OSR Health, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this report. Overview Prior to our initial Business Combination on February 14, 2025 we were a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. We effectuated our initial business combination using cash from the proceeds of our IPO and the Private Placement Units, the proceeds of the sale of our capital stock in connection with our initial business combination, shares issued to the owners of the target, debt issued to banks or other lenders or the owners of the target, or a combination of the foregoing. Recent Developments As had been approved at the special meeting of the Company’s stockholders held on November 9, 2023, a Certificate of Amendment to the Company’s Charter to extend the date by which the Company must consummate a business combination from the February 14, 2024 to May 14, 2024 was filed with the Delaware Secretary of State with an effective date of February 9, 2024. The foregoing description of the Charter Amendment is qualified in its entirety by the full text of the Charter Amendment, a copy of which is filed as Exhibit 3.1 to the February 9, 2024 Form 8-K and incorporated herein by reference. As also previously reported by the Company on Form 8-K dated May 14, 2024, on that date the Company held a special meeting of its stockholders (the “ May 14, 2024 Special Meeting ”). At the May 14, 2024 Special Meeting, the Company’s stockholders approved a proposal to amend to the Company’s Charter to allow the Company to extend the date by which the Company must consummate a business combination from May 14, 2024, to November 14, 2024. As of the close of business on April 18, 2024, the record date for the Special Meeting, there were 5,622,954 shares of the Company’s common stock (“ Common Stock ”) issued and outstanding, each of which was entitled to one vote with respect to each of the proposals presented at the Special Meeting. A total of 4,338,495 shares of Common Stock, representing approximately 77.16% of the outstanding shares of Common Stock entitled to vote at the Special Meeting, were present in person or by proxy, constituting a quorum. The proposals listed below are described in more detail in the Proxy Statement. Proposal 1 - Extension Amendment Proposal The stockholders approved the proposal to amend the Charter to allow the Company to extend the date by which the Company must consummate a business combination from May 14, 2024 to November 14, 2024. Proposal 2 - Adjournment Proposal The stockholders approved the proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes to approve the Extension Amendment Proposal or to establish quorum. In connection with the votes to approve the Extension Amendment Proposal, 1,581,733 shares of common stock of the Company were tendered for redemption. 83 In connection with the approval of the extension of the date by which the Company must consummate a business combination from May 14, 2024 to November 14, 2024, BGLSI (or its affiliates or permitted designees) agreed to deposit, by no later than one business day prior to each of May 14, 2024, June 14, 2024, July 15, 2024, August 14, 2024, September 16, 2024, and October 15, 2024 (each date referred to herein as a “ Payment Date ”), the amount of $50,000 into the trust account (each such deposit, a “ Contribution ”). Each of the foregoing contribution payments were timely made by the Company. The Certificate of Amendment to the Charter (the “ Charter Amendment ”) was filed with the Delaware Secretary of State and has an effective date of May 14, 2024. The foregoing description of the Charter Amendment is qualified in its entirety by the full text of the Charter Amendment, a copy of which is filed as Exhibit 3.1 hereto and incorporated herein by reference. As previously reported by the Company on Form 8-K dated November 12, 2024, on that date the Company held an annual meeting of its stockholders (the “ Annual Meeting ”). At the Annual Meeting, the Company’s stockholders approved two proposals to amend the Company’s Amended and Restated Certificate of Incorporation, as amended (the “ Charter ”). The stockholders approved a proposal to amend the Charter to allow the Company to extend the date by which the Company must consummate a business combination from November 14, 2024 to February 14, 2025 (the “ Extension Amendment Proposal ”). The stockholders also approved a proposal to amend the Charter to remove the net tangible asset requirement in order to expand the methods that the Company may employ so as not to become subject to the “penny stock” rules of the U.S. Securities and Exchange Commission (the “ NTA Requirement Amendment Proposal ”). The Certificate of Amendment to the Charter (the “ Charter Amendment ”) was filed with the Delaware Secretary of State and has an effective date of November 12, 2024. The foregoing description of the Charter Amendment is qualified in its entirety by the full text of the Charter Amendment, a copy of which is filed as Exhibit 3.1 to Form 8-K dated November 12, 2024 hereto and incorporated herein by reference. As of the close of business on October 17, 2024, the record date for the Annual Meeting, there were 4,041,221 shares of the Company’s common stock, par value $0.0001 per share (“ Common Stock ”), issued and outstanding, each of which was entitled to one vote with respect to each of the proposals presented at the Annual Meeting. A total of 2,878,990 shares of Common Stock, representing approximately 71.24% of the outstanding shares of Common Stock entitled to vote at the Annual Meeting, were present in person or by proxy, constituting a quorum. Both the Extension Amendment Proposal and the NTA Requirement Amendment were approved by the shareholders. Additionally, the stockholders duly elected each of the five (5) then existing directors (Kuk Hyoun Hwang, Jun Chul Whang, Jin Whan Park, Phil Geon Lee and Sang Hyun Kim) to the Company’s Board of Directors until the next annual meeting of stockholders following this annual meeting or until each such director’s successor is elected and qualified, subject to his earlier death, resignation or removal. In connection with the votes to approve the Extension Amendment Proposal and NTA Requirement Amendment Proposal, 1,721,469 shares of common stock of the Company were tendered for redemption. As previously reported by the Company on Form 8-K dated February 13, 2025, on that date the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of the State of Delaware. The terms of the Amended and Restated Certificate of Incorporation are described in the proxy statement (the “ Proxy Statement ”) for the special meeting of stockholders held by the Company on February 13, 2025 (the “ Special Meeting ”). A copy of the Company’s Amended and Restated Certificate of Incorporation is attached to the Company’s Form 8-K dated February 13, 2025 as Exhibit 3.1 and is incorporated herein by reference. On February 13, 2025, the Company held the Special Meeting. There were 2,319,752 shares of Company common stock, par value $0.0001 per share (“ Company Common Stock ”), outstanding at the close of business on January 27, 2025, the record date for the Special Meeting. At the Special Meeting, the holders of 2,179,383 shares of Company Common Stock, or 93.95% of the voting power of all outstanding Company Common Stock were represented in person or by proxy, which constituted a quorum. Set forth below are the proposals voted upon at the Special Meeting (each of which is described in the Proxy Statement. Proposal No. 1 – The Business Combination Proposal The Shareholders approved the proposal to approve the business combination (the “ Business Combination ”) reflected by the Amended and Restated Business Combination Agreement, dated May 23, 2024, as amended on December 20, 2024 (the “ Business Combination Agreement ”). 84 Proposal No. 2 – The Charter Proposal The Shareholders approved the proposal to approve the Amended and Restated Certificate of Incorporation of the Company (the “ Amended Charter ”). Proposals No. 3A-3F – The Advisory Governance Proposals The Shareholders approved six separate governance proposals (on a non-binding advisory basis in accordance with the requirements of the U.S Securities and Exchange Commission) relating to material differences between the current certificate of incorporation and the Amended Charter, and the current bylaws of the Company and Amended and Restated Bylaws of the Company to be in effect upon completion of the Business Combination. Specifically: 3A: Name Change – To change the Company name to “OSR Holdings, Inc.” 3B: Preferred Stock – To increase the number of shares of preferred stock that can be issued from 1,000,000 shares to 20,000,000 shares. 3C: Increase Vote Required for Removal of Directors – To provide that directors may be removed by the affirmative vote of the holders of at least 66 2/3% of the voting power instead of for cause and by the affirmative vote of holders of a majority of the voting power. 3D: Corporate Opportunity – To eliminate the current limitations on the corporate opportunity doctrine. 