Scienture Holdings, Inc.
For the period ended Jun 30, 2025. Filed Aug 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 12, 2025
SCNX$3.13+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001641172-25-009771
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001641172-25-023121
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 105 current paragraphs.
29 unchanged; 31 reworded; 36 added; 9 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 8 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
Existing Business
Current report
Subsequent to the disposition of IPS, Softell, and Bonum Health, Inc. we now exist as a holding company for existing and planned pharmaceutical operating companies focused on providing enhanced value to patients, physicians and caregivers through developing, bringing to market, and distributing novel specialty pharmaceutical products to satisfy unmet market needs. We are in the process of winding down our Bonum Health, LLC subsidiary.
Current report
Operating since 2019, Scienture, located in Commack, New York, is a specialty pharmaceutical company focused providing enhanced value to patients, physicians and caregivers by offering novel specialty products to satisfy unmet market needs. In this regard, Scienture is in the process of developing and commercializing products for the treatment of central nervous system (“CNS”) and cardiovascular (“CVS”) diseases as well as a broad range of novel product candidates including new potential treatments for hypertension, migraine, pain and thrombosis and other related disorders.
Current report
Scienture’s vision is to be a leader in the industry by developing and commercializing new medicines for the treatment of CNS and CVS diseases and across other therapeutic areas. Key elements of Scienture’s strategy to achieve this vision include:
Current report
Scienture currently has four primary product candidates in its development pipeline, summarized below, and is engaged in a variety of research and development efforts to develop novel product candidates for the treatment of various disease conditions. To date, Scienture has not generated revenue from product sales and will not generate such revenues until it successfully obtains regulatory approval for, and commercializes, its product candidates. The progress of Scienture products its development pipeline to date is represented by the green bars shown below.
Current report
Scienture has devoted and will continue to devote significant resources to research and development activities, and expects to incur significant expenses as Scienture continues advancing its product candidates towards FDA approval and expanding product indications for approved products and its intellectual property portfolio. Scienture’s expectations regarding its research and development programs are subject to risks, including the risk that Scienture’s financial condition and results of operations may be materially and adversely affected by delays and failures in the completion of clinical development of its product candidates, which could increase its costs or delay or limit our ability to generate revenues.
Current report
Scienture currently depends on third-party commercial manufacturing organizations (“CMOs”) for its manufacturing operations, including the production of raw materials, finished dosage form product, and product packaging for both its planned product commercialization and for use in its preclinical and clinical research. Scienture does not own or operate manufacturing facilities for the production of any of its product candidates nor does Scienture have plans to develop its own manufacturing operations in the foreseeable future to support clinical trials or commercial production. Scienture currently employs internal resources to manage its manufacturing contractors.
Current report
Scienture is in discussion with CMOs headquartered in North America, Europe and Asia for its pipeline product candidates. These CMOs offer a comprehensive range of commercial contract manufacturing and packaging services.
Current report
If Scienture fails to produce its products and product candidates in the volumes that it requires on a timely basis, or fails to comply with stringent regulations applicable to pharmaceutical drug manufacturers, Scienture may face delays in the development and commercialization of its products and product candidates or be required to withdraw its products from the market** **for risks associated with manufacturing and supply of its products and product candidates.
Current report
SCN-102 (ARBLITM - Losartan Oral Suspension)
Current report
SCN-102, with the brand name Arbli TM, is an oral liquid formulation of losartan potassium for (i) treatment of hypertension, to lower blood pressure in adults and children greater than 6 years old, (ii) reduction of the risk of stroke in patients with hypertension and left ventricular hypertrophy, and (iii) treatment of diabetic nephropathy with an elevated serum creatinine and proteinuria in patients with type 2 diabetes and a history of hypertension. SCN-102 was approved by the FDA in March 2025, making SCN-102 the first and only FDA-approved ready-to-use oral liquid losartan in the U.S. market.
Current report
Losartan is classified as an angiotensin receptor blocker (ARB) for treating hypertension and is one of the highest prescribed molecules for this indication. Current products in the market containing losartan are available only as oral solids, which can be further compounded to a liquid formulation. Arbli TM is the first liquid formulation of losartan on the U.S. market that does not require compounding and has reduced dosing volume and long-term shelf life at room temperature storage.
