Scienture Holdings Inc

Previous wording

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” and “Trxade”, refer specifically to TRxADE HEALTH, INC. and its consolidated subsidiaries. References to “Q1”, “Q2”, “Q3”, and “Q4” refer to the first, second, third, and fourth quarter, respectively, of the applicable year. Unless otherwise stated or the context otherwise requires, comparisons from one period to another are to the same period of the prior fiscal year.

Current wording

Unless the context requires otherwise, references to the “Company,” “we,” “us,” and “our” refer specifically to Scienture Holdings, Inc., formerly TRxADE HEALTH, INC., and its consolidated subsidiaries. References to “Q1”, “Q2”, “Q3”, and “Q4” refer to the first, second, third, and fourth quarter, respectively, of the applicable year. Unless otherwise stated or the context otherwise requires, comparisons from one period to another are to the same period of the prior fiscal year.

Previous wording

Integra Pharma Solutions, LLC (“IPS” d.b.a. Trxade Prime), is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products to customers. IPS customers include all healthcare markets including government organizations, hospitals, clinics and independent pharmacies nationwide.

Current wording

On October 4, 2024, the Company and Softell entered into IPS Assignment Agreement, pursuant to which the Company transferred, and Softell accepted, 100% of the membership interests of IPS. As a result, IPS is now a wholly-owned subsidiary of Softell. During the year ended December 31, 2023 and a portion of the quarter ended March 31, 2024, Softell, operated a web-based market platform that enabled commerce among healthcare buyers and sellers of pharmaceuticals, accessories and services. Softell’s current primary operations are conducted through IPS. IPS is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products to customers. IPS’ customers include all healthcare markets including government organizations, hospitals, clinics and independent pharmacies nationwide.

Previous wording

Bonum Health, LLC (“Bonum Health”), was formed to hold certain telehealth assets acquired in October 2019. The “Bonum Health Hub” was launched in February 2020; however, the Company does not anticipate installations moving forward. The Company is in the process of dissolving Bonum Health, Inc. and Bonum Health, LLC and expects those entities are each to be dissolved shortly after the date of this Quarterly Report. The Company has begun the process to administratively dissolve Bonum Health.

Current wording

Bonum Health, LLC was formed to hold certain telehealth assets acquired in October 2019. The “Bonum Health Hub” was launched in February 2020; however, the Company does not anticipate installations moving forward. The Company anticipates dissolving Bonum Health, Inc. and Bonum Health, LLC.

Previous wording

Scienture is a New York based, pre-revenue pharmaceutical research company. The Scienture team is a highly experienced team of industry professionals who are passionate about developing unique specialty product concepts and solutions that bring enhanced value to patients and healthcare systems. Scienture’s assets in development are across therapeutics areas, indications and cater to different market segments. Scienture’s mission is to identify, develop and bring to market innovative technology-based products to address unmet medical needs. It’s targeted portfolio consists of short term and long-term opportunities with efficient development, regulatory, and go to market strategies.

Current wording

Scienture is a New York based branded, specialty pharmaceutical research company which is engaged in the research and development of branded pharmaceutical products. The intellectual property application process was initiated in November 2019 and the product development activities commenced in January 2020. Scienture also plans to foray into commercialization of innovative and branded pharmaceutical products in the US market. Scienture’s assets in development are across therapeutics areas and indications and cater to different market segments. Scienture’s mission is to identify, develop and bring to market innovative technology-based products to address unmet medical needs. Its targeted portfolio consists of short term and long-term opportunities with efficient development, regulatory, and go to market strategies.

Previous wording

On July 31, 2023 , the Company completed its acquisition of Superlatus in accordance with the terms and conditions of the Merger Agreement (the “Superlatus Merger”), pursuant to which the Company acquired Superlatus by way of a merger of the Merger Sub with and into Superlatus, with Superlatus being a wholly owned subsidiary of the Company and the surviving entity in the Superlatus Merger.

Current wording

On July 14, 2023, the Company entered into the Superlatus Merger Agreement with Superlatus and Merger Sub. On July 31, 2023, the Company completed its acquisition of Superlatus in accordance with the terms and conditions of the Superlatus Merger Agreement, pursuant to which the Company acquired Superlatus by way of a merger of the Merger Sub with and into Superlatus, with Superlatus being a wholly owned subsidiary of the Company and the surviving entity in the Superlatus Merger.