3E: Change in Quorum – To provide that the quorum required for stockholder meetings is the holders of one-third in voting power of then outstanding shares of capital stock entitled to vote at the meeting instead of the holders of a majority in voting power of then outstanding shares of capital stock entitled to vote at the meeting. 3F: Additional Charter Amendments – To approve all other changes including eliminating certain provisions related to special purpose acquisition companies that will no longer be relevant following the closing of the Business Combination. Proposal No. 4 – The Incentive Plan Proposal The Shareholders approved the proposal to adopt the new omnibus incentive plan in the form attached as Annex H to the Proxy Statement. Proposal No. 5 – The Director Election Proposal The Shareholders approved the proposal to elect nine (9) individuals as directors of the Company following the closing of the Business Combination until their respective successors are duly elected and qualified. 1. Kuk Hyoun Hwang 2. Jun Chul Whang 3. Phil Geon Lee 4. Alcide Barberis 5. Seng Chin Mah 6. Jin Whan Park 7. Sang Hyun Kim 8. Hyuk Joo Jee 9. Joong Myung Cho Proposal No. 6 – The Nasdaq Proposal The Shareholders approved the proposal to approve, for purposes of complying with the applicable listing rules of the Nasdaq Stock Market LLC, the issuance of shares of Company common stock pursuant to the Business Combination Agreement in connection with the Business Combination. 85 In connection with the votes to approve certain of the above proposals, 57,821 shares of Company Common Stock were tendered for redemption. On February 13, 2025, the Company issued a press release announcing the results of the Special Meeting. A copy of the press release is attached as Exhibit 99.1 to the Company’s February 13, 2025 Form 8-K filing and is incorporated by reference herein. As previously disclosed on the Company’s Current Report filed on Form 8-K on February 21, 2025, on February 14, 2025 (the “ Closing Date ”), the Company completed its previously announced business combination (the “ Business Combination ”) with the Company Co., Ltd., a corporation organized under the laws of the Republic of Korea (“ OSR ”), pursuant to the Amended and Restated Business Combination Agreement, dated as of May 23, 2024, as amended on December 20, 2024 (the “ Business Combination Agreement ”), by and among the Company, OSR, each stockholder of OSR that executed a Participating Joinder thereto (each such person, a “ Participating Stockholder ”), and each stockholder of OSR that executed a Non-Participating Joinder thereto (each such person, a “Non-Participating Stockholder”, and together with the Participating Stockholders, the “ OSR Stockholders ”). On the Closing Date, the Company issued to the Participating Stockholders an aggregate of 16,282,047 shares of Company common stock, par value $0.0001 per share (“ Company Common Stock ”), and the Participating Stockholders transferred their respective shares of OSR’s Series A common stock, with a par value of KRW 5,000 per share (“ OSR Common Stock ”), to the Company (the “ Share Exchange” ). Following the consummation of the Business Combination and the Share Exchange (the “Closing”), the Company now owns approximately 67% of the outstanding OSR Common Stock, and OSR Stockholders holding an additional 22% of the outstanding OSR Common Stock will continue to hold their shares of OSR Common Stock subject to the terms of the Non-Participating Joinders which contain put and call rights whereby the Non-Participating Stockholders shall have the right to cause the Company to purchase (the “ Put Right ”) and the Company shall have the right to cause the Non-Participating Stockholders to sell to the Company or its designee (the “ Call Right ”) all of the shares of OSR Common Stock owned and held of record by such Non-Participating Stockholder. These rights become exercisable on or after the earlier of (i) January 1, 2026, or (ii) the date that the Non-Participating Stockholder is notified by the Company of a transaction that will result in a change in control (as defined in the Non-Participating Joinder) of the Company (the “ Trigger Date ”). The Put Right and Call Right terminate and expire 120 days after the Trigger Date. The exchange ratio is fixed under the put/call rights at the same exchange ratio set forth in the Business Combination Agreement, and there is no option for cash settlement. Holders of approximately 11% of the outstanding OSR Common Stock did not sign a Joinder and will continue to hold their shares of OSR