Scienture Holdings, Inc.

Condensed Consolidated Balance Sheets

As of September 30, 2025 and December 31, 2024

Condensed Consolidated Statements Of Operations

For the Three and Nine Months Ended September 30, 2025 and 2024

Condensed Consolidated Statements of Changes in Stockholders’ Equity

The accompanying notes are an integral part of the unaudited consolidated financial statements

Condensed Consolidated Statements of Cash Flows

For The Nine Months Ended September 30, 2025 and 2024

NOTE 1 –ORGANIZATION AND BASIS OF PRESENTATION

Overview

On September 20, 2024, changed its legal name from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.” As of September 30, 2025, the Company owned all equity interests of Bonum Health, LLC and Scienture, LLC (f/k/a Scienture, Inc.) (“Scienture”). Scienture was acquired in July 2024.

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. On April 30, 2025, the Company completed the sale of Bonum Health, LLC in the near future.

Scienture 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.

The Company previously owned all equity interests in Softell Inc. (f/k/a Trxade Inc.) (“Softell”), Softell’s wholly owned subsidiary, Integra Pharma Solutions, LLC (“IPS”), and Bonum Health, Inc. As described below, these subsidiaries were disposed of during the three months ending June 30, 2025.

On October 4, 2024, the Company and Softell entered into an Assignment and Assumption of Membership Interests (the “IPS Assignment Agreement”), pursuant to which the Company transferred, and Softell accepted,100% of the membership interests of IPS. As a result, IPS became 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. IPS is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products to customers. IPS’ customers range across healthcare markets including government organizations, hospitals, clinics and independent pharmacies nationwide.

Bonum Health, Inc. was formed to provide an overall healthcare experience comparable to a primary care practitioner, and an online portal as a personal electronic medical record and scheduling system was available on a subscription basis, primarily as a stand-alone telehealth software application that could be licensed on a business-to-business (B2B) model to clients as an employment health benefit for the clients’ employees.

On April 8, 2025, Softell entered into a Membership Interest Purchase Agreement (the “IPS MIPA”) with Tollo Health, LLC (“Tollo”), pursuant to which Tollo agreed to purchase and the Company agreed to sell all of the Company’s membership interests in IPS.

On April 8, 2025, the Company also entered into a Stock Purchase Agreement (the “Bonum and Softell SPA” and together with the IPS MIPA, the “Agreements) with Tollo, pursuant to which Tollo agreed to purchase and the Company agreed to sell all issued and outstanding shares of common stock of Bonum Health, Inc. and Softell. Suren Ajjarapu, the Company’s former Chief Executive Officer, and Prashant Patel, the Company’s former President and Chief Operating Officer, each had a beneficial interest in Tollo at the time the Company entered into the each of the Agreements.

In connection with each of the Agreements, the Company agreed to retain certain excluded liabilities of IPS, Softell and Bonum Health, Inc. including all liabilities: (i) related to, in connection with or arising out of any claims, charges, complaints, actions, suits, settlements, hearings, investigations, proceedings, or governmental or regulatory inquiries with respect to IPS, Softell or Bonum Health, Inc., respectively, prior to the closing under the applicable Agreement; (ii) related to, in connection with or arising out of any breach by the Company of the applicable Agreement or any other agreements and documents required to be delivered by the Company; (iii) not disclosed by the Company in accordance with each Agreement; (iv) related to any actions threatened or initiated by a governmental entity against IPS, Softell, or Bonum Health, Inc., respectively; and (v) related to tax returns or tax matters of the Company, IPS , Softell, or Bonum Health, Inc., respectively, for any periods prior to closing under the applicable Agreement.

As consideration for acquiring IPS, Softell, and Bonum Health, Inc., Tollo paid the Company $5 million, and delivered the consideration in the form of a promissory note bearing interest at the prime rate. The promissory note matures on June 30, 2030, and a balloon payment is due on or before that date. However, Tollo is required to pay 20% of the proceeds of a future equity financing toward repayment of the principal and accrued but unpaid interest owed under the promissory note. On June 24, 2025, the promissory note was assigned by Tollo to Integral Health, Inc., which (at the time of the assignment) was owned by Suren Ajjarapu, the Company’s former Chief Executive Officer, and Prashant Patel, the Company’s former President and Chief Operating Officer as of September 30, 2025.

On April 30, 2025, the Company completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo in exchange for the $5,000,000 promissory note bearing generally described above. In connection with the transaction, the Company recorded a $5,000,000 promissory note receivable, and derecognized subsidiaries’ accounts payable of $117,162, other receivables of $4,219,239, operating lease right-of-use assets of $142,138, operating lease liability of $158,687 and a related party note receivable of $1,300,000. As such, the Company recognized a loss on disposition of $385,528.

The divestitures are part of a broader strategic realignment at the Company designed to sharpen operational focus and unlock long-term value. It is aligned with the Company’s commitment to streamline its core operations, optimize its portfolio, and accelerate growth in the Branded and Specialty Pharma markets. The Company intends to use the proceeds obtained from the divestment to facilitate the high-growth commercial and strategic product development activities at its Scienture subsidiary.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules of the SEC and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 26, 2025.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended December 31, 2024, as reported in the Company’s Annual Report on Form 10-K have been omitted.

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from its estimates. Significant estimates for the nine months ended September 30, 2025 and 2024 include the valuation of intangible assets, including goodwill, and gain (losses) on dispositions.

Revision of Previously Issued Financial Statements for Correction of Immaterial Errors

During the three months ended September 30, 2025, the Company identified and corrected an immaterial error impacting additional paid-in capital, debt, and related other expense originally recorded in the first and second quarters of 2025. Specifically, $1.6 million of debt repayment proceeds were incorrectly netted against equity in the first quarter of 2025, resulting in an understatement of stockholders’ equity and an overstatement of liabilities. The related income statement impact included a $0.2 million understatement of net loss in the first quarter and a $0.4 million overstatement of net loss in YTD Q2. The cumulative correction to both the condensed consolidated balance sheets and statements of operations was recorded in the current period. As of September 30, 2025, the related debt was fully repaid.

Management assessed the materiality of the error on both a quantitative and qualitative basis, in accordance with SEC Staff Accounting Bulletin No. 99,Materiality, codified in ASC Topic 250,Accounting Changes and Error Corrections. Management concluded that the error and related impacts did not result in a material misstatement of the Company’s previously issued interim financial statements for the three months ended March 31, 2025, or the three and six months ended June 30, 2025.

Fair Value of Financial Instruments

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

The carrying amounts for cash, accounts receivable, accounts payable, accrued liabilities, and other current liabilities approximate their fair value because of their short-term maturity. The Company’s notes payables approximate the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.

The Company’s derivative liability is a Level 3 liability measured at fair value on a recurring basis (see Note 8).

Concentration of Credit Risks and Major Customers

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corporation limits. During the three and nine months ended September 30, 2025 and 2024, two customers accounted for 96.39% of revenue.

Accounts Receivable, net

Accounts receivable represent amounts due from wholesale distributors for the sale of pharmaceutical products. These receivables are recorded at the invoiced amount, net of estimated variable consideration including rebates, chargebacks, discounts, and other gross-to-net sales adjustments, consistent with the Company’s revenue recognition policy.

