AVAI 10-K & 10-Q changes, risk factors and insider trading

The Company does not accrue or capitalize development costs (or any costs to this effect) and expense it to its profit and loss statements as required by USaccounting GAAP.principles generally accepted in the United States of America (“U.S. GAAP”). As such, the Company incurred a net loss of $1,749,509 for the ayear ended March 31, 2026 and net loss of $1,142,115 for the year ended March 31, 2025 and net loss of $2,128,475 for the year ended March 31, 2024.2025. If we incur additional significant operating losses, our stock price, may decline, perhaps significantly. Our management is developing plans to alleviate the negative trends and conditions described above. Our business plan is speculative and unproven. There is no assurance that we will be successful in executing our business plan or that even if we successfully implement our business plan, that we will be able to curtail our losses now or in the future. Further, as we are an emerging enterprise, we expect that net losses will continue, and our working capital deficiency will increase.

Our Common Stock is currently quoted on the OTC Market Group’s OTC QB marketplace under the ticker symbol “AVAI”. The OTC is a regulated quotation service that displays real-time real-time quotes and last sale prices in over-the-counter securities. Trading in shares quoted on the OTC QB is often thin and characterized by by volatility. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume and market conditions. As a result, there may be wide fluctuations in the market price of the shares of our Common Stock for reasons unrelated to operating performance, and this volatility, when it occurs, may have a negative effect on the market price for our securities. Moreover, the OTC QB is not a stock exchange, and trading of securities on this platform is more sporadic than the trading of securities listed on a national quotation system or stock exchange. Accordingly, our stockholders may not be able to realize a fair price from their shares when they determine to sell them or may have to hold them for a substantial period of time until the market for our Common Stock improves.

Avai Bio, Inc. (f/k/a Avant Technologies Inc. and Trend Innovations Holding Inc.) is a technology company specializing in acquiring, creating, and developing innovative and advanced technologies utilizing artificial intelligence (AI) as well as providing a host of information technology consulting services. The Company considers itself a native expert in the field of information technology based on artificial intelligence. Recently, the Company acquired Avant! AI and InstantFAME as well as the assets of Wired4Health, Inc., pertaining to certain technology assets providing full-stack software development, database management, data integration, project management and cloud services resources. Utilize its latest assets acquisitions, Avant mission is to provide innovative and effective AI solutions that transform businesses and positively impact society. Avant strive to push the boundaries of AI technology and empower organizations to achieve their full potential. We believe that our technology can provide a self-sustained system that prepares its data from unlabeled information (Unsupervised Clustering), and then analyzes it using various, proprietary, supervised learning techniques, Improved data efficiency: Unsupervised learning pre-processes and extracts meaningful features from raw or unlabeled data, preparing them as inputs for the supervised learning model. This improves data efficiency and preparations. Our technology deployed over the acquired assets (in sum or as a whole) potentially provides True Learning from Experience - Unsupervised learning is utilized to learn relevant information from many source domains. This knowledge is then evaluated and applied to a related or different domain(s), where information might be in short supply. This feature is a true learning capability. Avant! can leverage the knowledge learned from the source domain to improve performance in the other domains, as well as Factual discovery/conclusion by learning data - Avant! Unsupervised learning techniques, like clustering, help identify groups or patterns in the data, reaching conclusions. Then its supervised learning mechanism can create new datasets (information), which are used for further domains, improving classification and regression tasks. This feature is a true reasoning mechanism.

Total operating expenses for the years ended March 31, 20252026 and 20242025, were $1,532,792$1,480,191 and $2,117,182.$1,532,792. The operating expenses for the year ended March 31, 20252026 included $26,070 in amortization and depreciation expenses; $258,410 in consulting services; $792,265 in general and administrative expenses; $290,551 in marketing expenses; $97,895 in professional fees; and $15,000 in research and development expenses. The operating expenses for the year ended March 31, 2025, included $74,320 in amortization and depreciation expenses; $517,739 in consulting services; $762,478 in general and administrative expenses; $85,164 in marketing expenses; $77,399 in professional fees; $857 in rent expense; and $14,835 in website expenses. The operating expenses for the year ended March 31, 2024 included $76,953 in amortization and depreciation expenses; $502,978 in consulting services; $1,424,334 in general and administrative expenses; $30,143 in marketing expenses; $62,847 in professional fees; $1,467 in rent expense and $18,460 in website expenses. Total operating expenses for 20252026 decreased by 28%,3%, or $584,390,$52,601, primarily due to lower employeeconsulting and contractor compensationservices, which are included in general and administrative expenses.amortization.

Total other income for the years ended March 31, 20252026 and 20242025, were $450,000$0 and $0,$450,000, respectively. Other income included debt forgiveness. Total other income for 20252026 increaseddecreased by 100% because there was no similar income lastthis year.