Current report
SCN-102 has two formulation composition and method of use patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the “orange book”: (i) Patent #: 11,890,273, Issue Date: February 6, 2024, titled “LOSARTAN LIQUID FORMULATIONS AND METHODS OF USE”, Expiration Date: October 7, 2041 and (ii) Patent # 12,156,869; Issue Date: December 3, 2024, titled “LOSARTAN LIQUID FORMULATIONS AND METHODS OF USE”.
Current report
SCN-104 (Multi-dose Dihydroergotamine Mesylate (“DHE”) injection pen)
Current report
The SCN-104 injection pen is a disposable, multiple fixed dose, single entity combination product comprised of a small molecule drug that is administered using a customized injection pen. SCN-104 is a drug product containing DHE as the active ingredient. The mechanism of action of SCN-104 is mediated through DHE and is the same as that of DHE. DHE is available in the market as a single dose nasal spray, which has a high degree of variability in clinical outcomes. While DHE is also available in the market as single dose ampoules for injection, we believe that the process of dose withdrawal from the ampoule followed by self-injection at the time of intense need is cumbersome and difficult for the patient. We believe that the SCN-104 multi-dose self-injection pen is easy to use, provides enhanced patient convenience, and provides for consistent and accurate delivery of doses. The SCN-104 injection pen is being developed via the 505(b)(2) regulatory pathway for the acute treatment of migraine headaches with or without aura and the acute treatment of cluster headache episodes.
Current report
As shown in third party studies of DHE, SCN-104’s mechanism of action for its antimigraine effect is due to its potential action as an agonist at the serotonin 5-HT1D receptors. SCN-104 is intended for subcutaneous administration. SCN-104 is also intended for acute use and is not intended for chronic administration. Scienture has conducted two preclinical studies of SCN-104 and the SCN-104 injection pen: (i) a 30-day repeated dose toxicity study of dimethyl sulfoxide and caffeine following thrice daily, 3 times per week subcutaneous administration in Sprague-Dawley rats and (ii) a 30-day repeated dose toxicity study of dimethyl sulfoxide and caffeine following thrice daily, 3 times per week subcutaneous administration in Göttingen minipigs. Both studies support a conclusion that SCN-102 is considered to have no toxicological significance across hematology, coagulation parameters, clinical chemistry and urinalysis.
Current report
Scienture has had discussions with the FDA regarding its development program for SCN-104, with the FDA indicating that the reference product selected for a comparative regulatory study and proposed plan for manufacturing New Drug Application registration batches are acceptable. The FDA also provided Scienture with feedback on nonclinical safety studies and stability testing. Scienture is working to scale the formulation to enable future commercial scale production and the pen has been optimized for commercial use. Currently, Scienture is focused on planning bioequivalence studies and increasing manufacturing activities for the SCN-104 injection pen. Scienture plans to initiate a Phase 1 single dose study in healthy adults in 2026, following submission of an Investigational New Drug application (an “IND”), if the IND is cleared by the FDA.
Current report
SCN-104 has a formulation composition and method of use application pending in the U.S. (Appl. No. 17/757,924; Filing Date: June 23, 2022; Expiration Date: June 15, 2035).
Current report
SCN-106 (Potential Biosimilar)
Current report
Scienture is developing a potential biosimilar, SCN-106, based on Cathflo Activase, a reference product that is a thrombolytic agent that binds to fibrin in clots and converts entrapped plasminogen to plasmin. SCN-106 is a sterile, purified glycoprotein that is synthesized using the complementary DNA for natural human tPA obtained from a Chinese hamster ovary cell-line.
Current report
Scienture is working with Anthem Biosciences Pvt, Ltd. to develop a biosimilar product that utilizes the same mechanism(s) of action for the proposed condition of use, and has the same route of administration, dosage form, and strength as the reference product. The development program is focused on establishing the analytical similarity of SCN-106 to the reference product. Multiple clones of CHO cells have been produced to synthesize lots of SCN-106 which were screened for similarity to the reference product for several key biochemical quality attributes as well as overall protein yield and finalization of a lead clone.