Previous wording

Not all of the closing conditions of the Merger Agreement were met. As a result, the Company entered into Amendment No. 1 to the Amended and Restated Agreement and Plan of Merger (the “Amendment”) on January 8, 2024. Under the terms of the Amendment, the merger consideration to the shareholders of Superlatus was adjusted to the aggregate of 136,441 shares of common stock of the Company, representing 19.99% of the total issued and outstanding common stock of the Company after the consummation of the Superlatus Merger and 15,759 shares of Company’s Series B Preferred Stock, with a conversion ratio of 100 shares of Series B Preferred Stock to one share of common stock. At Closing, the value of the common stock was $7.30 per share, resulting in a total value of $12,500,089. Additionally, the shareholders of Superlatus agreed to surrender back to the Company 291,096 shares of the Company’s Series B Preferred Stock. As described below, in March 2024 the Company divested its entire interest in Superlatus.

Current wording

Not all of the closing conditions of the Superlatus Merger Agreement were met. As a result, the Company entered into Amendment No. 1 to the Superlatus Amendment on January 8, 2024. Under the terms of the Superlatus Amendment, the merger consideration to the shareholders of Superlatus was adjusted to an aggregate of 136,441 shares of the Company’s common stock and 15,759 shares of the Company’s Series B Preferred Stock, resulting in a total value of $12,500,089. Additionally, the shareholders of Superlatus agreed to surrender back to the Company 291,096 shares of the Company’s Series B Preferred Stock. As described below, in March 2024, the Company divested of its interest in Superlatus.

Previous wording

On July 25, 2024, the Company entered into and closed an Agreement and Plan of Merger (the “Scienture Merger Agreement”) with MEDS Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub I”), MEDS Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), and Scienture, Inc., a Delaware corporation (“Scienture”). Pursuant to the Merger Agreement, (i) Merger Sub I merged with and into Scienture (the “First Merger”), with Scienture continuing as the surviving entity and a wholly owned subsidiary of the Company, and (ii) Scienture merged with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub II continuing as the surviving entity. In connection with the transactions, the Company will change its name from “TRxADE HEALTH, INC.” to “Scienture Holdings, Inc.” and Merger Sub II, as the surviving entity of the Mergers, will change its name from “MEDS Merger Sub II, LLC” to “Scienture LLC”. Scienture is a pharmaceutical company based in Commack, New York, and focuses on developing unique specialty product concepts and solutions that bring enhanced value to patients and healthcare systems. Scienture is in the process of developing various assets across therapeutics areas, indications and cater to different market segments.

Current wording

On July 25, 2024, the Company entered into and closed the Scienture Merger Agreement with Merger Sub I, Merger Sub II, and Scienture. Pursuant to the Scienture Merger Agreement, (i) Merger Sub I merged with and into Scienture, with Scienture continuing as the surviving entity and a wholly owned subsidiary of the Company, and (ii) Scienture merged with and into Merger Sub II, with Merger Sub II continuing as the surviving entity. In connection with the transactions, the Company changed its name to “Scienture Holdings, Inc.” and Merger Sub II, as the surviving entity of the Second Merger, changed its name to “Scienture, LLC”.

Previous wording

On July 25, 2024, the Company completed its acquisition of Scienture. As consideration for the Mergers, at the effective time of the First Merger (the “First Effective Time”), the shares of Scienture common stock issued and outstanding immediately prior to the First Effective Time were converted into the right to receive, in the aggregate, (i) 291,555 shares of the Company’s common stock which represents 19.99% of the number of shares of common stock issued and outstanding immediately prior to the effective time of the First Merger, and (ii) 6,826,713 shares of the Company’s Series X Non-Voting Convertible Preferred Stock.

Current wording

As consideration for the Scienture Merger, at the Effective Time, the shares of Scienture common stock issued and outstanding immediately prior to the Effective Time were converted into the right to receive, in the aggregate, (i) 291,536 shares of the Company’s common stock and (ii) 6,826,753 shares of the Company’s Series X Preferred Stock, each share of which is convertible into one share of common stock.