Total other expenses for the years ended March 31, 20252026 and 20242025, were $59,323$269,318 and $11,293,$59,323, respectively. Other expenses included interest and discount on convertible notes.notes ($104,400 and $47,775 for the years ended March 31, 2026 and 2025, respectively); interest on convertible notes ($140,000 and $11,548 for the years ended March 31, 2026 and 2025, respectively); and interest on loan from related parties ($24,918 and $0 for the years ended March 31, 2026 and 2025, respectively). Total other expenses for 20252026 increased by 425%,354%, or $48,030,$209,995, primarily due to thea higher issuancenumber of more convertible notes than lastthis year.

Our net losses for the fiscal years ended March 31, 20252026 and 20242025, were $1,142,115$1,749,509 and $2,128,475.$1,142,115. Net losses for 20252026 decreasedincreased by 46%,53%, or $986,360.$607,394. The main impact on the decreaseincrease in in net loss was the decreaseincrease in operating expenses and other incomeexpenses as described above.

During the fiscal years ended March 31, 20252026 and 2024,2025, net cash flows used in operating activities was $(1,160,6101,009,844) and $(1,322,3181,160,610), respectively. Cash flows used in operating activities for 20252026 increased by $161,708$150,766 compared to 2024.2025. This increase was primarily driven by aan decreaseincrease in net loss and prepaidaccounts expensespayable compared to the previous year.

For the fiscal years ended March 31, 20252026 and 2024,2025, netthe cashCompany flowshad used inno investing activities was $0 and $(149,000), respectively. Investing activities used $0 of cash in 2025 compared with $149,000 in 2024.activities.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the FV of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented and its current on all its tax filings federal and state.presented.

The Company does not accrue or capitalize development costs (or any costs to this effect) and expense it to its profit and loss statements as required by US GAAP. As such, the Company incurred a net loss of $1,494,332$552,041 for the ninethree months ended DecemberJune 31,30, 2025,2026, and $1,142,115$1,749,509 for the year ended March 31, 2025.2026. If we incur additional significant operating losses, our stock price, may decline, perhaps significantly. Our management is developing plans to alleviate the negative trends and conditions described above. Our business plan is speculative and unproven. There is no assurance that we will be successful in executing our business plan or that even if we successfully implement our business plan, that we will be able to curtail our losses now or in the future. Further, as we are an emerging enterprise, we expect that net losses will continue, and our working capital deficiency will increase.

The Company had a stockholders’ deficit of $2,794,486$3,222,566 and an accumulated deficit of $5,612,842$6,420,060 as of DecemberJune 31,30, 2025.2026.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our brand and operating results could be harmed. We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement. For example, for the ninethree months ended DecemberJune 31,30, 2025,2026, and year ended March 31, 2025,2026, we reported that our disclosure controls and procedures were not effective due to the lack of resources and the reliance on outside consultants. We intend to increase management’s review of our financials. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

In this Quarterly report, references to “AVANT” “AVAI” “TREND”, “TREN”, or “the Company,” or “we,” or “us,” and “our” refer to AvaíAvai Bio, Inc. (f/k/a Avant Technologies Inc. and Trend Innovations Holding Inc.). Except for the historical information contained herein, some of the statements in this report contain forward-looking statements that that involve risks and uncertainties. These statements are found in the sections entitled “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures about Market Risk.” They include statements concerning: our business strategy; expectations of market and customer response; liquidity and capital expenditures; future sources of revenues; expansion of our proposed product line; and trends in industry activity generally. In some cases, you can identify forward-looking statements by words such as “may,” “will,” “should,” “expect,” “plan,” “could,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including, but not limited to, the risks outlined under “Risk Factors,” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. For example, assumptions that could cause actual results to vary materially from future results include, but are not limited to our ability to successfully develop and market our products to customers; our ability to generate customer demand for our products in our target markets; the development of our target markets and market opportunities; our ability to manufacture suitable products at a competitive cost; market pricing for our products and for competing products; the extent of increasing competition; technological developments in our target markets and the development of alternate, competing technologies in them; and sales of shares by existing shareholders. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

This section of the report should be read together with Footnotes of the Company audited financials for the year ended March 31, 2025,2026, the unaudited statements of operations for the ninethree months ended DecemberJune 31,30, 20252026 and 20242025 are compared in the sections below.

AvaíAvai Bio, Inc. (f/k/a Avant Avant Technologies Inc. and Trend Innovations Holding Inc.) is a technology company specializing in acquiring, creating, and developing innovative and advanced technologies utilizing artificial intelligence (AI) as well as providing a host of information technology consulting services. The Company considers itself a native expert in the field of information technology based on artificial intelligence. The Company’s key acquisitions include Avant! AI and a Joint Venture and License Agreement (the “License Agreement”) with Ainnova Tech Inc. These acquisitions provide the Company with resources in full-stack software development, database management, data integration, project management, and cloud services.