Payment terms are generally net 90 days from the date of invoice. The Company monitors the creditworthiness of its customers and evaluates the collectability of outstanding receivables on an ongoing basis. The Company estimates expected credit losses on trade receivables in accordance with ASC 326 using an allowance for credit losses (“ACL”). The ACL reflects management’s estimate of lifetime expected credit losses based on historical loss experience, current conditions, and reasonable and supportable forecasts. Trade receivables are pooled by similar risk characteristics. Balances are written off when deemed uncollectible, and recoveries are recorded when received. The Company monitors credit risk primarily through aging and customer-specific evaluations.

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method and includes the purchase price, inbound freight, and other costs directly attributable to the acquisition of finished goods.

Inventories primarily consist of finished pharmaceutical products held for sale. The Company regularly evaluates inventory for obsolescence and slow-moving items and records a reserve, if necessary, to write down inventories to their estimated net realizable value. Factors considered in the valuation include current market conditions, historical sales trends, product expiration dates, and projected demand.

Inventory write-downs are recorded as a component of cost of goods sold and are not reversed if the market value of the inventory subsequently increases.

Deferred Offering Costs

The Company complies with the requirements of Accounting Standards Codification (“ASC”) 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed. As of September 30, 2025, the Company has capitalized $0 in deferred offering costs. During the nine months ended September 30, 2025, $1,089,386 of deferred offering costs, including $534,800 capitalized as of December 31, 2024, were charged to additional paid-in capital upon the Company’s equity offering.

The Company accounts for acquisitions and investments in businesses as business combinations if the target meets the definition of a business and (a) the target is a variable interest entity and the Company is the target’s primary beneficiary, and therefore the Company must consolidate its financial statements, or (b) the Company acquires more than 50% of the voting interest of the target and it was not previously consolidated. The Company records business combinations using the acquisition method of accounting, which requires all the assets acquired and liabilities assumed to be recorded at fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill.

The application of the acquisition method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets that are depreciated and amortized from goodwill. The fair value assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. Significant assumptions and estimates include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset, if applicable.

If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the Company’s financial statements may be exposed to potential impairment of the intangible assets and goodwill.

If the Company’s investment involves the acquisition of an asset or group of assets that does not meet the definition of a business, the transaction is accounted for as an asset acquisition. An asset acquisition is recorded at cost, which includes capitalizing transaction costs, and does not result in the recognition of goodwill.

On July 25, 2024, the Company acquired intangible assets of $76,400,000 and recognized goodwill of $21,372,960 pursuant to the Scienture acquisition (see Note 3). The acquired goodwill represents the value in excess of the net assets and liabilities acquired at the acquisition date.

Goodwill

Goodwill is an asset representing the excess cost over the fair market value of net assets acquired in business combinations. In accordance with Intangibles - Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis when indicators of potential impairment exist. Goodwill is tested for impairment at the reporting unit level. The Company’s reporting units discrete financial information is available and management regularly reviews the operating results. For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the reporting structure.

The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

The Company also has the option to proceed directly to the quantitative test. Under the quantitative impairment test, the estimated fair value of each reporting unit is compared to its carrying value, including goodwill. If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated to that reporting unit. Management can resume the qualitative assessment in any subsequent period for any reporting unit.

As of September 30, 2025, management performed a qualitative impairment assessment of our reporting units, of which there were no indications that it was more likely than not that the fair value of our reporting units were less than their respective carrying values. As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized during the three and nine months ended September 30, 2025 and 2024.

Intangible Assets

In connection with the Scienture acquisition, the Company identified product technologies assets. The product technologies represent a broad range of novel product candidates including new potential treatments for hypertension, migraine, pain and thrombosis and other related disorders. Each of the product technologies are in various phases of development and had not achieved regulatory approval as of the valuation date.

The product technologies are 505(b)(2) products and represent modifications and new delivery methods of already approved drugs (rather than novel drug compounds/formulations/treatments which require significant regulatory approvals and testing). These assets should be amortized over their expected remaining economic life. The product technology assets will remain unamortized, subject to potential impairment testing, until the assets are placed in service, which is when commercialization of the product commences. At that point, the assets will be amortized over their expected remaining life (likely a period of 15-20 years based on the patent lives).

Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

The Company did not record an impairment charge for the three and nine months ended September 30, 2025 and 2024.

Stock-Based Compensation

The Company accounts for stock-based compensation to employees in accordance with ASC 718, “Compensation-Stock Compensation.” ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. Stock option forfeitures are recognized at the date of employee termination. Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2018-07 for the accounting of share-based payments granted to non-employees for goods and services.

Leases

The Company accounts for its leases under ASC 842, “Leases.” Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred.

In calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term.

Research & Development Expenses

Research and development costs are expensed in the period incurred in accordance with ASC 730, “Research and Development.” These expenses consist of independent contractor costs, costs for outsourced analytical research and development activities, batch manufacturing cost and, advisory costs as a part of research, market research costs and other regulatory consulting costs.

Income (loss) Per Common Share

Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted net income per common share is computed similar to basic net income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The dilutive effect of the Company’s options and warrants is computed using the treasury stock method. As of September 30, 2025, we had 177,536 outstanding warrants and 20,676 stock options, each exercisable for shares of common stock, as well as 15,759 shares of Series B Preferred Stock outstanding.

The following table sets forth the computation of basic and diluted loss per share:

Income Taxes

The Company’s provision for income taxes was $0 for the three and nine months ended September 30, 2025 and 2024. The income tax provisions for these periods are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which the Company operates. For all periods presented, the Company utilized net operating loss carryforwards to offset the impact of any taxable income. The Company’s tax rate differs from the applicable statutory rates due primarily to the establishment of a valuation allowance, utilization of deferred and the effect of permanent differences and adjustments.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03,Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to disclose in tabular format the nature of certain expenses that are included in specific income statement line items. The objective of the standard is to provide greater transparency into the types of costs incurred by an entity, particularly in areas such as cost of revenue and selling, general, and administrative expenses. The ASU requires disaggregation of relevant expense captions by natural classification, including amounts for inventory purchases, employee compensation, depreciation and intangible asset amortization. are also required to disclose total selling expenses and define what is included in that category.

The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted. The standard must be applied on a prospective basis, with retrospective application permitted as an option.

The Company is currently evaluating the impact of this standard on its disclosures and anticipates it will result in additional footnote disclosures, but does not expect the adoption to have a material impact on its consolidated financial position, results of operations, or cash flows.

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

NOTE 2 –GOING CONCERN

The accompanying interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update No. 2014-15, “Presentation of Financial Statements - Going Concern” (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

As of September 30, 2025, the Company had an accumulated deficit of $52,430,904. As of September 30, 2025, the Company had $355,692 in cash.

The Company will need to raise additional capital or secure debt funding to support on-going operations, and to fund the operations of any businesses or assets we acquire. The sources of this capital are expected to be the sale of equity and debt, 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, our financial position, and liquidity. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Unless management is able to obtain additional financing, it is unlikely that the Company will be able to meet its funding requirements during the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 –ACQUISITIONS AND DISPOSITIONS

Scienture, Inc.