Current report
Scienture completed a Biosimilar Initial Advisory meeting with the FDA in June 2023 to discuss the CMC, non-clinical, and clinical studies required for regulatory approval. As a result of this meeting, Scienture learned that its analytical strategy for initiating analytical similarity studies between SCN-106 and a proposed biosimilar product is acceptable. Scienture also learned that SCN-106 is suitable for further development and received guidance from the FDA on a comparable clinical study needed to demonstrate biosimilarity of SCN-106 and the reference product. In this regard, Scienture was informed that no additional safety, PK, toxicology or dose range finding studies will be required due to the method of use (very limited exposure) and the availability of an extensive amount of data on the original brand product. The only clinical requirement is a comparative phase 3 clinical study in the sensitive population to demonstrate that there are no clinically meaningful differences between SCN-106 and the currently marketed product.
Current report
SCN-106 is a potential biosimilar and considered by the Company to be part of its product development portfolio, however the Company is not pursuing patent protection for this product.
Current report
SCN-107 (Bupivacaine Long-Acting Injection)
Current report
SCN-107 is a long-acting injection suspension formulation of a non-opioid analgesic that is indicated for postsurgical local and regional analgesia. Scienture’s long-acting formulation, SCN-107, is a novel microsphere-based formulation of bupivacaine that comprises the drug in polymer-based microspheres and is intended to provide pain management over a period of 5-7 days. The product candidate is designed to potentially provide longer term post-surgical pain relief compared to the currently available products in the market.
Current report
Based on initial discussions with FDA regarding this program, Scienture believes this product candidate would require at least one Phase 3 clinical trial to support submission of a marketing application. Scienture anticipates submitting an IND and, if cleared by the FDA, initiating a Phase 1 single dose study in healthy adults in 2025 to conduct an initial assessment of safety and tolerability of SCN-107.
Current report
Scienture has entered into Feasibility Study and Animal Trial Material Manufacturing Agreement with Innocore Technologies, B.V. (“Innocore”), as amended on December 2, 2022 (the “Innocore License”), for certain intellectual property rights associated with SCN-107. Under the Innocore License, Innocore granted Scienture a worldwide exclusive, milestone, royalty-bearing and sublicensable license to certain patent rights for the research and development of SCN-107 in postsurgical local and regional analgesia. Pursuant to the Innocore License, Scienture is required to make low single-digit percentage royalty payments based on annual net sales of licensed products for the first three years of sales on a country-by-country basis, subject to a low single digit increase as of the fourth year of sales on a country-by-country basis.
Current report
SCN-107 has a formulation composition and method of use application pending in the U.S. (Appl. No. 17/996,995; Filing Date: October 24, 2022; Expiration Date: on or after April 22, 2041). Applications in Canada and Europe are currently pending. As described above, the Company licenses certain patent rights from Innocore for the research and development of SCN-107.
Current report
There are $0 in revenues for the three months ended June 30, 2025. Revenues decreased by $18,699 compared to the same period ended June 30, 2024 primarily because of the disposition of the assets and operations of Softell completed in February 2024, as well as the IPS disposition in April 2025 as the IPS’ operations that we retained after the disposition to MMS of certain assets in the first quarter of 2024. The assets and operations of IPS that we retained generated limited revenues in the 2024 period but did not generate revenues between April 1, 2025 and the time our disposition of IPS later in April.
Current report
Professional fees decreased by $299,373 to $209,763 compared to $509,136 for the comparable period in 2024. The decrease was primarily due to decrease in external consulting fees expense in 2025.
Current report
Technology expense decreased by $65,266 for the three months ended June 30, 2025 to $21,408 compared to $86,674 for the comparable period in 2024. The decrease was mainly due to a less of software expense and software support expense after the disposition of IPS.
Current report
Six Month Period Ended June 30, 2025, compared to Six Month Period Ended June 30, 2024
Current report
Professional fees decreased by $66,076 to $622,613 compared to $688,689 for the comparable period in 2024. The decrease was primarily due to decrease in external consulting fees expense in 2025.