Previous wording

On February 16, 2024, the Company, together with Trxade, Inc., and Micro Merchant Systems, Inc. (“MMS”) entered into an asset purchase agreement (the “APA”) under which MMS agreed to purchase for cash substantially all of the assets of Trxade, Inc. On February 16, 2024, the parties consummated the closing of the transactions contemplated by the APA. Trxade, Inc. operated a web-based market platform designed to enable trading among healthcare buyers and sellers of pharmaceuticals, accessories and services. The purchase price paid at closing was $22,660,182. Pursuant to the terms and conditions of the APA, because MMS received $1,600,000 or greater in certain collections from third parties resulting from any products or services sold, or provided, by the business assets and operations acquired from Trxade, Inc. during the period ending on the four-month anniversary of the closing date, Trxade, Inc. was due an additional $7,500,000 payment from MMS. The Company received the $7,500,000 milestone payment in May 2024.

Current wording

On February 16, 2024, the Company, together with Softell and MMS entered into the MMS APA, under which MMS agreed to purchase for cash substantially all of the assets of Softell. On February 16, 2024, the parties consummated the closing of the transactions contemplated by the MMS APA. Softell operated a web-based market platform designed to enable trading among healthcare buyers and sellers of pharmaceuticals, accessories and services. The purchase price paid at closing was $22,660,182. Pursuant to the terms and conditions of the MMS APA, because MMS received $1,600,000 or greater in certain collections from third parties resulting from any products or services sold, or provided, by the business assets and operations acquired from Softell during the period ending on the four-month anniversary of the closing date, the Company was due an additional $7,500,000 payment from MMS. The Company received the $7,500,000 in May 2024.

Previous wording

On March 5, 2024, the Company entered in a Stock Purchase Agreement (“SPA”) with Superlatus Foods Inc. (the “Buyer”). Pursuant to the SPA, the Company sold all of the issued and outstanding stock of Superlatus Inc., to the Buyer. The $1.00 purchase price for the stock was delivered to the Company at the closing, which occurred simultaneously with the execution of the SPA. As a result of the transaction Superlatus ceased to be a subsidiary of the Company, and the rights and assets of Superlatus together with various liabilities and obligations that were specific to Superlatus became rights and obligations of Buyer.

Current wording

On March 5, 2024, the Company entered into the Superlatus SPA with the Buyer. Pursuant to the Superlatus SPA, the Company sold all of the issued and outstanding stock of Superlatus to the Buyer. The $1.00 purchase price for the stock was delivered to the Company at the closing, which occurred simultaneously with the execution of the Superlatus SPA. As a result of the transaction, Superlatus ceased to be a subsidiary of the Company, and the rights and assets of Superlatus together with various liabilities and obligations that were specific to Superlatus became rights and obligations of the Buyer.

Previous wording

Cash was $7,719,993 as of June 30, 2024, compared to $314 as of December 31, 2023. The increase in cash was primarily due to the proceeds in February 2024 and May 2024 related to the disposition of certain assets of Trxade Inc. to MMS as described above. We expect that our future available capital resources will consist primarily of cash generated from operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.

Current wording

Cash was $579,103 as of September 30, 2024, compared to $314 as of December 31, 2023. The increase in cash was primarily due to the proceeds in February 2024 and May 2024 related to the disposition of certain assets to MMS as described above. We expect that our future available capital resources will consist primarily of cash generated from operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.

Previous wording

The increase in cash as of June 30, 2024, compared to December 31, 2023, was primarily due to the proceeds received in February 2024 and May 2024 resulting from the disposition of assets of Trxade Inc. to MMS as described above.

Current wording

The increase in cash as of September 30, 2024, compared to December 31, 2023, was primarily due to the proceeds received in February 2024 and May 2024 resulting from the disposition of assets to MMS as described above.

Previous wording

On March 6, 2024, the Company announced the declaration of a special cash dividend of eight dollars ($8.00) per share of common stock, payable to stockholders of record as of March 18, 2024, with the dividend being paid on March 22, 2024. The special dividend of $12,671,072 was paid using a portion of the proceeds from the closing of the sale of the Company’s Trxade assets.

Current wording

On March 6, 2024, the Company announced the declaration of a special cash dividend of eight dollars ($8.00) per share of common stock, payable to stockholders of record as of March 18, 2024, with the dividend being paid on March 22, 2024. The special dividend of $12,671,072 was paid using a portion of the proceeds from the closing of the sale of certain assets.

Previous wording

On July 9, 2024, the Company announced the declaration of a special cash dividend of one dollar and fifty cents ($1.50) per share of common stock, payable to stockholders of record as of July 19, 2024, with the dividend being paid on or about July 24, 2024. The special dividend was $2,187,759 paid using a portion of the proceeds received in May 2024 in connection with the February 2024 sale of the Trxade Inc.’s web-based market platform assets.