The Company evaluated the Agreement and Plan of Merger, dated July 25, 2024, by and among the Company, MEDS Merger Sub I, Inc., MEDS Merger Sub II, LLC, and Scienture (the “Scienture Merger Agreement*”)* pursuant to ASC 805 and ASU 2017-01, Topic 805, “Business Combinations.” The Company first determined that Scienture met the definition of a business as it includes inputs and a substantive process that together significantly contribute to the ability to create outputs. Scienture’s results of operations are included in the Company’s consolidated financial statements from the date of acquisition. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition. The purchase price allocation is preliminary and could be significantly revised as a result of additional information obtained regarding assets acquired and liabilities assumed and revisions of estimates of fair values of tangible assets and related deferred tax assets and liabilities. The Company will finalize its valuation and the allocation of the purchase price, along with required retrospective adjustments, if any, within a year following the acquisition date.

On July 25, 2024, the parties consummated the mergers contemplated by the Scienture Merger Agreement (together, the “Scienture Merger”) and the Company issued 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock at the closing. The aggregate fair value of the purchase price consideration was $78,646,184. The fair value was determined by the underlying stock price of the common stock on the date of the Scienture Merger, which was $11.63 per share, which was utilized for both the issuance of common and preferred stock after evaluating the terms of the Series X Preferred Stock. The Company also applied a discount for lack of marketability of 5% due to certain lock-up terms on the shares issued.

The following summarizes the purchase price consideration and the preliminary purchase price allocation as of the acquisition date:

Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the Company’s financial results as if the Scienture Merger had occurred as of January 1, 2024. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company’s future financial results. The pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

Dispositions and Divestitures

Refer to Note 1 for further detail on the disposition of the Company’s legacy subsidiaries.

MMS APA

On February 16, 2024, the Company, together with Softell and Micro Merchant Systems, Inc. (“MMS”), entered into an asset purchase agreement (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. The purchase price paid at closing was $22,660,182. 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 payment in May 2024.

The MMS APA was accounted for a business disposition in accordance with ASC 810-40-40-3A. As of February 16, 2024, the Company no longer consolidated the assets, liabilities, revenues and expenses of Softell. The components of the disposition are as follows:

The gain on disposition of business of $29,685,946 was included in income from discontinued operations, net of tax in the consolidated statements of operations of the year ended December 31, 2024.

Superlatus SPA

On March 5, 2024, the Company entered into a Stock Purchase Agreement with Superlatus Inc. (the “Superlatus SPA*”)*. Pursuant to the Superlatus SPA, the Company sold all of the issued and outstanding stock of Superlatus Inc. to Superlatus Foods Inc. (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 Inc. 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 Inc. became rights and obligations of the Buyer.

The transaction was accounted for a business disposition in accordance with ASC 810-40-40-3A. As of March 5, 2024, the Company no longer consolidated the assets, liabilities, revenues and expenses of Superlatus Inc. The components of the disposition are as follows:

The loss of disposition of business of $2,083,742 was included in income from discontinued operations, net of tax in the consolidated statements of operations of the year ended December 31, 2024.

See Notes 1 and 4 for detailed discussion.

Discontinued Operations

In accordance with the provisions of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing operations in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024. The results of the discontinued operations for the three and nine months ended September 30, 2025 and 2024 consist of the following:

In the second quarter of 2024, the Company determined to dissolve Bonum Health, Inc. and Bonum Health, LLC, and have presented the results of operations in net income (loss) from discontinued operations.

NOTE 4-RELATED PARTY TRANSACTIONS

Wellgistics Health and Tollo Health

On November 21, 2023, but effective September 14, 2023, the Company issued a promissory note (the “Wellgistics Note”) to Wellgistics Health, Inc. (f/k/a Danam Health Inc.) (“Wellgistics”) in the amount of $300,000. The Company prepaid $250,000 prior to the execution date. The Wellgistics Note did not accrue interest. As of December 31, 2023, the balance of the Wellgistics Note was $50,000. The Wellgistics Note was fully paid off in February 2024.

As of March 31, 2025, other receivables included a $3,828,769 receivable from Wellgistics and $215,000 receivable from Tollo. The receivables were unsecured, non-interest bearing and due on demand. The receivables were maintained by the Company’s former IPS subsidiary, which was sold to Tollo as of April 30, 2025.

On April 30, 2025, the Company completed the sale of its subsidiaries, IPS, Softell, and Bonum Health, Inc. to Tollo in exchange for a $5,000,000 promissory note bearing interest at the prime rate and maturing on June 30, 2030. The note requires Tollo to repay 20% of any future equity financing proceeds toward the outstanding balance. In connection with the transaction, the Company recorded a $5,000,000 promissory note receivable, and derecognized subsidiaries’ accounts payable of $117,162, other receivables of $4,219,239, operating lease right-of-use assets of $142,138, operating lease liability of $158,687 and a related party note receivable of $1,300,000. As such, the Company recognized a loss on disposition of $385,528. On June 24, 2025, the promissory note was assigned by Tollo to Integral Health, Inc. In August 2025, Integral Health, including its subsidiary IPS, were acquired by third parties. Therefore, at September 30, 2025, Integral Health and Tollo was no longer considered a related party. As of September 30, 2025, the note receivable was outstanding and the Company recognized $62,500 in interest income, which was reclassified from note receivable, related party to note receivable on the consolidated balance sheet.

See Note 6 for detail on the note receivable from Wood Sage, LLC.

Suren Ajjarapu, the Company’s former Chief Executive Officer, and Prashant Patel, the Company’s former President and Chief Operating Officer, each had a beneficial interest in Tollo as of June 30, 2025. In August 2025, Integral Health, including its subsidiary IPS, were acquired by third parties. Therefore, at September 30, 2025, Integral Health and Tollo was no longer considered a related party.

Scienture

In July 2024, the executives of Scienture issued short-term loans to Scienture for an aggregate amount of $265,000. The loans are unsecured, interest bearing at the minimum applicable federal rate per annum, and due on demand. The loans were still outstanding as of September 30, 2025, and fully repaid in October 2025.

In November 2024, an executive of Scienture issued a short-term loan to Scienture for $150,000. The loan is unsecured, interest bearing at the minimum applicable federal rate per annum, and due on demand. The loan was outstanding as of September 30, 2025, and fully repaid in October 2025.

In February 2025, an executive of Scienture issued a short-term loan to Scienture for $100,000. The loan is unsecured, interest bearing at the minimum applicable federal rate per annum, and due on demand. The loans were outstanding as of September 30, 2025, and fully repaid in October 2025.

In February 2025, an executive of Scienture issued a short-term loan to Scienture for $16,000. The loan is unsecured, interest bearing at the minimum applicable federal rate per annum, and due on demand. The loan was outstanding as of September 30, 2025, and fully repaid in October 2025.

NOTE 5 –REVENUE RECOGNITION

The Company derives revenue from one primary source—product revenue. Product revenue consists of pharmaceutical products sold via wholesale distribution channels. The Company recognizes revenue when control of the pharmaceutical products is transferred to wholesale distributors, which generally occurs upon delivery to the customer. Revenue is measured based on the transaction price specified in the contract, net of estimated gross-to-net adjustments, including rebates, chargebacks, discounts, and other sales allowances.

These estimates are based on historical experience, current contractual terms, and other relevant factors, and are updated at each reporting period to reflect changes in circumstances. Any adjustments to these estimates are recognized in the period in which such changes become known.