Current report
General and administrative expenses (including stock-based compensation expense) decreased by $831,870 for the six months ended June 30, 2025, to $4,283,712 compared to $5,115,582 for the comparable period in 2024. The decrease from 2024 was mainly due to less shares issued in the first and second quarter of 2025 as compared to the fair value of shares issued in the first and second quarter of 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
Removed paragraphs (9)
Previous report
Please see the section entitled “Glossary” in our Annual Report for a list of abbreviations and definitions used throughout this Report.
Previous report
Disposition of Legacy Subsidiaries
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 web development.
Previous report
Professional fees increased by $233,297 to $412,850 compared to $179,553 for the comparable period in 2024. The increase was primarily due to increase in post-acquisition professional fees expense of Scienture, including increased advisory and consulting efforts as Scienture’s operations prepare for commercialization.
Previous report
Revenue Recognition
Previous report
In general, the Company accounts for revenue recognition in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 606, “Revenue from Contracts with Customers.”
Previous 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 Customer receives the product. Customer returns are not material. Step One: Identify the contract with the Customer – IPS requires that an application and a credit card for payment be completed by the Customer prior to the first order. Each transaction is evidenced by an order form sent by the Customer and an invoice for the product is sent by IPS. The collection is probable based on the application and credit card information provided prior to the first order. Step Two: Identify the performance obligations in the contract – Each order is distinct and evidenced by the shipping order and invoice. Step Three: Determine the transaction price – The consideration is variable if product is returned. The variability is determined based on the return policy of the product manufacturer. There are no sales or volume discounts. The transaction price is determined at the time of the order evidenced by the invoice. Step Four: Allocate the transaction price – There is no difference between contract price and “stand-alone selling price”. Step Five: Recognize revenue when or as the entity satisfies a performance obligation – The Revenue is recognized when the Customer receives the product.
Previous report
The Urgent Company, Inc., which was a wholly-owned subsidiary, is a retail and distribution provider of prepackaged, prepared foods. Subsequent to December 31, 2023, we divested our interest in The Urgent Company, Inc.
Reworded paragraphs (31)
Previous wording
This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Part II. Other Information – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 26, 2025 (the “Annual Report”).
Current wording
This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Report, and the audited financial statements and notes thereto and “Part II. Other Information – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 26, 2025 (the “Annual Report”).
Previous wording
Scienture is a New York based branded, specialty pharmaceutical research company which is engaged in the research and development of branded pharmaceutical products. The intellectual property application process was initiated in November 2019 and the product development activities commenced in January 2020. Scienture also plans to foray into commercialization of innovative and branded pharmaceutical products in the US market. Scienture’s assets in development are across therapeutics areas and indications and cater to different market segments. Scienture’s mission is to identify, develop and bring to market innovative technology-based products to address unmet medical needs. Its targeted portfolio consists of short term and long-term opportunities with efficient development, regulatory, and go to market strategies.
Current wording
On July 25, 2024, we acquired a wholly-owned subsidiary, Scienture, which is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system and cardiovascular diseases. Scienture LLC is developing a broad range of novel product candidates including new potential treatments for hypertension, migraine, pain and thrombosis and other related disorders. Scienture’s assets in development are across therapeutics areas and indications and cater to different market segments. Scienture’s mission is to identify, develop and bring to market innovative technology-based products to address unmet medical needs. Its targeted portfolio consists of short term and long-term opportunities with efficient development, regulatory, and go to market strategies.
Previous wording
The Company owned, as of March 31, 2025, 100% of Softell Inc. (f/k/a Trxade Inc.), Integra Pharma Solutions, LLC and Scienture, LLC (f/k/a Scienture, Inc.).
Current wording
After our acquisition of Scienture, we existed as a holding company owning all equity interests of Softell Inc. (f/k/a Trxade Inc.) (“Softell”), Integra Pharma Solutions, LLC d.b.a. Trxade Prime (“IPS”), Bonum Health, LLC, Bonum Health Inc., and Scienture.