Current wording

On July 9, 2024, the Company announced the declaration of a special cash dividend of one dollar and fifty cents ($1.50) per share of common stock, payable to stockholders of record as of July 19, 2024, with the dividend being paid on July 22, 2024. The special dividend was $2,187,759 paid using a portion of the proceeds received in May 2024 in connection with the February 2024 sale of certain assets.

Previous wording

Our primary objectives for the remainder of 2024 are expected to be the integration of Scienture’s assets and operations into our company and the continued implementation of their business plan as well as the continued development and operational expansions on our Trxade Prime platform, and to complete potential strategic transactions of our business-to-consumer subsidiaries, which may include a potential sale, spin-off, fund raising, combination or other strategic transaction, and also include the winding down of such entities. There can be no assurance that our operations will generate significant positive cash flow, or that additional funds will be available to us, through borrowings or otherwise, on favorable terms if required in the future, or at all. We may also raise additional funding in the future through the sale of equity.

Current wording

Our primary objectives for the remainder of 2024 are expected to be the continued implementation of Scienture’s business plan, marketing the IPS business, and to complete potential strategic transactions of our business-to-consumer subsidiaries, which may include a potential sale, spin-off, fund raising, combination or other strategic transaction, and also include the winding down of such entities. There can be no assurance that our operations will generate significant positive cash flow, or that additional funds will be available to us, through borrowings or otherwise, on favorable terms if required in the future, or at all. We may also raise additional funding in the future through the sale of equity.

Previous wording

We may require additional funding in the future to implement on our business plan and potentially to expand or complete acquisitions. The sources of this capital are expected to be equity investments and notes payable. Our plan for the next twelve months is to continue using the same marketing and management strategies to promote our Integra Pharma Solutions assets and operations, exploring strategic transactions involving our corporate assets, while also seeking to expand our and Scienture operations organically or through acquisitions, as funding and opportunities arise. In the event we require additional funding, we plan to raise that through the sale of debt or equity, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders. If we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.

Current wording

We may require additional funding in the future to implement on our business plan and potentially to expand or complete acquisitions. The sources of this capital are expected to be equity investments and notes payable. Our plan for the next twelve months is to integrate Scienture and its research and development activities, continue using the same marketing and management strategies to promote our IPS assets and operations, exploring strategic transactions involving our corporate assets, while also seeking to expand our operations organically or through acquisitions, as funding and opportunities arise. In the event we require additional funding, we plan to raise that through the sale of debt or equity, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders. If we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.

Previous wording

Cash used in operations for the six months ended June 30, 2024, was $5,967,718, compared to cash used in operations for the six months ended June 30, 2023, of $602,965. The increase in cash used in operations for the six months ended June 30, 2024 compared to June 30, 2023, was mainly due to our net loss and cash used in operating assets and liabilities in 2024.

Current wording

Cash used in operating activities for the nine months ended September 30, 2024, was $11,355,826, compared to cash used in operations for the nine months ended September 30, 2023, of $1,206,077. The increase in cash used in operations for the nine months ended September 30, 2024 compared to September 30, 2023, was mainly due to our net loss and cash used in operating assets and liabilities in the 2024 period.

Previous wording

Cash provided by investing activities for the six months ended June 30, 2024, was $27,431,815 and cash provided by investing activities was $281,394 for the six months ended June 30, 2023. The increase in cash provided by investing activities is related to the disposition of Trxade, Inc. and Superlatus, Inc., partially offset by investment in securities of $2,500,000.

Current wording

Cash provided by investing activities for the nine months ended September 30, 2024, was $27,552,791 and cash provided by investing activities was $74,283 for the nine months ended September 30, 2023. The increase in cash provided by investing activities in the 2024 period was primarily due to the MMS disposition in the first quarter, partially offset by the investment in securities of $2,500,000.

Previous wording

There are $18,699 in revenues for the three months ended June 30, 2024. Revenues decreased by $347,827, compared to the same period ended June 30, 2023 primarily because of the disposition of the assets and operations of Trxade, Inc. completed in February 2024 which resulted in the Company having fewer revenue generating operations when compared to the comparable period in 2023.

Current wording

There were $64,861 in revenues for the three months ended September 30, 2024. Revenues decreased by $327,425, compared to the same period ended September 30, 2023 primarily because of the disposition of the assets and operations of Softell completed in February 2024 which resulted in the Company having fewer revenue generating operations when compared to the comparable period in 2023.

