Scienture Holdings, Inc.

Current report

On July 25, 2024, we acquired a wholly-owned subsidiary, Scienture LLC. Scienture LLC is a specialty pharmaceutical company focused on the commercialization and development of products for the treatment of Cardiovascular (CVS) and Central Nervous System (CNS) diseases. Scienture LLC launched its first commercial product for hypertension and is in the process of commercializing its second product for the treatment of opioid overdose. Its development pipeline consists of a broad range of novel product candidates including new potential treatments for migraine, thrombosis, pain and other related disorders. Scienture LLC’s mission is to 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.

Current report

SOSRx, LLC

Current report

SOSRx, was formed on February 15, 2022. The Company entered into a relationship with Exchange Health, LLC (“Exchange Health”), a technology company providing an online platform for manufacturers and suppliers to sell and purchase pharmaceuticals, pursuant to which SOSRx, a Delaware limited liability company, was formed, which was owned 51% by the Company and 49% by Exchange Health. SOSRx did not generate material revenue and in February 2023 the Company voluntarily withdrew from the joint venture agreement.

Current report

Community Specialty Pharmacy, LLC and Alliance Pharma Solutions, LLC

Current report

On January 20, 2023, the Company entered into Membership Interest Purchase Agreements to sell 100% of the outstanding membership interests of the Company’s former subsidiaries, Community Specialty Pharmacy, LLC and Alliance Pharma Solutions, LLC (d.b.a DelivMeds). The Company also agreed to enter into a Master Service Agreement to operate the businesses prior to closing. The transactions contemplated by the Membership Interest Purchase Agreements closed on August 22, 2023.

Current report

Superlatus Inc.

Current report

On July 14, 2023, the Company entered into the Superlatus Merger Agreement with Superlatus Inc., a diversified food technology company, and Merger Sub.

Current report

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.

Current report

Under the terms of the Superlatus Merger Agreement, at the Closing, shareholders of Superlatus received an aggregate of 136,441 shares of the Company’s common stock and 306,855 shares of the Company’s Series B Preferred Stock, convertible into 100 shares of the Company’s common stock. At Closing, the value of the Company’s common stock was $7.30 per share, resulting in a total value of $225,000,169.

Current report

On October 13, 2023, the Company announced that Superlatus PD Holding Company, Inc., a purported subsidiary of Superlatus, entered into a supplier agreement with Rainforest, pursuant to which Superlatus allegedly appointed Rainforest as its exclusive distributor for Superlatus’ portfolio of consumer packaged goods brands in certain markets. The Company later learned and announced that neither the Company’s management nor the Company’s Board of Directors authorized or approved the organization of Superlatus PD Holding Company, Inc. or the entry into the supplier agreement. Instead, the Company’s management determined that certain representatives of a former subsidiary of the Company likely unilaterally took actions related to the supplier agreement.

Current report

On January 8, 2024, the Company entered into the Superlatus Amendment as not all of the closing conditions of the Superlatus Merger Agreement were met. Under the terms of the Superlatus Amendment, the merger consideration to the shareholders of Superlatus was adjusted to the 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.

Current report

On March 5, 2024, the Company entered into the Superlatus SPA with the Buyer, Superlatus Foods Inc. Pursuant to the Superlatus SPA, the Company sold all of the issued and outstanding stock of Superlatus to the Buyer. A $1.00 purchase price 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 is no longer 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.

Current report

Other Legacy Subsidiaries

Current report

The Company also previously owned 100% of Softell, IPS, Bonum Health, Inc., and Bonum Health, LLC.

Current report

On April 8, 2025, the Company entered into the IPS MIPA with Tollo, pursuant to which Tollo agreed to purchase and the Company agreed to sell all of the Company’s membership interests in IPS. Suren Ajjarapu, the Company’s former Chief Executive Officer, and Prashant Patel, the Company’s former President and Chief Operating Officer, each have a beneficial interest in Tollo.

Current report

On April 8, 2025, the Company also entered into the Softell SPA with Tollo, pursuant to which Tollo agreed to purchase and the Company agreed to sell all issued and outstanding shares of common stock of Softell.

Current report

On April 8, 2025, the Company also entered into the Bonum SPA 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.

Current report

The divestitures described above 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 LLC subsidiary.