Previous wording
On October 4, 2024, the Company and Softell entered into IPS Assignment Agreement, pursuant to which the Company transferred, and Softell accepted, 100% of the membership interests of IPS. As a result, IPS is now a wholly-owned subsidiary of Softell. During the year ended December 31, 2023 and a portion of the quarter ended March 31, 2024, Softell, operated a web-based market platform that enabled commerce among healthcare buyers and sellers of pharmaceuticals, accessories and services. Softell’s current primary operations are conducted through IPS. IPS is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products to customers. IPS’ customers include all healthcare markets including government organizations, hospitals, clinics and independent pharmacies nationwide.
Current wording
On October 4, 2024, the Company and Softell entered into IPS Assignment Agreement, pursuant to which the Company transferred, and Softell accepted, 100% of the membership interests of IPS. As a result, IPS 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. Softell’s current primary operations are conducted through IPS. IPS is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products to customers. IPS’ customers include all healthcare markets including government organizations, hospitals, clinics and independent pharmacies nationwide.
Previous wording
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.”
Current wording
On September 20, 2024, the Company fil changed its legal name from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.”
Previous wording
Bonum Health, LLC was formed to hold certain telehealth assets acquired in October 2019. The “Bonum Health Hub” was launched in February 2020; however, the Company does not anticipate installations moving forward. The Company anticipates dissolving Bonum Health, Inc. and Bonum Health, LLC.
Current wording
Bonum Health, LLC was formed to hold certain telehealth assets acquired in October 2019. The “Bonum Health Hub” was launched in February 2020; however, the Company does not anticipate installations moving forward. On April 30, 2025, the Company completed the sale of Bonum Health, Inc. and Bonum Health, LLC.
Previous wording
On April 8, 2025, the Company entered into a Membership Interest Purchase Agreement (the “IPS MIPA”) with Tollo Health, Inc. (“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 Chief Executive Officer, and Prashant Patel, the Company’s President and Chief Operating Officer, each have a beneficial interest in Tollo.
Current wording
On April 8, 2025, the Company 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.
Previous wording
On April 8, 2025, the Company also entered into a Stock Purchase Agreement (the “Bonum 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.
Current wording
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.
Previous wording
In connection with each of the Agreements, the Company agreed to retain certain excluded liabilities of IPS and Bonum 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 or Bonum, 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 or Bonum, respectively; and (v) related to tax returns or tax matters of the Company, IPS, or Bonum, respectively, for any periods prior to closing under the applicable Agreement.
Current wording
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.
Previous wording
The Company and Tollo have agreed to consummate the closing of each of the Agreements on June 30, 2025, or such other time as the Company and Tollo may agree. As consideration for acquiring IPS and Bonum, Tollo has agreed to pay the Company $5 million in the form of a promissory note bearing interest at the prime rate. The promissory note matures on June 30, 2030. 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.
Current wording
The Company and Tollo consummated the closing of each of the Agreements on April 30, 2025. As consideration for acquiring IPS, Softell, and Bonum Health, Inc., Tollo agreed to pay the Company $5 million, with that consideration delivered in the form of a promissory note bearing interest at the prime rate. The promissory note matures on June 30, 2030. 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 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.
Previous wording
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, LLC subsidiary.
Current wording
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.
Previous wording
Cash was $2,049,638 as of March 31, 2025, compared to $308,096 as of December 31, 2024. The increase in cash was primarily due to the proceeds from issuance of common stock pursuant to ELOC agreement. We expect that our future available capital resources will consist primarily of cash generated from operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.
Current wording
Cash was $15,391 as of June 30, 2025, compared to $308,096 as of December 31, 2024. We expect that our future available capital resources will consist primarily of cash generated from Scienture’s operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.
Previous wording
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.
Current wording
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. After our divestiture of our interest in IPS in April 2025 we no longer generate revenues from operations, and therefore anticipate for the remainder of 2025 our principal sources of, and uses of, cash will be from proceeds of prospective sales of equity and debt securities.
Previous wording
Our primary objectives for the remainder of 2025 are expected to be the continued implementation of Scienture 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.