Previous wording

For the three-month period ended June 30, 2024, cost of goods sold and gross (loss) profit were $19,402 and $(703), and $299,387 and $67,139, all respectively for the same period in 2023. Gross profit as a percentage of sales was (3.76)% for the three months ended June 30, 2024, compared to 18.32% for the three months ended June 30, 2023.

Current wording

For the three-month period ended September 30, 2024, cost of goods sold and gross (loss) profit were $60,978 and $3,883, and $352,694 and $39,592, all respectively for the same period in 2023. Gross profit as a percentage of sales was 5.99% for the three months ended September 30, 2024, compared to 10.09% for the three months ended September 30, 2023.

Previous wording

Wages and salary expense increased by $155,749 for the three months ended June 30, 2024 to $312,049 compared to $156,300 for the comparable period in 2023. The increase is primarily due to increase in salary of COO and CEO of IPS during the three months ended June 30, 2024 as compared to the same period in 2023.

Current wording

Wages and salary expense increased by $701,635 for the three months ended September 30, 2024 to $708,977 compared to $7,342 for the comparable period in 2023. The increase is primarily due to an increase in salary of the COO and CEO of IPS, as well as the Scienture Merger in July 2024, as compared to the same period in 2023.

Previous wording

Professional fees increased by $364,392 to $688,689 compared to $324,297 for the comparable period in 2023. The increase was primarily due to increase in Board members’ fees and consulting expense.

Current wording

Professional fees increased by $297,867 to $593,364 compared to $295,497 for the comparable period in 2023. The increase was primarily due to increase in board members’ fees and consulting expense and post-acquisition professional fees expense of Scienture.

Previous wording

Accounting and legal expenses increased by $46,909 for the three months ended June 30, 2024 to $171,708 compared to $124,799 for the comparable period in 2023. The increase is primarily due to more in amount of legal services during the three months ended June 30, 2024 as compared to the same period in 2023.

Current wording

Accounting and legal expenses increased by $209,747 for the three months ended September 30, 2024 to $619,227 compared to $409,480 for the comparable period in 2023. The increase is primarily due to increased legal services during the three months ended September 30, 2024 as compared to the same period in 2023.

Previous wording

General and administrative expenses (including stock-based compensation expense) increased by $245,521 for the three months ended June 30, 2024, to $415,421 compared to $169,900 for the comparable period in 2023. The increase was mainly due to increase in tax salt expense.

Current wording

General and administrative expenses (including stock-based compensation expense) increased by $101,769 for the three months ended September 30, 2024, to $168,649 compared to $66,880 for the comparable period in 2023. The increase was mainly due to increase in headcount in connection with our acquisition of Scienture’s operations in July 2024.

Previous wording

Technology expense increased $59,095 for the three months ended June 30, 2024 to $86,674 compared to $27,579 for the comparable period in 2023. The increase was mainly due to increased software expense and software support expense.

Current wording

Technology expense increased $135,403 for the three months ended September 30, 2024 to $157,474 compared to $22,071 for the comparable period in 2023. The increase was mainly due to increased software expense and software support expense.

Previous wording

We had interest expense of $4,949 for the three months ended June 30, 2024, compared to interest expense of $180,734 for the three months ended June 30, 2023. The decrease is due to the sale of note payable of Superlatus, Inc. consequent to sale of its equity interest in Superlatus to Superlatus Foods, Inc. thereby transferring all assets and liabilities.

Current wording

We had interest expense of $217,433 for the three months ended September 30, 2024, compared to interest expense of $251,778 for the three months ended September 30, 2023. The decrease is due to the sale of note payable of Superlatus subsequent to the sale of the Company’s equity interest in Superlatus to Superlatus Foods, Inc. thereby transferring all assets and liabilities, and partially offset by interest expense of $43,200 deemed incurred in full on the date of issue of convertible note of $360,000 and amortization of debt discount.

Previous wording

We recognized a loss on the change in the fair value of the warrant liability of $165,132 for the three months ended June 30, 2024, compared to a loss of $1,448,519 during the three months ended June 30, 2023.

Current wording

We recognized a gain on the change in the fair value of the warrant liability of $502,178 for the three months ended September 30, 2024, compared to a gain of $925,320 during the three months ended September 30, 2023, based on the underlying valuation inputs.

