The beneficial ownership of our Class A Ordinary Shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, and includes the Class A Ordinary Shares issuable upon the conversion of the outstanding Class B Ordinary Shares and the Class A Ordinary Shares issuable pursuant to share options that are exercisable within 60 days of the date of this Annual Report.

Biggest changeThe beneficial ownership of our Class A Ordinary Shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, and includes the Class A Ordinary Shares issuable upon the conversion of the outstanding Class B Ordinary Shares and the Class A Ordinary Shares issuable pursuant to share options that are exercisable within 60 days of the date of this Annual Report.

According to our charter, each Class A Ordinary Shares entitles to 1 vote and each Class B Ordinary Share entitles to 100 votes. 122 ● Unless otherwise indicated, the business address of each of the individuals is Zhongchao, Room 2504, OOCL Tower, 841 Yan’An Middle Road, Jing’An District, Shanghai, China 200040. (1) Mr.

According to our charter, each Class A Ordinary Shares entitles to 1 vote and each Class B Ordinary Share entitles to 1,000 votes. ● Unless otherwise indicated, the business address of each of the individuals is Zhongchao, Room 2504, OOCL Tower, 841 Yan’An Middle Road, Jing’An District, Shanghai, China 200040. 122 (1) Mr.

(10) Worthy Health Limited Partnership is a limited partnership incorporated under the laws of British Virgin Islands (“Worthy Health”), the general partner of which is More Successful Group Limited, a company limited by shares incorporated under the laws of the British Virgin Islands (“More Successful”), which is controlled by Pei Xu who acts as the sole director of More Successful.

(7) Worthy Health Limited Partnership is a limited partnership incorporated under the laws of British Virgin Islands (“Worthy Health”), the general partner of which is More Successful Group Limited, a company limited by shares incorporated under the laws of the British Virgin Islands (“More Successful”), which is controlled by Pei Xu who acts as the sole director of More Successful.

For more details of the HF Warrant, see “Our Corporate History and Structure” on page 51) and 549,772 Class B Ordinary Shares outstanding as of the date of this Annual Report.

For more details of the HF Warrant, see “Our Corporate History and Structure” on page 52) and 624,972 Class B Ordinary Shares outstanding as of the date of this Annual Report.

The percentage of beneficial ownership owned is based on 24,839,131 Class A Ordinary Shares (including 135,007 Class A Ordinary Shares to be issued upon exercise of the HF Warrant the Company issued to HF Capital.

The percentage of beneficial ownership owned is based on 3,229,766 Class A Ordinary Shares (excluding Class A Ordinary Shares to be issued upon exercise of the HF Warrant the Company issued to HF Capital.

Weiguang Yang is the Chairman, Chief Executive Officer, and President of Zhongchao. Mr. Yang holds the shares through his control of More Healthy Holdings Limited. (2) Ms. Pei Xu is the Chief Financial Officer of Zhongchao. (3) Mr. Xuejun Chen is the Chief Medical Officer of Zhongchao. (4) Mr. Baoqian Tian is the Chief Sales Officer of Zhongchao. (5) Ms.

Weiguang Yang is the Chairman, Chief Executive Officer, and President of Zhongchao. Mr. Yang holds the shares through his control of More Healthy Holdings Limited. (2) Ms. Pei Xu is the Chief Financial Officer of Zhongchao. (3) Mr. John C. General is the independent director, chair of the Audit Committee, and Audit Committee financial expert of Zhongchao. (4) Ms.

Kevin Dean Vassily is the independent director and the chair of the Compensation Committee of Zhongchao. (9) More Healthy Holdings Limited is a company limited by shares incorporated under the laws of British Virgin Islands (“More Healthy”). The address of its business office is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.

Dan Li is the independent director and the chair of the Nominating Committee of Zhongchao. (5) Ms. Kevin Dean Vassily is the independent director and the chair of the Compensation Committee of Zhongchao. (6) More Healthy Holdings Limited is a company limited by shares incorporated under the laws of British Virgin Islands (“More Healthy”).

The person having voting, dispositive or investment powers over More Healthy Holdings Limited is Mr. Weiguang Yang.

The address of its business office is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The person having voting, dispositive or investment powers over More Healthy Holdings Limited is Mr. Weiguang Yang.