Current wording
Our primary objectives for the remainder of 2025 are expected to be the continued implementation of Scienture 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. There can be no assurance that our operations will generate significant positive cash flow, or that additional funds will be available to us, through borrowings or otherwise, on favorable terms if required in the future, or at all. We may also raise additional funding in the future through the sale of equity.
Previous wording
We may require additional funding in the future to implement on our business plan and potentially to expand or complete acquisitions. The sources of this capital are expected to be equity investments and notes payable. Our plan for the next twelve months is to continue using the same marketing and management strategies to promote our IPS assets and operations, exploring strategic transactions involving our corporate assets, while also seeking to expand our and Scienture operations organically or through acquisitions, as funding and opportunities arise. In the event we require additional funding, we plan to raise that through the sale of debt or equity, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders. If we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.
Current wording
We may require additional funding in the future to implement on our business plan and potentially to expand or complete acquisitions. The sources of this capital are expected to be equity investments and notes payable. Our plan for the next twelve months is to continue exploring strategic transactions or relationships with counterparties in industries that we deem synergistic or complimentary to those of the Company, while also seeking to expand our Scienture operations organically or through acquisitions, as funding and opportunities arise. In the event we require additional funding, we plan to raise that through the sale of debt or equity, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders. If we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.
Previous wording
As of March 31, 2025, the Company had an accumulated deficit of $42,102,970. As of March 31, 2025, the Company had $2,049,638 in cash.
Current wording
As of June 30, 2025, the Company had an accumulated deficit of $48,823,543. As of June 30, 2025, the Company had $15,391 in cash.
Previous wording
Cash used in operating activities for the three months ended March 31, 2025, was $2,956,457, compared to cash used in operations for the three months ended March 31, 2024, of $10,189,673. The decrease in cash used in operations for the three months ended March 31, 2025 compared to 2024 was primarily due to a lower net loss in and less cash used in operating assets and liabilities in 2025.
Current wording
Cash used in operating activities for the six months ended June 30, 2025, was $4,990,704, compared to cash used in operations for the six months ended June 30, 2024, of $5,967,718. The decrease in cash used in operations for the six months ended June 30, 2025 compared to 2024 was primarily due to decreases in various expenses, charges and liabilities during the 2025 period.
Previous wording
Cash provided by (used in) investing activities for the three months ended March 31, 2025, was $0 and cash provided by investing activities was $27,432,589 for the three months ended March 31, 2024. The cash provided by investing activities in 2024 was primarily due to the MMS disposition in the first quarter, partially offset by the investment in securities of $2,500,000.
Current wording
Cash provided by (used in) investing activities for the six months ended June 30, 2025, was $0 and cash provided by investing activities was $27,431,815 for the six months ended June 30, 2024. The cash provided by investing activities in the 2024 period was primarily due to the disposition of various assets to Micro Merchant Systems, Inc. in the first quarter of 2024 related to our former web-based market platform, partially offset by the investment in securities of $2,500,000.
Previous wording
Cash provided by financing activities for the three months ended March 31, 2025, was $4,697,999 compared to $13,896,011 of cash used in financing activities for the three months ended March 31, 2024. Cash provided by financing activities in 2025 was due to proceeds from issuance of common stock pursuant to ELOC agreement. 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.
Current wording
Cash provided by financing activities for the six months ended June 30, 2025, was $4,697,999 compared to $13,896,011 of cash used in financing activities for the six months ended June 30, 2024. Cash provided by financing activities in the 2025 period was due to proceeds from issuance of common stock pursuant to ELOC Agreement. The change was primarily due to the payment of dividends of $12,671,072 and repayment of contingent liability of $1,246,346 in 2024.
Previous wording
For the three-month period ended March 31, 2025, cost of goods sold and gross profit were $9,585 and $673, and $0 and $0, all respectively for the same period in 2024. Gross profit as a percentage of sales was 6.56% for the three months ended March 31, 2025, compared to no such gross profit (loss) for the three months ended March 31, 2024.