Current report

The Company believes that the key benefits of the divestitures include:

Current report

As of December 31, 2025, the Company’s primary source of liquidity consisted of $6,662,008 in cash and cash equivalents and the Tollo promissory note with a principal balance of $5,000,000 (bearing interest at the prime rate and maturing June 30, 2030). The Company has financed its operations primarily through equity issuances under its equity line of credit (“ELOC”) and convertible note arrangements. During the year ended December 31, 2025, the Company raised approximately $26.3 million in gross equity proceeds through ELOC and other equity transactions. The Company’s principal uses of cash are commercialization of ARBLI™ and REZENOPYTM research and development, general and administrative costs, and debt service. The Company expects to fund its operations for at least the next twelve months from its existing cash balance and revenues generated from ARBLI™ commercialization, which commenced in the third quarter of 2025 and is expected to grow in 2026. The company also expects to generate revenue from REZENOPYTM which is anticipated to commence in the second quarter of 2026. The Company may also raise additional funding through the sale of debt or equity to fund accelerated pipeline development activities; however, there can be no assurance that such funding will be available on favorable terms, or at all.

Current report

The Company’s ability to continue to fund operations beyond the next twelve months will depend on its ability to grow revenues from the commercialization of ARBLI™ and REZENOPYTM and, if needed, to access additional capital markets. Management continues to evaluate potential strategic transactions and partnerships to accelerate product development and commercialization across the pipeline.

Current report

The consolidated financial statements have been prepared on a going concern basis. As of December 31, 2025, the Company had cash and cash equivalents of $6,662,008, positive working capital of approximately $5,181,000, and current liabilities of approximately $2,735,000. Management evaluated conditions and events in accordance with ASC 205-40 and determined that, based on the factors described below, there is no substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date these financial statements are issued. See also “Note 2 – Going Concern” in the Notes to Consolidated Financial Statements for further discussion.

Current report

Management believes that the Company’s existing cash of $6,662,008, combined with growing revenues from ARBLI™ and REZENOPYTM commercialization and its plans to access additional capital as needed, will be sufficient to fund operations and meet its obligations for at least the twelve months following the issuance of these financial statements. Key factors supporting this assessment include: (i) cash on hand of $6.7 million, which management believes is sufficient to cover current operating requirements; (ii) positive working capital of approximately $5.2 million as of December 31, 2025, compared to a working capital deficit of approximately $(1.6) million as of December 31, 2024; (iii) initial revenues from ARBLI™ commencing in the third quarter of 2025, with projected revenue growth in 2026; (iv) initial revenues from REZENOPY™ commencing in the third quarter of 2025, with projected revenue growth in 2026 and (v) the Company’s ability to modulate discretionary spending and access equity markets, as demonstrated by raising approximately $26.3 million in gross equity proceeds during 2025.

Current report

Net cash used in operating activities from continuing operations for the year ended December 31, 2025 was $13,382,482, compared to net cash used in operating activities of approximately $13,286,163 for the year ended December 31, 2024. The net loss of $43,507,142 was the primary driver of cash used in operations in 2025, partially offset by significant non-cash charges including $26,346,050 of impairment losses, $3,161,100 of debt discount amortization, $2,068,892 of stock-based compensation expense, $4,310,090 of common stock issued for services, $453,846 of amortization of intangible assets, and gains on warrant and derivative fair value changes of $3,205,854. Changes in working capital used cash of approximately $3,0,000, primarily driven by increases in accounts receivable and inventory associated with the ARBLI™ commercialization launch.

Current report

Net cash provided by (used in) investing activities from continuing operations was $0 for the year ended December 31, 2025 and $2,379,024 net cash used in investing activities from continuing operations for the year ended December 31, 2024. Net cash provided by investing activities from discontinued operations was $0 for 2025, compared to $29,931,815 in 2024, which primarily reflected proceeds from the disposition of Micro Merchant Systems assets and other asset sales completed in the first and second quarters of 2024.

Current report

Net cash provided by financing activities from continuing operations for the year ended December 31, 2025 was $19,733,595, compared to net cash used in financing activities of approximately $12,980,000 for the year ended December 31, 2024. Cash provided by financing activities in 2025 was primarily driven by gross proceeds of $26,293,039 from the issuance of common stock through the Company’s ELOC and other equity transactions, partially offset by repayment of convertible notes of $9,244,444, net repayment of related party loans of $415,000, and development liability payments of $400,000. The year ended December 31, 2024 reflected cash used in financing activities primarily due to the payment of special cash dividends of approximately $14,858,000 partially offset by proceeds from convertible note issuances.