General (6) 15,400 * Dan Li (7) 15,400 * Kevin Dean Vassily (8) 15,400 * Worthy Health Limited Partnership (10) 256,954 * - - All directors and executive officers as a group (8 persons) 207,616 * 549,772 69.0 % 5% Holders More Healthy Holdings Limited (9) - 549,772 69.0 % CLOUDCHASER INTERNATIONAL HOLDING LIMITED (11) 1,470,000 1.8 % - - DREAM WEAVERS HOLDING LIMITED (12) 1,470,000 1.8 % - - GREEN TREES HOLDING LIMITED (13) 1,470,000 1.8 % - - ROADVENTURES HOLDING LIMITED (14) 1,470,000 1.8 % - - * Represents less than 1%. ● Represents the voting power with respect to all of our Class A Ordinary Shares and Class B Ordinary Shares, voting as a single class.

General (3) 1,925 * Dan Li (4) 1,925 * Kevin Dean Vassily (5) 1,925 * Worthy Health Limited Partnership (7) 32,120 * - - All directors and executive officers as a group (5 persons) 78,187 * 624,972 99.5 % 5% Holders More Healthy Holdings Limited (6) - 68,722 10.94 % * Represents less than 1%. ● Represents the voting power with respect to all of our Class A Ordinary Shares and Class B Ordinary Shares, voting as a single class.

Name and Address of Beneficial Owner Class A Ordinary Shares Class B Ordinary shares % of Voting % of Total Voting Shares Power Shares Power* Directors and Executive Officers Weiguang Yang (1)(9) - - 549,772 69.0 % Pei Xu (2) (10) 29,292 * - - Xuejun Chen (3) (10) 59,099 * - - Baoqian Tian (4) (10) 17,138 * - - Shuang Wu (5) (10) 55,887 * - - John C.

Class A Ordinary Shares Class B Ordinary shares % of Voting % of Total Voting Name and Address of Beneficial Owner Shares Power Shares Power* Directors and Executive Officers Weiguang Yang (1)(6) 68,750 - 624,972 99.5 % Pei Xu (2) (7) 3,662 * - - John C.

As of the date of this Annual Report, there were 25 holders of record entered in our Class A ordinary share register and 1 holder of record entered in our Class B ordinary share register.

The principal office address of Worthy Health is at Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, VG 1110, British Virgin Islands. As of the date of this Annual Report, there were 6 holders of record entered in our Class A ordinary share register and 2 holders of record entered in our Class B ordinary share register.

Removed

Shuang Wu is the Chief Operating Officer of Zhongchao. (6) Mr. John C. General is the independent director, chair of the Audit Committee, and Audit Committee financial expert of Zhongchao. (7) Ms. Dan Li is the independent director and the chair of the Nominating Committee of Zhongchao. (8) Ms.

Added

Major Shareholders The following tables set forth certain information with respect to the beneficial ownership of our Class A Ordinary Shares (including Class A Ordinary Shares issuable upon the conversion of outstanding Class B Ordinary Shares) for: ● each shareholder known by us to be the beneficial owner of more than 5% of our outstanding Class A Ordinary Shares or Class B Ordinary Shares; 121 ● each of our directors; ● each of our named executive officers; and ● all of our directors and executive officers as a group.

Removed

The principal office address of Worthy Health is at Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, VG 1110, British Virgin Islands. (11) CLOUDCHASER INTERNATIONAL HOLDING LIMITED is a British Virgin Islands company, over which the person having voting, dispositive or investment powers is Zhengbo Ma. The business address is Wickhams Cay II, Road Town, Tortola VG1110, British Virgin Islands.

Removed

(12) DREAM WEAVERS HOLDING LIMITED is a British Virgin Islands company, over which the person having voting, dispositive or investment powers over is Wei Zheng. The business address is Wickhams Cay II, Road Town, Tortola VG1110, British Virgin Islands.

Removed

(13) GREEN TREES HOLDING LIMITED is a British Virgin Islands company, over which the person having voting, dispositive or investment powers over is Xiaoyin Zheng. The business address is Wickhams Cay II, Road Town, Tortola VG1110, British Virgin Islands.

Removed

(14) ROADVENTURES HOLDING LIMITED is a British Virgin Islands company, over which the person having voting, dispositive or investment powers over is Xiaolin Wen. The business address is Wickhams Cay II, Road Town, Tortola VG1110, British Virgin Islands.

Top changes in Zhongchao Inc.'s 2025 20-F

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant's Common Equity

Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Other ZCMD 10-K year-over-year comparisons