Current wording
For the three-month period ended June 30, 2025, cost of goods sold and gross profit (loss) were $0 and $0, and $19,402 and ($703), all respectively for the same period in 2024. There was no gross profit (loss) as a percentage of sales for the three months ended June 30, 2025, compared to (3.76)% for the three months ended June 30, 2024.
Previous wording
General and administrative expenses (including stock-based compensation expense) decreased by $3,344,214 for the three months ended March 31, 2025, to $1,355,948 compared to $4,700,162 for the comparable period in 2024. The decrease from 2024 was mainly due to a decrease in the fair value of shares issued for services in 2025.
Current wording
General and administrative expenses (including stock-based compensation expense) increased by $2,512,343 for the three months ended June 30, 2025, to $2,927,764 compared to $415,421 for the comparable period in 2024. The increase from 2024 was mainly due to shares issued in the second quarter of 2025.
Previous wording
We had interest expense of $670,784 for the three months ended March 31, 2025, compared to interest expense of $98,515 for the three months ended March 31, 2024. The increase is due to the interest expense on Scienture LLC’s convertible debt, the convertible notes issued in August and November 2024, and related debt discount amortization on these notes.
Current wording
We had interest expense of $653,493 for the three months ended June 30, 2025, compared to interest expense of $4,949 for the three months ended June 30, 2024. The increase is due to the interest expense on Scienture LLC’s convertible debt, the convertible notes issued in November 2024, and related debt discount amortization on these notes.
Previous wording
We recognized a gain on the change in the fair value of the warrant liability of $645,986 for the three months ended March 31, 2025, compared to a loss of $729,889 during the three months ended March 31, 2024, based on the underlying valuation inputs.
Current wording
We recognized a gain on the change in the fair value of the warrant liability of $76,122 for the three months ended June 30, 2025, compared to a loss of $165,132 during the three months ended June 30, 2024, based on the underlying valuation inputs.
Previous wording
During the three months ended March 31, 2025, the Company incurred a net loss from continuing operations of $3,063,997 compared to a net loss from continuing operations of $6,633,422 for the three months ended March 31, 2024. The change was due to change in operating income, other income (expense).
Current wording
During the three months ended June 30, 2025, the Company incurred a net loss from continuing operations of $6,720,573 compared to a net loss from continuing operations of $1,624,741 for the three months ended June 30, 2024. The change was due to the decrease in operating income, other income (expense).
Previous wording
Net income from discontinued operations was $27,879,455 for the three months ended March 31, 2024. The income was primarily due to the disposal of Softell assets, partially offset by loss on disposal of Superlatus during the three months ended March 31, 2024.
Current wording
Net income from discontinued operations was $209,161 for the three months ended June 30, 2024. The income was primarily due to the disposal of Softell’s assets, partially offset by loss on disposal of Superlatus Inc. during the three months ended June 30, 2024.
Previous wording
There are $10,258 in revenues for the three months ended March 31, 2025. Revenues increased by $10,258 compared to the same period ended March 31, 2024 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.
Current wording
There are $10,258 in revenues for the six months ended June 30, 2025. Revenues decreased by $8,441 compared to the same period ended June 30, 2024 primarily because of the disposition of the assets and operations of Softell completed in February 2024 , as well as the IPS disposition in April 2025 as the IPS’ operations that we retained after the disposition to MMS of certain assets in the first quarter of 2024. The assets and operations of IPS that we retained generated limited revenues in the first quarter of 2025.
Previous wording
Wages and salary expense increased by $473,474 for the three months ended March 31, 2025 to $696,068 compared to $222,594 for the comparable period in 2024. The increase is primarily due to an increase in salaries for executives, as well as the Scienture Merger in July 2024, as compared to the same period in 2024, which increased the headcount of the Company’s operations.
Current wording
Wages and salary expense increased by $935,163 for the six months ended June 30, 2025 to $1,469,807 compared to $534,644 for the comparable period in 2024. The increase is primarily due to an increase in salaries for executives, as well as the Scienture Merger in July 2024, as compared to the same period in 2024, which increased the headcount of the Company’s operations.