Current report

Revenues and Gross Profit

Current report

Revenues for the year ended December 31, 2025 were $431,609, compared to $136,643 for the year ended December 31, 2024, an increase of $294,966, or approximately 216%. The increase reflects initial sales of ARBLI™ (SCN-102, Losartan Potassium Oral Suspension) through wholesale distribution channels, which commenced in the third quarter of 2025 following FDA approval in March 2025. Revenue in 2024 consisted primarily of residual pharmaceutical wholesale activity prior to the IPS disposition. Cost of sales for the year ended December 31, 2025 was $100,127, resulting in gross profit of $331,482 (gross margin: 76.8%), compared to cost of sales of $130,638 and gross profit of $6,005 (gross margin: 4.4%) for the year ended December 31, 2024. The improvement in gross margin reflects the shift to higher-margin branded pharmaceutical sales through ARBLI™ versus the prior-period lower-margin wholesale distribution activity.

Current report

Operating Expenses

Current report

Total operating expenses were $42,922,324 for the year ended December 31, 2025 compared to $14,707,020 for the year ended December 31, 2024. The increase of $28,215,304 was primarily driven by non-cash impairment charges of $26,346,050 recognized in 2025 (comprising a goodwill impairment of $21,372,960 and IPR&D impairment of $4,973,090), with no comparable charge in 2024. Excluding impairment charges, total operating expenses were $16,576,274 in 2025 compared to $14,707,020 in 2024. Key components of operating expenses were as follows:

Current report

Wage and salary expense was $2,118,568 for the year ended December 31, 2025, relatively flat compared to $2,111,066 for 2024. Professional fees increased $949,490 to $2,407,822 in 2025 from $1,458,332 in 2024, primarily due to higher external consulting costs related to commercialization activities, SEC compliance, and corporate actions. Accounting and legal expense was $2,070,337 in 2025 compared to $1,807,041 in 2024, an increase of $263,296, driven by incremental costs associated with the year-end audit, SEC filings, and legal matters. General and administrative expenses (including non-cash stock-based compensation) increased $1,248,436 to $7,926,016 in 2025 from $6,677,580 in 2024, primarily due to higher non-cash stock-based compensation expense and costs associated with ARBLI™ commercialization activities. Technology expense decreased $319,050 to $97,261 in 2025 from $416,311 in 2024, primarily reflecting the wind-down of legacy technology platform expenses following the IPS and Softell dispositions. Research and development expenses were $1,956,270 in 2025 compared to $2,236,690 in 2024, a decrease of $280,420, reflecting shifts in the timing of CRO and regulatory spending across our pipeline programs (SCN-102: $368K; SCN-104: $422K; SCN-106: $298K; SCN-107: $500K in 2025).

Current report

Non-Operating Income (Expense)

Current report

Non-operating income (expense) for the year ended December 31, 2025 included: a gain on the change in fair value of warrant liability of $909,020 (2024: loss of $182,982), reflecting mark-to-market decreases in warrant fair value; a gain on the change in fair value of the derivative liability of $2,296,834 (2024: gain of $180,383), primarily related to the derecognition of the Arena convertible debenture derivative liability upon full repayment; interest income of $302,702 (2024: $135,337) on the Tollo promissory note; interest expense of $4,083,206 (2024: $1,335,631), reflecting a full year of amortization of debt discount and interest on the Arena debenture and other convertible notes; a loss on conversion of note payable of $53,446; and a loss on disposition of subsidiaries of $288,204, primarily related to the Bonum Health, Inc. and Softell transactions. The Company recognized an income tax benefit of $1,994,878 for the year ended December 31, 2025 (2024: $nil), reflecting changes in deferred tax liabilities attributable to the intangible asset impairment charges recognized during the year.

Current report

Net Loss and Discontinued Operations

Current report

Net loss from continuing operations, net of tax, was $41,512,264 for the year ended December 31, 2025, compared to a net loss from continuing operations of $15,803,908 for the year ended December 31, 2024. The increase in net loss was primarily attributable to the $26,346,050 of non-cash impairment charges recognized in 2025, with no comparable charge in 2024. Excluding impairment, net loss from continuing operations improved by approximately $37,000 year over year. There was no income from discontinued operations in 2025. For the year ended December 31, 2024, income from discontinued operations, net of tax, was $27,310,278, primarily from the gain on the sale of MMS assets and the Softell disposition in the first half of 2024. Net loss for the year ended December 31, 2025 was $41,512,264, compared to net income of $11,506,370 for the year ended December 31, 2024.

Current report

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.