Revenues for the three months ended June 30, 2025 and 2024 were $590,050 and $64,861, respectively. Revenues for the nine months ended September 30, 2025 and 2024 were $600,308 and $83,560, respectively.

NOTE 6 –NOTES RECEIVABLE – RELATED PARTY

On August 22, 2023, the Company received a Promissory Note (the “Wood Sage Note”) in the amount of $1,300,000 from Wood Sage, LLC. The Wood Sage Note bears no interest and is currently due and payable. As of September 30, 2025 and December 31, 2024, the outstanding balance of the Wood Sage Note was $0 and $1,300,000, respectively. The note was held by Softell, a former subsidiary of the Company.

On April 30, 2025, the Company completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo in exchange for a $5,000,000 promissory note bearing interest at the prime rate and maturing on June 30, 2030 (see Notes 1 and 4). In August 2025, Integral Health, including its subsidiary IPS, were acquired by third parties. Therefore, at September 30, 2025, Integral Health and Tollo was no longer considered a related party, which was reclassified from note receivable, related party to note receivable on the consolidated balance sheet.

NOTE 7 –GOODWILL AND INTANGIBLE ASSETS

In connection with the Scienture Merger on July 25, 2024, the Company recorded goodwill of $21,372,960 and intangible assets of $76,400,000.

The purchase price allocation of intangible assets was evaluated under ASC 805. The identified intangible assets were determined to be product technologies, and were valued accordingly by each product candidate:

The fair value of the product technologies was determined by the Income Approach: Multi-Period Excess Earnings Methods (“MPEEM”). The MPEEM measures economic benefits by calculating the cash flows attributable to an asset after deducting appropriate returns for contributory assets used by the business in generating the asset’s revenue and earnings. The MPEEM utilized revenue and cash flow projections through 2030 based on each product candidate’s phase of development. Key assumptions include a 2% long-term revenue growth rate and 3% contributory asset charge rate. The Company discounted the expected future cash flows at a 53.0% rate of return, equal to the weighted-average cost of capital plus 10%, to reflect the risk of the cash flows related to the product technologies. The Company then summed the present values of the estimated future cash flows and included an amortization tax benefit to the value indication of each of the product technologies.

As of September 30, 2025, the Company has not begun amortizing any of the product technology intangible assets.

NOTE 8 –CONVERTIBLE DEBT AND NOTES PAYABLE

Convertible Debenture – Arena

On November 22, 2024, the Company entered into a Securities Purchase Agreement (the “Arena SPA”) with the Arena Finance Markets, LP (“Arena Finance”), Arena Special Opportunities Partners III, LP (together with Arena Finance, the “Arena Investors”). Under the Securities Purchase Agreement, the Company will issue 10% original issue discount one or more secured convertible debentures (“Debentures”) in a total principal amount of up to $12,222,222, divided into up to three separate tranches that are each subject to certain closing conditions. The conversion price per share of each Debenture is equal to 92.5% of the lowest daily VWAP (as defined in the Debentures) of the Company’s shares of common stock during the five trading day period ending on the trading day immediately prior to delivery or deemed delivery of the applicable conversion notice, subject to adjustments related to the trading price of the Company’s common stock.

The closing of the first tranche was consummated on November 25, 2024 (the “First Closing”) and the Company issued to the Arena Investors Debentures in an aggregate principal amount of $3,333,333 (the “First Closing Debentures”). The First Closing Debentures were sold to the Arena Investors for a purchase price of $3,000,000, representing an original issue discount of ten percent (10%). The convertible debenture will mature eighteen months from the First Closing.

The First Closing Debentures contain customary events of default. If an event of default occurs, until it is cured, the holder may increase the interest rate applicable to the First Closing Debentures to two percent (2%) per annum and accelerate the full indebtedness under the First Closing Debentures, in an amount equal to 125% of the outstanding principal amount and accrued and unpaid interest. Subject to limited exceptions , the First Closing Debentures prohibit the Company and, as applicable, its subsidiaries from incurring any new indebtedness that is not subordinated to the First Closing Debentures and, as applicable, any subsidiary’s obligations in respect of the First Closing Debentures until the First Closing Debentures are paid in full.

As consideration for the Arena Investors’ consummation of the First Closing, concurrently with the First Closing, the Company issued to each Arena Investor participating in the First Closing its pro rata portion of the 55,000 shares of common stock (the “SPA Commitment Fee Shares”) issued to the Arena Investors as a commitment fee upon the execution of the Securities Purchase Agreement. Furthermore, as consideration for the Arena Investors’ consummation of subsequent closings, the Company shall issue to the Arena Investors participating in such closing a certain number of Company common stock as agreed upon among the Company and the Arena Investors participating. The fair value of the shares of common stock issued was $420,200, which was included as a debt discount as noted below.

Pursuant to a Security Agreement, dated November 25, 2024, the Company granted to the Arena Investors a security interest in all of its assets to secure the prompt payment, performance, and discharge in full of all of the Company’s obligations under the Debentures. In addition, the Company’s wholly-owned subsidiary, Scienture, entered into a Guarantee Agreement, dated November 25, 2024, with the Arena Investors, pursuant to which it agreed to guarantee the prompt payment.

Interest accrues on the outstanding principal amount of this Debenture at a rate equal to 10.00% per annum paid in kind (the “PIK Interest”) unless there is an Event of Default (as defined in the Debenture), in which case Default Interest accrues and is payable instead of PIK Interest. Any PIK Interest is added to the outstanding principal amount of the Debenture on a monthly basis as additional principal obligations hereunder and shall automatically and thereafter constitute a part of the outstanding principal amount for all purposes hereof (including the accrual of interest thereon at the rates applicable to the principal amount generally). The Company will not issue additional debentures to satisfy and pay any PIK Interest. Interest is calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and accrues daily commencing on the Original Issue Date (as defined in the Debenture) until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.

During the three and nine months ended September 30, 2025, the Company accrued $17,478 and $141,977, respectively, in interest expense pertaining to the First Closing Debentures.

As a result of the issuance of the First Closing Debentures, the Company recognized an aggregate debt discount of $3,333,333. Through December 31, 2024, $869,692 of the debt discount was amortized to interest expense. In February 2025, the Company repaid $1,642,143 of principal and accrued interest. In August and September 2025, the Company repaid aggregate of $1,866,501 of the remaining outstanding principal and accrued interest, including a 20% early redemption premium, resulting in the immediate amortization of all remaining unamortized debt discount of $925,179 and $2,721,058 to interest expense during the three and nine months ended September 30, 2025, respectively. The outstanding amount owed on the First Closing Debentures was converted during October 2025. As a result, the First Closing Debentures are no longer outstanding (see Note 15).

The following is a summary of the First Closing Debentures:

Derivative Liability

The Company evaluated the terms of the conversion features of the First Closing Debentures as noted above in accordance with ASC Topic No. 815 - 40, “Derivatives and Hedging - Contracts in Entity’s Own Stock,” and determined they are not indexed to the Company’s common stock and that the conversion feature, which is akin to a redemption feature, meet the definition of a liability. The First Closing Debentures contain an indeterminate number of shares to settle with conversion options outside of the Company’s control. Therefore, the Company bifurcated the conversion feature and accounted for it as a separate derivative liability. Upon issuance of the First Closing Debentures, the Company recognized a derivative liability at a fair value of $2,477,217, which is recorded as a debt discount and will be amortized over the life of the First Closing Debentures. Upon repayment of the debentures in 2025, the remaining unamortized debt discount was fully amortized to interest expense.