On June 28, 2019, the Company acquired Thy News LLC, an owner of a news application with feed from various sources that users can choose and customize. It is available for free download in Apple AppStore and Google Play Market. Users also will be able to subscribe for additional paid features that extend the functionality of the original app. At the moment of the first release, the app’s news database consisted of 24,000 processed news sources, and as of December 31, 2019 this amount increased for more 75,000 processed sources to a total of 99,000 processed sources. From January 1, 2020 to September 30, 2023 the Company acquired additional 50,000 processed sources. As of DecemberJune 31,30, 2025,2026, the usersCompany had ofsold the app have an opportunity to choose interesting and relevantno newslonger feedsowns fromor 149,000operates processed sources.it.

On September 9, 2024, Avant Technologies Inc.the Company entered into a Cancellation Agreement with Wired4Health, Inc. ("W4H"), a Florida corporation, mutually agreeing to terminate the Asset Purchase Agreement ("APA") dated April 5, 2024, between the two parties. The APA, originally executed on April 5, 2024, between Avant and Wired4Health, pertained to the acquisition of certain technology assets, including agreements with Sentry Data Systems/Craneware, Respec, Inc., and other intellectual property rights related to Wired4Health's business operations. In consideration for the acquisition, Avant had agreed to pay Wired4Health $2,200,000, partially through a secured promissory note and preferred stock. As of September 9, 2024, both parties agreed to cancel and nullify the original APA under the following terms:

Results of Operations for the three months ended DecemberJune 31,30, 20252026 and 20242025:

For the three months ended DecemberJune 31,30, 20252026 and 20242025, the Company did not generate any revenue.

Total operating expenses for the three months ended DecemberJune 31,30, 2026 and 2025 and 2024 were $509,774$419,783 and $428,898.$487,589. The operating expenses for the three months ended DecemberJune 31,30, 2025,2026, included $6,517 $5,244 in amortization expenses; $60,000$105,000 in consulting services; $190,119$176,480 in general and administrative expenses; $185,000 in laboratory services; $55,050$100,750 in marketing expenses; and $13,088$32,309 in professional fees. The operating expenses for the three months ended DecemberJune 31, 202430, 2025, included $19,517 $6,518 in amortization and depreciation expenses; $138,000$64,910 in consulting services; $259,974$213,886 in general and administrative expenses; $2,436 $154,190 in marketing expenses; $8,844and $48,085 in professional fees and $127 in rent expense.fees. Total operating expenses for three months ended DecemberJune 30, 2026, 31, 2025, compared the three months ended DecemberJune 31,30, 2024,2025, increaseddecreased by 19%,14%, or $80,876,$67,806, primarily due to laboratorya servicesreduction in marketing expenses and increasedprofessional marketing expenses.fees.

Other Income (Expenses)

The total other expenses for the three months ended DecemberJune 31,30, 2026 and 2025 and 2024 were $43,953$132,258 and $23,400,$0, respectively. Other expenses included interest ($43,330) and discount ($47,100) on convertible notes; notes. interest on loan payable ($17,285); and loss on disposal of subsidiary ($24,543). Total other expenses for the three months ended DecemberJune 31,30, 2025,2026, compared the three months ended December 31,June 2024,30, 2025, increased by 88%,100%, or $20,553.$132,258. The Thisother increaseexpenses wasincreased primarilyin duethe tocurrent aperiod higherbecause numberthere ofwere convertibleno notessimilar thisexpenses in the prior year.

Net Income (Loss)

The net loss for the three months ended DecemberJune 31,30, 2026 and 2025 was $552,041 and 2024 was $553,727 and $452,298,$487,589, accordingly. Net losses for three months ended DecemberJune 31,30, 2025,2026, compared the three months ended June December30, 31, 2024,2025, increased by 22%,13%, or $101,429.$64,452. The main impact on the increase in net loss was the increase in operatingother and other expenses as described above.

As of DecemberJune 31,30, 20252026 and March 31, 2025,2026, the Company Company had cash of $50,402$83,586 and $81,053,$23,145, respectively. The Company had a working capital deficit of $2,906,546$3,860,035 and $1,695,484$3,298,511 as of DecemberJune 30, 2026, 31, 2025, and March 31, 2025,2026, respectively.

As of MarchJune 31,30, 2025,2026, our total assets were $224,745$791,750 comprised of $93,133$154,281 in current assets; $131,612$158,898 in intangible assets; $478,571 in due from subsidiaries; and our total liabilities were $1,788,617. $4,014,316.

Stockholders’ deficit increased from $1,563,872$2,815,155 as of March 31, 20252026 to $2,794,486$3,222,566 as of DecemberJune 31,30, 2025.2026.

During the ninethree months ended DecemberJune 31,30, 20252026 and 2025, 2024, net cash flows used in operating activities was $(959,017414,258) and $(973,110240,343), respectively. Cash flows used in operating activities for ninethree months ended June 30, 2026, compared the three months ended DecemberJune 31,30, 2025, compared the nine months ended December 31, 2024, increaseddecreased by $14,093.$173,915. This increasedecrease was primarily driven by a decrease in net loss and amortization; and an increase in accounts payable compared to the previous year.