Current report

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

Current report

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 product is shipped to the Customer. IPS was divested on April 30, 2025, and its operations are presented as discontinued operations for all periods presented. Following the IPS disposition, the Company’s revenue is derived solely from the sale of pharmaceutical products through wholesale distribution channels. ARBLI™ (SCN-102, Losartan Potassium Oral Suspension) is the Company’s first commercially available product, with sales commencing in the third quarter of 2025. The Company sells its products to wholesale distributors, who in turn sell to retail pharmacies, hospitals, and other healthcare providers. Revenue is recognized at the point in time when control of the product transfers to the customer, which generally occurs upon delivery to the customer’s designated facility. Revenue is measured at the net transaction price, which reflects the gross invoice price reduced by estimated variable consideration, as described below.

Current report

Gross-to-Net Sales Adjustments. The Company records product revenue net of estimated variable consideration. Gross-to-net adjustments include: (i) chargebacks, representing the difference between the price charged to wholesale distributors and the lower contract price that distributors extend to their end-customers (including retail pharmacies, hospitals, and clinics under contracted pricing arrangements), estimated based on expected sell-through to qualifying end-customers and contractual terms; (ii) wholesaler rebates and distribution service fees, representing fees and rebates paid to wholesale distributors and, where applicable, group purchasing organizations (“GPOs”) under contractual arrangements, estimated based on contracted rates, expected sales volumes, and historical payment patterns; (iii) prompt pay discounts, representing discounts offered to wholesale distributors for timely payment, estimated based on contractual terms and expected payment timing; and (iv) product returns, estimated based on contractual return rights and available market data, which have not been material to date given the early stage of commercialization of ARBLI™. Estimates of variable consideration are updated each reporting period based on available historical data, contractual terms, and management’s judgment regarding current market conditions. Accrued liabilities related to gross-to-net adjustments are classified within accrued liabilities on the consolidated balance sheets. The Company does not disclose the value of unsatisfied performance obligations as all contracts have an expected duration of one year or less.

Current report

Non-GAAP Financial Measures

Previous report

On September 20, 2024, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Amended and Restated Certificate of Incorporation to change the legal name of the Company from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.”

Previous report

The Company owned, as of December 31, 2024, 100% of Softell Inc. (f/k/a Trxade Inc.), Integra Pharma Solutions, LLC and Scienture, LLC (f/k/a Scienture, Inc.).

Previous report

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.

Previous report

The Company is in the process of determining a divestment and winddown plan for Softell and IPS. On January 25, 2025, the Company’s Board of Directors approved the preparation of a divestment and winddown plan for the winddown of each of Softell, IPS, Bonum Health, Inc., and Bonum.

Previous report

Scienture LLC 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 LLC also plans to foray into commercialization of innovative and branded pharmaceutical products in the US market. Scienture LLC’s assets in development are across therapeutics areas and indications and cater to different market segments. Scienture LLC’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 report

See ITEM 1 of PART 1

Previous report

See ITEM 1 of PART 1

Previous report

Recent Events

Previous report

On September 20, 2024, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Amended and Restated Certificate of Incorporation to change the legal name of the Company from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.” (the “Name Change”). Other than the Name Change, there were no changes to the Company’s certificate of incorporation or bylaws.

Previous report

Effective September 23, 2024, the Company’s common stock trades under the ticker symbol “SCNX”. The Name Change resulted in a change to the CUSIP number for the Company’s outstanding shares of common stock offered on the Nasdaq Stock Market LLC.

Previous report

Our primary objectives for the year of 2025 are expected to be the continued implementation of the Scienture LLC business plan, 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 report

We estimate our operating expenses and working capital requirements for the next 12 months to be approximately as follows:

Previous report

(1) Includes estimated wages and payroll, legal and accounting, marketing, rent and research and development.

Previous report

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 IPS assets and operations, exploring strategic transactions involving our corporate assets, while also seeking to expand our and Scienture LLC 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 report

The accompanying 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, or the 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.

Previous report

We will need to raise additional capital or secure debt funding to support on-going operations, and to fund the assets and 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.

Previous report

Cash used in operating activities for the year ended December 31, 2024, was $14,265,238 compared to $2,225,192 in 2023. The increase in cash used in operations for the year ended December 31, 2024 was mainly due to our net loss and cash used in operating assets and liabilities in 2024 driven by other receivables, partially offset by non-cash charges.

Previous report

Cash provided by investing activities for the year ended December 31, 2024, was $27,552,791 and cash used in investing activities was $275,717 for the year ended December 31, 2023. The increase in cash provided by investing activities in 2024 was primarily due to the MMS disposition in the first quarter and cash received in acquisition of Scienture, Inc., partially offset by the investment in securities of $2,500,000.