The Company measured the derivative liability at fair value based on significant inputs not observable in the market, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the derivative liability uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value of the contingent consideration liability related to updated assumptions and estimates are recognized within the statements of operations.

The Company valued the derivative liability using a Black-Scholes method using following assumptions:

The following is a summary of the derivative liability:

Scienture Convertible Debt

In September 2023, Scienture entered into a Loan and Security Agreement (the “NVK Loan Agreement”) with NVK Finance, LLC, a Nebraska Limited Liability Company (“NVK”) for $2,000,000. The debt accrues interest at a per annum rate equal to the Prime Rate (as defined in the NVK Loan Agreement) plus 7% and the prime rate is adjusted quarterly. As of both September 30, 2025 and December 31, 2024, the interest rate was 15.50%. The debt is collateralized by all of Scienture’s receivables, cash and cash equivalents and its right, title and interest in, to and under its Intellectual Property (as defined in the NVK Loan Agreement) and all proceeds thereof. The principal is entirely repayable on the maturity date in September 2025 and interest is payable monthly following a Qualified Financing (as defined in the NVK Loan Agreement). The NVK debt is convertible into common stock of Scienture at a fully-diluted Scienture valuation of $60,000,000.

On October 10, 2025, the parties executed a Second Amendment extending the loan’s maturity to December 8, 2025, and waiving any existing defaults. As of September 30, 2025, the outstanding balance (principal + interest) was $2,656,250. Early repayment requires payment of this balance plus$791.67 per day (or $1,069.44 per day during any new default). As consideration, the Company agreed to pay NVK $25,000 plus legal fees, a $25,000 maturity extension fee, and issue 250,000 common shares, which the Company agreed to register. As of October 15, 2025, the Company fully repaid the NVK Loan and satisfied all obligations under the amendment (see Note 15).

The balance of the NVK debt upon the Scienture Merger, and at September 30, 2025, was $2,000,000. Interest expense on the NVK debt was $77,500 and $232,500, for the three and nine months ended September 30, 2025, respectively.

August 2024 Note

In August 2024, the Company issued a convertible note of $360,000, for which the Company received $314,000 in net proceeds. On the six-month anniversary of the issuance, the Company was required to make a payment of $360,000 to the noteholder and each month thereafter the Company was required to make a payment of $7,200 to the noteholder towards repayment of the note (each, an “Amortization Payment”). The note bears interest at 12% per annum and is deemed earned in full and guaranteed as of the note issuance date. If the Company fails to pay any Amortization Payment, the noteholder will have the right to convert the outstanding principal and accrued interest at a conversion price equal to the Conversion Price (as defined below and subject to a floor price of $1.50). The Conversion Price is the lesser of (i) $8.36 or (ii)85% of the lowest volume-weighted average prices of the preceding five trading days. The note matures on August 20, 2025.

In connection with the note, the Company issued 76,923 warrants to purchase common stock to the noteholder. The warrants have an exercise price of $9.36 per share, are immediately exercisable and have a term of 5 years. The fair value of the warrant was $71,332, which was recognized as a debt discount and will be amortized to interest expense over the life of the note.

Total debt discount recognized in connection with the note was $117,332, with $42,755 amortized through December 31, 2024, and an additional $0 and $28,931 amortized during the three and nine months ended September 30, 2025. The net carrying value of the note payable, after deducting the remaining unamortized discount of $45,646, was $357,554, including $43,200 of accrued interest. On March 31, 2025, the Company converted the outstanding note into equity by issuing 274,000 shares of common stock at a fair value of $411,000. As a result, it recognized a $53,446 loss on conversion, reported as a non-operating expense in the unaudited condensed consolidated statements of operations.

Debt Summary

The following is a summary of the Company’s debt as of September 30, 2025 and December 31, 2024:

NOTE 9 –STOCKHOLDERS’ EQUITY

Designation of Series B Preferred Stock

Effective June 26, 2023, the Company filed a Certificate of Designation, Preferences, Rights and Limitations of the Series B Preferred Stock (the “Series B Preferred Stock”) with the Secretary of the State of Delaware that designated 787,754 shares of the Company’s authorized and unissued preferred stock as convertible Series B Preferred Stock at a par value of $0.00001 per share.

Holders of the Series B Preferred Stock are not entitled to receive dividends and do not have redemption or voting rights. Furthermore, the Series B Preferred Stock does not have a liquidation preference. Shares of Series B Preferred Stock are automatically convertible into shares of the Company’s common stock at a ratio of 100 shares of common stock for each share of Series B Preferred Stock upon stockholder approval of such conversion.

As of September 30, 2025, there were 15,759 issued and outstanding shares of Series B Preferred Stock.

Designation of Series X Preferred Stock

On July 25, 2024, the Company revoked the authorization to issue shares of the Company’s Series A Preferred Stock, par value $0.00001 per share (the “Series A Preferred Stock”) and concurrently authorized the issuance of up to 9,211,246 shares of the Series X Preferred Stock, a then new class of preferred stock.

Holders of the Series X Preferred Stock are entitled to receive dividends on shares of the Series X Preferred Stock on an as-if-converted-to-Common-Stock basis, without regard to any beneficial ownership limitation described in a letter of transmittal, equal to and in the same form and manner as dividends are paid to holders of the shares of Common Stock. Subject to any requirements of the General Corporation Law of the State of Delaware, the Series X Preferred Stock has no voting rights. The Series X Preferred Stock ranks on parity with shares of Common Stock as to distributions of assets upon liquidation, dissolution, or winding up of the Company.

As consideration for the Scienture Merger, the shares of Scienture common stock issued and outstanding immediately prior to the “Effective Time” of the mergers 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 was convertible into one share of common stock.

In September 20, 2024, all previously issued shares of Series X Preferred Stock were converted into a total of 6,826,753 shares of common stock. As such, there were no issued and outstanding shares of Series X Preferred Stock as of September 30, 2025.

Common Stock

During the nine months ended September 30, 2025, the Company issued an aggregate of 7,103,614 shares of common stock for net proceeds of $9,008,199.

During the three months ended September 30, 2025, the Company issued 418,064 shares of common stock for services. The fair value of shares issued for services was $442,238 and was included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

During the three months ended September 30, 2025, a warrant holder exercised 279,402 warrants for 279,402 shares of commons stock on a cashless basis (see Note 10).

Effective as of September 17, 2025, an aggregate of 2,000,000 shares of common stock were issued to employees and consultants pursuant to the cancellation of stock options issued to such holders. The Company revaluated the cancelled options using the Black-Scholes options model immediately prior to modification and compared to the fair value of the shares issued at $0.86 per share and the remaining expense to be recognized under the original option grant. Accordingly, the incremental difference of $1,512,995 was recognized as stock-based compensation expense in accordance with ASC 718-20-35 during the nine months ended September 30, 2025.