Previous wording

During the six months ended June 30, 2024, the Company incurred a net loss from continuing operations of $8,258,162 compared to a net loss from continuing operations of $3,340,976 for the six months ended June 30, 2023. The increase in net loss is mainly driven by stock compensation in 2024.

Current wording

During the three months ended September 30, 2024, the Company incurred a net loss from continuing operations of $2,783,601 compared to a net loss from continuing operations of $88,136 for the three months ended September 30, 2023. The increase in net loss is mainly driven by the integration of Scienture upon its merger in July 2024.

Previous wording

There are $18,699 in revenues for the six months ended June 30, 2024. Revenues decreased by $824,183, compared to the same period ended June 30, 2023 primarily because of the disposition of the assets and operations of Trxade, Inc. completed in February 2024 which resulted in the Company having fewer revenue generating operations when compared to the comparable period in 2023.

Current wording

There were $83,560 in revenues for the nine months ended September 30, 2024. Revenues decreased by $1,151,608, compared to the same period ended September 30, 2023 primarily because of the disposition of the assets and operations of Softell completed in February 2024 which resulted in the Company having fewer revenue generating operations when compared to the comparable period in 2023.

Previous wording

For the six-month period ended June 30, 2024, cost of goods sold and gross (loss) profit were $19,402 and $(703), and $719,484 and $123,398, all respectively for the same period in 2023. Gross profit as a percentage of sales was (3.76)% for the six months ended June 30, 2024, compared to 14.64% for the six months ended June 30, 2023.

Current wording

For the nine-month period ended September 30, 2024, cost of goods sold and gross (loss) profit were $80,380 and $3,180, and $1,072,178 and $162,990, all respectively for the same period in 2023. Gross profit as a percentage of sales was 3.81% for the nine months ended September 30, 2024, compared to 13.20% for the nine months ended September 30, 2023.

Previous wording

Wages and salary expense increased by $196,751 for the six months ended June 30, 2024 to $534,644 compared to $337,893 for the comparable period in 2023. The increase is primarily due to increase in salary of COO and CEO of IPS during the six months ended June 30, 2024 as compared to the same period in 2023.

Current wording

Wages and salary expense increased by $898,386 for the nine months ended September 30, 2024 to $1,243,621 compared to $345,235 for the comparable period in 2023. The increase is primarily due to an increase in salary of the COO and CEO of IPS, as well as the Scienture Merger in July 2024, as compared to the same period in 2023.

Previous wording

Professional fees increased by $320,793 to $509,136 compared to $188,343 for the comparable period in 2023. The increase was primarily due to increase in Board members’ fees and consulting expense.

Current wording

Professional fees increased by $662,259 to $1,282,053 compared to $619,794 for the comparable period in 2023. The increase was primarily due to increase in Board members’ fees and consulting expense and post acquisition professional fees of Scienture.

Previous wording

Accounting and legal expenses increased by $137,740 for the six months ended June 30, 2024 to $510,755 compared to $373,015 for the comparable period in 2023. The increase is primarily due to increase in amount of legal services during the six months ended June 30, 2024 as compared to the same period in 2023.

Current wording

Accounting and legal expenses increased by $347,487 for the nine months ended September 30, 2024 to $1,129,982 compared to $782,495 for the comparable period in 2023. The increase is primarily due to increased legal services during the nine months ended September 30, 2024 as compared to the same period in 2023.

Previous wording

General and administrative expenses (including stock-based compensation expense) increased by $4,699,088 for the six months ended June 30, 2024, to $5,115,582 compared to $416,494 for the comparable period in 2023. The increase was mainly due to shares issued for services at fair value of $4,450,919 and increase in tax salt expense.

Current wording

General and administrative expenses (including stock-based compensation expense) increased by $4,800,857 for the nine months ended September 30, 2024, to $5,284,231 compared to $483,374 for the comparable period in 2023. The increase was mainly due to shares issued for services at fair value of $4,450,919.

Previous wording

Technology expense increased by $85,414 for the six months ended June 30, 2024 to $138,289 compared to $52,875 for the comparable period in 2023. The increase was mainly due to increased software expense and software support expense.

Current wording

Technology expense increased by $220,817 for the nine months ended September 30, 2024 to $295,763 compared to $74,946 for the comparable period in 2023. The increase was mainly due to increased software expense and software support expense.

Previous wording

We had interest expense of $103,464 for the six months ended June 30, 2024, compared to interest expense of $243,126 for the six months ended June 30, 2023. The decrease is due to the sale of note payable of Superlatus, Inc. consequent to sale of its equity interest in Superlatus to Superlatus Foods, Inc. thereby transferring all assets and liabilities.