Previous report

Cash provided by in financing activities for the year ended December 31, 2024, was ($14,979,770) compared to $1,406,332 of cash provided by financing activities for the year ended December 31, 2023. The change was primarily due to the payment of dividends of $14,858,831 in 2024. In August 2024, the Company received note proceeds of $314,000 and $2,640,000 in net proceeds from convertible debenture in November 2024.

Previous report

There were $136,643 in revenues for the year ended December 31, 2024. Revenues decreased by $1,227,187, compared to the same period ended December 31, 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 report

For the year ended December 31, 2024, cost of goods sold and gross profit were $130,638 and $6,005, and $1,314,800 and $49,031, all respectively for the same period in 2023. Cost of goods sold decreased by $1,184,162, compared to the same period ended December 31, 2023 primarily because of the disposition of the assets and operations of Softell completed in February 2024 which resulted in the Company having fewer cost of goods sold. Gross profit as a percentage of sales was 4.39% for the year ended December 31, 2024, compared to 3.60% for the year ended December 31, 2023.

Previous report

Wages and salary expense increased by $1,484,520 for the year ended December 31, 2024 to $2,111,067 compared to $626,547 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 increased personnel as a result of the Scienture Merger in July 2024, as compared to the same period in 2023.

Previous report

Professional fees increased by $583,196 to $1,458,332 compared to $875,136 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 LLC.

Previous report

Accounting and legal expenses increased by $162,836 for the year ended December 31, 2024 to $1,669,717 compared to $1,506,881 for the comparable period in 2023. The increase is primarily due to increase in amount of legal services during the year ended December 31, 2024 as compared to the same period in 2023.

Previous report

General and administrative expenses (including stock-based compensation expense) increased by $5,369,446 for the year ended December 31, 2024, to $6,706,082 compared to $1,336,637 for the comparable period in 2023. The increase was mainly due to shares issued for services at fair value of $4,598,294 in 2024.

Previous report

Technology expense increased by $316,031 for the year ended December 31, 2024 to $416,311 compared to $100,280 for the comparable period in 2023. The increase was mainly due to increased software expense and software support expense.

Previous report

Research and development expense pertaining to Scienture LLC’s operations post-acquisition was $2,236,690 for the year ended December 31, 2024. Research and development expenses was mainly due to contract research organization costs of Scienture LLC. Total expenses by program were as follows:

Previous report

We had interest expense of $1,335,631 for the year ended December 31, 2024, compared to interest expense of $1,143,223 for the year ended December 31, 2023. The increase is due to the interest expense on Scienture LLC’s convertible debt, the convertible notes issued in August and 2024, and related debt discount amortization on these notes, partially offset by the Superlatus notes no longer being outstanding after its disposition in early 2024.

Previous report

We recognized a loss on the change in the fair value of the warrant liability of $182,982 for the year ended December 31, 2024 compared to a loss of $148,420 during the year ended December 31, 2023, based on the underlying valuation inputs.

Previous report

We recognized a loss on the change in the fair value of the derivative liability of $180,383 for the year ended December 31, 2024, based on the underlying valuation inputs and the conversion features of the Arena convertible debenture.

Previous report

We recognized impairment loss of $2,500,000 of the investment in equity securities for the year ended December 31, 2024.

Previous report

During the year ended December 31, 2024, the Company incurred a net loss from continuing operations of $18,244,480 compared to $8,482,864 for the year ended December 31, 2023. The change was due to change in operating income, other income (expense), and provision for income taxes.

Previous report

Net income from discontinued operations increased by $36,670,988 to a net income of $27,310,278 for the year ended December 31, 2024, compared to a net loss from discontinued operations of $9,360,710 for the year ended December 31, 2023. The increase was primarily due to the disposal of Softell assets, partially offset by loss on disposal of Superlatus during the year ended December 31, 2024.

Previous report

Liquidity and Capital Resources

Previous report

Cash

Previous report

Cash was $308,096 as of December 31, 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 and convertible debentures issued in November 2024. 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 report

Liquidity

Previous report

Cash, current assets, current liabilities, short term debt and working capital at the end of each period were as follows:

Previous report

Our principal sources of liquidity have historically been cash provided by operations, sales of business assets and operations from time to time, sales of equity, and borrowings under various debt arrangements. Our principal uses of cash have been for operating expenses, technology development, and acquisitions. We anticipate these uses will continue to be our principal sources of, and uses of, cash in the future.

Previous report

The increase in cash as of December 31, 2024 compared to 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, as well as the convertible note issued in August 2024 and convertible debentures issued in November 2024.