During the three months ended June 30, 2025, the Company issued 3,002,086 shares of common stock for services. The fair value of shares issued for services was $2,701,253 and was included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

During the three months ended March 31, 2025, the Company issued 240,000 shares of common stock for services. The fair value of shares issued for services was $1,080,000 and was included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

During the three months ended March 31, 2025, the Company issued 274,000 shares of common stock at a fair value of $411,000 pursuant to the conversion of the August 2024 convertible note of $357,554. Accordingly, the Company recognized a $53,446 loss on conversion.

Arena Note Commitment Shares

As additional consideration for the Arena Investors execution and delivery of the Arena SPA with the Arena Investors, the Company issued the Arena Investors the SPA Commitment Fee Shares as described in Note 8 above.

In connection with any Closing following the First Closing, the Company agreed to issue to the Arena Investors participating in such Closing or their designee(s) a certain number of “Commitment Shares.” The aggregate number of Commitment Shares owing to each of the Arena Investors, or their designee(s), in connection with any Closing following the First Closing will be agreed among the Company and the Arena Investors participating in such Closing. For the avoidance of doubt, all of the Commitment Shares issued in connection with the First Closing on the First Closing Date were earned as of the First Closing Date regardless of whether a subsequent Closing occurs (see Note 8).

The Company issued to each Arena Investor participating in the First Closing its pro rata portion of 55,000 shares of the Company’s common stock. The fair value of shares issued was $420,200 was recognized as a debt discount, which was amortized to interest expense in full as commitment shares in connection with first closing was fully earned as of first closing date.

Equity Line of Credit

On November 25, 2024, the Company entered into a purchase agreement (“ELOC Agreement”) with Arena Business Solutions Global SPC II, Ltd (the “Investor”). Under the ELOC Agreement, the Company had the right, but not the obligation, to direct the Investor to purchase up to $50,000,000 in shares of the Company’s common stock (the “ELOC Shares”) upon satisfaction of certain terms and conditions contained in the ELOC Agreement. The term of the ELOC Agreement began on the date of execution and would end on the earlier of (i) the first day of the month following the 36-month anniversary of the execution date, (ii) the date on which the Investor had purchased the maximum amount of ELOC Shares, or (iii) the effective date of any written notice of termination delivered pursuant to the terms of the ELOC Agreement (the “Commitment Period”). The Company terminated the ELOC Agreement effective as of May 22, 2025.

In consideration for the Investor’s execution and delivery of the ELOC Agreement, the Company agreed to issue to the Investor, as a commitment fee: (i)70,000 shares of the Company’s Common Stock (the “Initial Commitment Fee Shares”) and (ii) in two separate tranches, a number of additional shares of common stock (the “Additional Commitment Fee Shares” and, together with the Initial Commitment Fee Shares, the “Commitment Fee Shares”) equal to (a) with respect to the first tranche,500,000 divided by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding the effectiveness of the initial registration statement on which the resale of the Commitment Fee Shares are registered (the “Effectiveness Date”) and (b) with respect to the second tranche,500,000 divided by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding the two (2) month anniversary of the Effectiveness Date. The Additional Commitment Fee Shares were subject to a true-up after each issuance pursuant to the terms of the ELOC Agreement.

The Company issued the Initial Commitment Fee Shares on November 25, 2024. The fair value of the shares issued was $534,800 and was included in deferred offering costs in the consolidated balance sheets. In March 2025, the deferred offering costs previously capitalized were offset against the gross proceeds from the ELOC share issuances (see below).

In 2025, the Company issued to the Investor 450,437 Additional Commitment Fee Shares. The fair value of shares issued was $971,732 and was recognized as offering costs in connection with the related ELOC Agreement share issuances. Accordingly, the fair value of the shares issued were offset against the gross proceeds and there was no net effect to stockholders’ equity.

In March 2025, the Company issued an aggregate of 2,800,000 shares of its common stock pursuant to the terms of the ELOC Agreement. The issuance generated total gross proceeds, which after deducting applicable offering costs, resulted in net proceeds of $4,333,609.

In April and May 2025, the Company issued to the Investor,614,075 shares of common stock as the final Additional Commitment Fee Shares owed to the Investor. The fair value of shares issued was $554,586 and was recognized as deferred offering costs in connection with the related ELOC Agreement share issuances. As mentioned above, the Company terminated the ELOC Agreement effective as of May 22, 2025.

Private Placements

In July 2025, the Company’s board of directors approved a capital raise in an aggregate amount of up to $3,000,000 pursuant to a form of Common Stock Purchase Agreement (the “Purchase Agreement”). During July 2025, the Company sold an aggregate of 1,078,614 shares of common stock for aggregate proceeds of $1,679,993, pursuant to Purchase Agreements with eight accredited investors.

Registered Direct Offering

On August 15, 2025, the Company issued an aggregate of 3,225,000 shares of common stock for aggregate proceeds of $3,549,184, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with several institutional accredited investors as part of a registered direct offering made pursuant to a shelf registration statement on Form S-3 (File No. 333- 289198), which was originally filed by the Company with the Securities and Exchange Commission (the “Commission”) on August 1, 2025, and declared effective on August 8, 2025.

ATM Program

On September 19, 2025, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with Maxim Group LLC (“Maxim”). Pursuant to the ATM Agreement, Maxim will act as the Company’s sole sales agent with respect to the offer and sale from time-to-time of shares of the Company’s common stock, par value $0.00001 per share, having an aggregate gross sales price of up to $18,792,009 through one or more “at-the-market” offerings (the “ATM Program”). Any Shares sold in connection with the ATM Program will be issued pursuant to a shelf registration statement on Form S-3 (File No. 333-289198) (the “Shelf Registration Statement”) filed with the Securities and Exchange Commission (the “SEC”) on August 1, 2025, and declared effective by the SEC on August 8, 2025, the prospectus contained in the Registration Statement, and a prospectus supplement dated September 19, 2025, and a prospectus supplement dated October 24, 2025.

The Company has agreed to pay Maxim a commission of 3.0% of the gross sales price of any Shares sold in the offering. The Company will also reimburse Maxim for certain specified expenses in connection with its services under the Agreement. As of September 30, 2025, the Company had issued and sold 100 shares of common stock in connection with the ATM Program.

Equity Compensation Awards

Each independent member of the Company’s board of directors (the “Board”) is to receive an annual grant of restricted common stock of the Company equal to $55,000 in value on April 1st of each year (or such date thereafter as the awards are approved by the Board), and valued on such same date, based on the closing sales price on such date (or the first business day thereafter), which restricted stock awards will vest at the rate of 1/4th of such awards over the following four calendar quarters, subject to such directors continued service to the Company.

The Board and the Company’s stockholders approved an amendment to the Second Amended and Restated 2019 Equity Incentive Plan (the “Plan”), which increased the available shares under the Plan to 5,000,000 shares of the common stock.

NOTE 10 –WARRANTS

In connection with a note (see Note 8), in August 2024 the Company issued 76,923 warrants to purchase common stock. The warrants have an exercise price of $9.36 per share, are immediately exercisable and have a term of 5 years. In August 2024, the holder exercised 28,571 warrants for shares of common stock on a cashless basis. Pursuant to the adjustment provisions in Section 3(b) of the warrant agreement, the exercise price automatically adjusted following the Company’s issuance of shares at a dilutive price of $1.20 on or about August 14, 2025, resulting in an automatic increase in the aggregate warrant share amount. Accordingly, in August 2025, the holder exercised aggregate of 279,402 warrants for shares of common stock on a cashless basis, including 12,706 warrants issued on October 4, 2023.