Previous wording
Accounting and legal expenses increased by $131,778 for the three months ended March 31, 2025 to $470,825 compared to $339,047 for the comparable period in 2024. The increase is primarily due to more SEC filings and corporate actions requiring additional accounting and legal services.
Current wording
Accounting and legal expenses increased by $341,753 for the six months ended June 30, 2025 to $852,508 compared to $510,755 for the comparable period in 2024. The increase is primarily due to more SEC filings and corporate actions requiring additional accounting and legal services.
Previous wording
Technology expense increased $10,005 for the three months ended March 31, 2025 to $61,620 compared to $51,615 for the comparable period in 2024. The increase was mainly due to increased software expense and software support expense.
Current wording
Technology expense decreased by $55,261 for the six months ended June 30, 2025 to $83,028 compared to $138,289 for the comparable period in 2024. The decrease was mainly due to decreased software expense and software support expense.
Previous wording
Research and development expense pertaining to Scienture LLC’s operations post-acquisition. Research and development expenses was mainly due to contract research organization costs of Scienture LLC. Total expenses by program were as follows:
Current wording
Research and development expense pertain to Scienture LLC’s operations post-acquisition. Research and development expenses was mainly due to contract research organization costs of Scienture LLC. Total expenses by program were as follows:
Previous wording
We recognized a gain on the change in the fair value of the derivative liability of $603,322 for the three months ended March 31, 2025, based on the underlying valuation inputs and the conversion features of the Arena convertible debenture.
Current wording
We recognized a loss on the change in the fair value of the derivative liability of $59,594 for the six months ended June 30, 2025, based on the underlying valuation inputs and the conversion features of the Arena convertible debenture.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Wages and salary expense increased by $461,690 for the three months ended June 30, 2025 to $773,739 compared to $312,049 for the comparable period in 2024. The increase is primarily due to an increase in salaries for existing executives, as well as the addition of personnel as part of the Scienture Merger in July 2024, as compared to the same period in 2024, which increased the headcount of the Company’s operations.
Current report — wording carried from elsewhere
Accounting and legal expenses increased by $209,975 for the three months ended June 30, 2025 to $381,683 compared to $171,708 for the comparable period in 2024. The increase is primarily due to more SEC filings and corporate actions and contemplated transactions requiring additional accounting and legal services.
Current report — wording carried from elsewhere
Research and development expense pertain to Scienture LLC’s operations after its acquisition in July 2024. Research and development expenses was mainly due to contract research organization costs of Scienture LLC. Total expenses by program were as follows:
Current report — wording carried from elsewhere
We recognized a loss on the change in the fair value of the derivative liability of $662,916 for the three months ended June 30, 2025, based on the underlying valuation inputs and the conversion features of the Debenture issued to Arena.
Current report — wording carried from elsewhere
For the six-month period ended June 30, 2025, cost of goods sold and gross profit (loss) were $9,585 and $673, and $19,402 and ($703), all respectively for the same period in 2024. Gross profit (loss) as a percentage of sales was 6.56% for the six months ended June 30, 2025, compared to (3.76)% for the six months ended June 30, 2024.
Current report — wording carried from elsewhere
We had interest expense of $1,324,277 for the six months ended June 30, 2025, compared to interest expense of $103,464 for the six months ended June 30, 2024. The increase is due to the interest expense on Scienture LLC’s convertible debt, the convertible notes issued in November 2024, and related debt discount amortization on these notes.
Current report — wording carried from elsewhere
We recognized a gain on the change in the fair value of the warrant liability of $722,108 for the six months ended June 30, 2025, compared to a loss of $895,021 during the six months ended June 30, 2024, based on the underlying valuation inputs.
Current report — wording carried from elsewhere
During the six months ended June 30, 2025, the Company incurred a net loss from continuing operations of $9,784,570 compared to a net loss from continuing operations of $8,258,163 for the six months ended June 30, 2024. The change was due to change in operating income, other income (expense).
Current report — wording carried from elsewhere
Net income from discontinued operations was $27,670,294 for the six months ended June 30, 2024. The income was primarily due to the disposal of Softell assets, partially offset by loss on disposal of Superlatus Inc. during the six months ended June 30, 2024.