Current wording

We had interest expense of $320,897 for the nine months ended September 30, 2024, compared to interest expense of $494,904 for the nine months ended September 30, 2023. The decrease is due to the sale of note payable of Superlatus subsequent to the sale of the Company’s equity interest in Superlatus to Superlatus Foods, Inc. thereby transferring all assets and liabilities, and partially offset by interest expense of $43,200 deemed incurred in full on the date of issue of convertible note of $360,000 and amortization of debt discount.

Previous wording

We recognized a loss on the change in the fair value of the warrant liability of $895,021 for the six months ended June 30, 2024, compared to a loss of $1,368,628 during the six months ended June 30, 2023.

Current wording

We recognized a loss on the change in the fair value of the warrant liability of $392,843 for the nine months ended September 30, 2024, compared to a loss of $443,308 during the nine months ended September 30, 2023, based on the underlying valuation inputs.

Previous wording

During the three months ended June 30, 2024, the Company incurred a net loss from continuing operations of $1,624,741 compared to a net loss from continuing operations of $2,229,035 for the three months ended June 30, 2023. The decrease in net loss is mainly driven by lower loss on change in fair value of warrant liability in 2024.

Current wording

During the nine months ended September 30, 2024, the Company incurred a net loss from continuing operations of $11,041,764 compared to a net loss from continuing operations of $3,429,112 for the nine months ended September 30, 2023. The increase in net loss is mainly driven by stock compensation in 2024, as well as the integration of Scienture upon its merger in July 2024.

Previous wording

Net income from discontinued operations increased by $26,982,149 to a net income of $27,670,294 for the six months ended June 30, 2024, compared to a net income from discontinued operations of $688,145 for the six months ended June 30, 2023. The increase was primarily due to the disposal of Trxade, Inc., partially offset by loss on disposal of Superlatus, Inc. during the six months ended June 30, 2024.

Current wording

Net income from discontinued operations increased by $30,419,127 to a net income of $27,670,294 for the nine months ended September 30, 2024, compared to a net loss from discontinued operations of $2,748,833 for the nine months ended September 30, 2023. The increase was primarily due to the disposal of Softell assets, partially offset by loss on disposal of Superlatus during the nine months ended September 30, 2024.

Previous wording

Integra Pharma Solutions, LLC (“IPS”) is a licensed wholesaler of brand, generic and non-drug products to Customers. Integra LLC takes orders for products, creates invoices for each order and recognizes revenue at the time the Customer receives the product. Customer returns are not material. Step One: Identify the contract with the Customer – Integra LLC requires that an application and a credit card for payment be completed by the Customer prior to the first order. Each transaction is evidenced by an order form sent by the Customer and an invoice for the product is sent by Integra LLC. The collection is probable based on the application and credit card information provided prior to the first order. Step Two: Identify the performance obligations in the contract – Each order is distinct and evidenced by the shipping order and invoice. Step Three: Determine the transaction price – The consideration is variable if product is returned. The variability is determined based on the return policy of the product manufacturer. There are no sales or volume discounts. The transaction price is determined at the time of the order evidenced by the invoice. Step Four: Allocate the transaction price – There is no difference between contract price and “stand-alone selling price”. Step Five: Recognize revenue when or as the entity satisfies a performance obligation – The Revenue is recognized when the Customer receives the product.

Current wording

IPS is a licensed wholesaler of brand, generic and non-drug products to Customers. IPS takes orders for products, creates invoices for each order and recognizes revenue at the time the Customer receives the product. Customer returns are not material. Step One: Identify the contract with the Customer – IPS requires that an application and a credit card for payment be completed by the Customer prior to the first order. Each transaction is evidenced by an order form sent by the Customer and an invoice for the product is sent by IPS. The collection is probable based on the application and credit card information provided prior to the first order. Step Two: Identify the performance obligations in the contract – Each order is distinct and evidenced by the shipping order and invoice. Step Three: Determine the transaction price – The consideration is variable if product is returned. The variability is determined based on the return policy of the product manufacturer. There are no sales or volume discounts. The transaction price is determined at the time of the order evidenced by the invoice. Step Four: Allocate the transaction price – There is no difference between contract price and “stand-alone selling price”. Step Five: Recognize revenue when or as the entity satisfies a performance obligation – The Revenue is recognized when the Customer receives the product.