As of September 30, 2025, the Company remeasured the fair value of warrants outstanding at $138,624. In connection with the remeasurement of warrants, a $59,203 and $781,311 gain was recognized during the three and nine months ended September 30, 2025, respectively, as the change in fair value of warrant liability.

The Company’s outstanding and exercisable warrants, as of September 30, 2025, are presented below:

NOTE 11 –OPTIONS

The Plan allows for and the Company maintains stock option award agreements under which certain employees may be awarded option grants based on a combination of performance and tenure. The number of shares available to grant to employees under the Plan is 5,000,000.

The Board and stockholders approved an amendment to the Plan increasing the available shares under the Plan to 5,000,000 shares of the Common Stock as such common stock existed on July 24, 2024.

Total compensation cost related to stock options granted was $144,565 and $437 for the three months ended September 30, 2025, and 2024, respectively.

Total compensation cost related to stock options granted was $307,439 and $25,147 for the nine months ended September 30, 2025, and 2024, respectively.

On September 17, 2025, the Company cancelled 2,000,000 stock options and granted the related option holders 2,000,000 shares of common stock. This modification resulted in the Company recognizing the remaining expense under the original option and an additional incremental consideration as a result of the modification. Total stock-based compensation cost as a result of this transaction was $1,512,995.

The following table represents stock option activity for the nine-month period ended September 30, 2025:

NOTE 12 –COMMITMENTS AND CONTINGENCIES

Eat Well

As previously disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2025, and the Quarterly Report on Form 10-Q filed with the SEC on August 12, 2025, the Company entered into, and closed on the transactions contemplated by, an Amended and Restated Agreement and Plan of Merger with Superlatus, whereby the Company acquired Superlatus (the “Superlatus Acquisition”) in July 2023. In connection with the Superlatus Acquisition, former shareholders of Superlatus received 306,855 shares of the Company’s Series B Preferred Stock, par value $0.00001 per share (the “Series B Preferred Stock”). The Series B Preferred Stock are convertible into shares of the Company’scommon stock at a conversion ratio of 100-1.

In January 2024, shareholders holding shares of Series B Preferred Stock surrendered shares of the Series B Preferred Stock back to the Company as a result of Superlatus failing to meet certain post-closing conditions associated with the Superlatus Acquisition, such that only 15,759 shares of Series B Preferred Stock remained outstanding.

On March 5, 2024, the Company sold all of the issued and outstanding stock of Superlatus Inc. to Superlatus Foods Inc. pursuant to the Superlatus SPA. As a result of the transaction, Superlatus Inc. 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 Inc. became rights and obligations of the Buyer. The shares of Series B Preferred Stock issued in connection with the Superlatus Acquisition remain outstanding.

In January 2025, Eat Well Investment Group, Inc., a Canadian company (“Eat Well”) holding 11,643.84 shares of the Series B Preferred Stock, filed a complaint against the Company in the United States District Court for the Middle District of Florida alleging, among other things, that the Company is responsible for paying certain consideration to Eat Well in connection with Superlatus’ acquisition of Eat Well in June 2023 prior to the Company’s acquisition of Superlatus. Ultimately, Eat Well is seeking $8.5 million to be delivered in the form Company common stock, $1.15 million in unpaid principal and accrued interest under a legacy note made by Superlatus in favor of Eat Well, $350,000 in cash consideration owed by Superlatus to Eat Well, $755,000 in unpaid principal and accrued interest on ten promissory notes made by Sapientia, Inc., a subsidiary of Superlatus, in favor of Eat Well, and certain other damages. There can be no assurance that an amicable resolution will be obtained. The Company intends to vigorously defend itself in the litigation.

Kesin Pharma Corporation

As previously disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2025, and the Quarterly Reports on Form 10-Q filed with the SEC on May 12, 2025, and August 12, 2025, Scienture entered into an exclusive license and commercial agreement (the “Kesin Agreement”) with Kesin Pharma Corporation (“Kesin”) whereby Scienture granted the exclusive license rights to commercialize SCN-102 in 2022 and SCN-104 in 2023 to Kesin for use in the United States of America.

In March 2024, the parties terminated the Kesin Agreement, and the parties agreed that Scienture would pay Kesin a total gross amount of $1,285,000 upon commercialization of product via a royalty arrangement. The royalty agreement requires that ifthe full $1,285,900 has not been repaid within two years of the earlier of (i) commercial launch or (ii) 120 days from FDA approval, then interest will accrue prospectively at a rate of 8% annually on the unpaid balance. Accordingly, Scienture recorded a $1,285,000 termination fee liability. As of September 30, 2025, the entire amount is outstanding.

In August 2024, Kesin demanded immediate payment of the full amount under the Kesin Termination Agreement, alleging the full amount is payable in connection with the consummation Scienture’s business combination with the Company. Scienture disputed that the amount is payable, and the parties entered into discussions to resolve the issue.

On March 11, 2025, Kesin filed a complaint against Scienture in the United States District Court for the Eastern District of New York seeking payment of the disputed $1.285 million. The case was voluntarily dismissed on October 1, 2025. The Company and Kesin entered into a Settlement Agreement and Release on October 27, 2025, whereby Kesin agreed to unconditionally release and discharge the Company from all actions related to the complaint in exchange for the Company paying $1.285 million plus 8% interest from March 13, 2025, and legal fees and costs related to the complaint according to a payment schedule through December 2026 (see Note 15).

NOTE 13 –LEASES

The Company entered into a lease agreement for the period of October 2018 to November 2023. At inception, management had included the renewal period from November 2023 to November 2028 within the initial recognition of the related right of use assets and lease liabilities, as it was reasonably expected, at the time, that the renewal option would be exercised. The Company determined that the new lease required measurement and recognition of the lease liability and right-of-use assets of $313,301. The lease is classified as an operating lease. No incentives were included in the lease.

On April 30, 2025, the Company completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo. In connection with the transaction, the Company derecognized subsidiary’s operating lease right-of-use assets of $142,138 and operating lease liability of $158,687 (see Note 1). As such, the Company recognized a gain of $16,548 on disposition of related IPS lease.

On July 25, 2024, the Company entered into and closed the Scienture Merger. Pursuant to the Scienture Merger Agreement, the Company acquired right of use asset value of $61,578 and right of use liability of $61,886 on the acquisition date together with all the assets and liabilities of Scienture.

The table below reconciles the fixed component of the undiscounted cash flows for and the total remaining years to the lease liabilities recorded in the consolidated balance sheet as of September 30, 2025.

Supplemental balance sheet information related to leases are as follows:

For the three months ended September 30, 2025, and 2024, total operating lease expense was $8,906 and $28,034, respectively, which is included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

For the nine months ended September 30, 2025, and 2024, total operating lease expense was $68,103 and $53,715, respectively, which is included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

NOTE 14 –SEGMENT REPORTING

Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker (the “CODM”) in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates all reporting segments in one geographical area (the United States).

The Company’s chief operating decision-makers are its co-Chief Executive Officers, who make resource allocation decisions and assess performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, as of September 30, 2025, the Company has a single reportable segment and operating segment structure.

The key measures of segment profit or loss reviewed by our CODM are operating costs. These metrics are reviewed and monitored by the CODM to manage and forecast cash. The CODM also reviews operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.

NOTE 15 –SUBSEQUENT EVENTS

Equity Compensation Awards

On October 1, 2025, the Company issued an aggregate of 1,200,898 shares of common stock to its officers and directors under the Plan as compensation.

Convertible Debenture – Arena

On October 3, 2025, the Company entered into a letter agreement (the “Arena Agreement”) with the Arena Investors whereby the Company and the Arena Investors agreed to amend Section 4(b) of the First Closing Debentures. Specifically, the Company and the Arena Investors agreed to revise the conversion price of the First Closing Debentures to $2.4861 per share. In addition, each of the Arena Investors agreed to convert the remaining amounts owed by the Company under the First Closing Debentures into shares of the Company’s common stock in accordance with the revised terms of the Debentures (the “Full Conversion”).

All conditions to the Full Conversion were subsequently met and, therefore, all Obligations (as defined in the Security Agreement dated November 25, 2024, by and among the Company and the Arena Investors) under the Transaction Documents (as defined in the Arena SPA) have been deemed paid and automatically and irrevocably released, satisfied and discharged in full (except those obligations of the Company under Section 5.10 of the Arena SPA and Section 7 of the Registration Rights Agreement dated November 25, 2024, by and among the Company and the Arena Investors). Furthermore, the First Closing Debentures, all other Transaction Documents, and all security interests, pledges and other liens of every type at any time granted to or held by the Arena Investors were terminated and automatically and irrevocably released without further action by the Arena Investors. As a result, neither of the Arena Investors will have any obligation to make any credit extensions or financial accommodations to the Company or any other obligations, duties, or responsibilities in connection therewith. The Company issued an aggregate of 224,998 shares to the Arena Investors in connection with the Full Conversion and no longer has any outstanding payment or other obligations under the First Closing Debentures.

Scienture Convertible Debt

On October 10, 2025, the Company and Scienture, LLC entered into a Second Amendment of Loan and Security Agreement (the “Second Amendment”) to the NVK Loan. Pursuant to the Second Amendment, the parties agreed to extend the maturity date of the loan until December 8, 2025 (the “New Maturity Date”) and NVK agreed to waive any existing Events of Default (as defined in the NVK Loan). The parties acknowledged that as of September 30, 2025, the total outstanding balance of the NVK Loan, inclusive of principal and interest, was $2,656,250 (the “Outstanding Balance”). In the event Scienture, LLC elects to satisfy the NVK Loan prior to the New Maturity Date, it will owe the Outstanding Balance plus an additional$791.67 per day (or $1,069.44 per day if there is an Event of Default between September 30, 2025, and the applicable pay-off date).

As consideration for NVK executing the Second Amendment, the Company agreed to (i) pay NVK a fee in the amount of $25,000 plus any associated legal fees; (ii) pay NVK a maturity extension fee of $25,000 on the New Maturity Date; and (ii) issue 250,000 shares of the Company’s common stock, par value $0.00001 per share, to NVK. The Company also agreed to register the resale of the shares of common stock issued to NVK.

As of October 15, 2025, the Company has fully repaid all amounts due under the NVK Loan and satisfied all obligations under the Second Amendment.

Streeterville Note

On October 14, 2025, the Company entered into and closed on a note purchase agreement (the “Purchase Agreement”) with Streeterville Capital, LLC, (the “Lender”), which provided for the issuance of a senior secured promissory note in the principal amount of $3,911,111.11 (the “Streeterville Note”). The Streeterville Note carries an original issue discount of $391,111.11 and an interest rate of 9% per annum, computed on the basis of a 360-day year comprise of twelve (12) thirty (30) day months, compounded daily. The Company agreed to pay $20,000 to the Lender to cover the Lender’s transaction costs, resulting in the Company receiving net proceeds of $3,500,000. Upon receipt of the net proceeds, the Company repaid in full the remaining outstanding balance of the NVK Loan. The Company intends to utilize the remaining net proceeds from closing of the Purchase Agreement for working capital, debt repayment, capital expenditures, product development, and other general corporate purposes.

The Streeterville Note was to mature on the seven month anniversary of closing; however, the Company fully repaid all outstanding balances and fulfilled all obligations under the Streeterville Note as of November 7, 2025.

ATM Program Increase

On September 19, 2025, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with Maxim Group LLC (“Maxim”). Pursuant to the ATM Agreement, Maxim will act as the Company’s sole sales agent with respect to the offer and sale from time-to-time of shares of the Company’s common stock, par value $0.00001 per share, having an aggregate gross sales price of up to $18,792,009 through one or more “at-the-market” offerings (the “ATM Program”). Any Shares sold in connection with the ATM Program will be issued pursuant to a shelf registration statement on Form S-3 (File No. 333-289198) (the “Shelf Registration Statement”) filed with the Securities and Exchange Commission (the “SEC”) on August 1, 2025, and declared effective by the SEC on August 8, 2025, the prospectus contained in the Registration Statement, and a prospectus supplement dated September 19, 2025, and a prospectus supplement dated October 24, 2025. The Company has agreed to pay Maxim a commission of 3.0% of the gross sales price of any Shares sold in the offering. The Company will also reimburse Maxim for certain specified expenses in connection with its services under the Agreement. As of the date of this prospectus supplement, we have sold 15,722,759 shares of our common stock under the ATM Sales Agreement and have received $15,568,236 in gross proceeds in connection with these sales. The Company fully repaid the Streeterville Note utilizing proceeds received from sales of its common stock under the ATM Program.

Employment Agreement

On October 20, 2025, Scienture, LLC, a wholly owned subsidiary of Scienture Holdings, Inc. (the “Company”), entered into (i) an amendment to that certain Employment Agreement by and between Scienture, LLC and Dr. Narasimhan Mani, the Company’s President and Co-Chief Executive Officer (the “Mani Employment Amendment”); and (ii) an amendment to that certain Employment Agreement by and between Scienture, LLC and Dr. Shankar Hariharan, the Company’s Executive Chairman and Co-Chief Executive Officer (collectively, the “Employment Amendments”). The Employment Amendments became effective on October 1, 2025, and were previously approved by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”).

Pursuant to the Employment Amendments, Dr. Mani’s annual base salary increased from $325,000 to $400,000 and Dr. Hariharan’s annual base salary increased from $175,000 to $400,000, each subject to periodic review by the Compensation Committee. Additionally, each of the Employment Amendments modifies Scienture, LLC’s severance obligations to Dr. Mani and Dr. Hariharan, respectively, in the event of termination without Cause or for Good Reason (each as defined in Dr. Mani’s and Dr. Hariharan’s respective Employment Agreements).

Kesin Pharma Corporation

On March 11, 2025, Kesin filed a complaint against Scienture in the United States District Court for the Eastern District of New York seeking payment of the disputed $1.285 million. The case was voluntarily dismissed on October 1, 2025. The Company and Kesin entered into a Settlement Agreement and Release on October 27, 2025, whereby Kesin agreed to unconditionally release and discharge the Company from all actions related to the complaint in exchange for the Company paying $1.285 million plus 8% interest from March 13, 2025, and legal fees and costs related to the complaint according to a payment schedule through December 2026.