Common Stock, and such shares will not be subject to any contractual put or call rights, or other conversion rights, with or into Company Common Stock. As of the Closing Date, Kuk Hyoun Hwang beneficially held approximately 67.8% of the outstanding shares of the Company Common Stock. Prior to the Closing Date, the Company entered into participating joinders (the “ Participating Joinders ”) with the Participating Stockholders, pursuant to which the Company issued an aggregate of 16,282,047 shares of Company Common Stock to the Participating Stockholders in exchange for an aggregate of 1,256,085 shares of OSR Common Stock, or approximately 67% of the outstanding shares of OSR Common Stock. Pursuant to the Participating Joinders, the Participating Stockholders became party to the Business Combination Agreement with all attendant rights, duties and obligations (including in respect of all of the representations, warranties, covenants, agreements and conditions of the Business Combination Agreement), with the same force and effect as if originally named as a “Participating Company Stockholder” in the Business Combination Agreement. The Participating Joinders contain customary representations, warranties and covenants, and include a general release of all claims against the Company, OSR and each of its and their respective affiliates, successors, assigns, officers, directors, employees, agents, administrators and trustees. The foregoing summary is subject to and qualified in its entirety by reference to the Form of Participating Joinder, which is filed hereto as Exhibit 10.1 to the Company’s February 21, 2025 8-K Filing and the terms of which are incorporated herein by reference. Prior to the Closing Date, the Company entered into non-participating joinders (the “ Non-Participating Joinders ” and, together with the Participating Joinders, the “ Joinders ”) with the Non-Participating Stockholders, pursuant to which the Non-Participating Stockholders became party to the Business Combination Agreement with all attendant rights, duties and obligations (including in respect of all of the representations, warranties, covenants, agreements and conditions of the Business Combination Agreement), with the same force and effect as if originally named as a “Non-Participating Company Stockholder” in the Business Combination Agreement. 86 The Non-Participating Joinders contain put and call rights for the Non-Participating Stockholders and the Company, respectively, whereby the Non-Participating Stockholders shall have the Put Right and the Company shall have the Call Right. The Put Right and Call Right will be exercisable on or after the Trigger Date. The Put Right and Call Right terminate and expire 120 days after the Trigger Date. The Non-Participating Joinders contain customary representations, warranties and covenants, and include a general release of all claims against the Company, OSR and each of its and their respective affiliates, successors, assigns, officers, directors, employees, agents, administrators and trustees. The foregoing summary is subject to and qualified in its entirety by reference to the Form of Non-Participating Joinder, which is filed hereto as Exhibit 10.2 to the Company’s February 21, 2025 8-K Filing and the terms of which are incorporated herein by reference. Additionally, on the Closing Date, the Company entered into Lock-up Agreements (the “ Lock-Up Agreements”) with Bellevue Capital Management LLC (“ BCM ”), BCM Europe AG (“ BCME ”), Sung Jae Yu, and Sung Hoon Chung (together, the “ Holders ”), pursuant to which the Holders are contractually restricted from selling or transferring between 70%-100% of their shares of Company Common Stock received in the Share Exchange (the “ Lock-Up Shares ”). Such restrictions became applicable commencing from the Closing Date and end (i) with respect to BCM and BCME, on the 36-month anniversary of the Closing Date; and (ii) with respect to Sung Jae Yu and Sung Hoon Chung, on January 1, 2026. The foregoing summary is subject to and qualified in its entirety by reference to the Form of Lock-Up Agreement, which is filed hereto as Exhibit 10.3 to the Company’s February 21, 2025 8-K Filing and the terms of which are incorporated herein by reference. As previously disclosed by the Company in its Current Report on Form 8-K filed On February 18, 2025, on February 14, 2025 the Company issued a press release announcing the closing of its previously announced business combination with the Company Co., Ltd., a corporation organized under the laws of the Republic of Korea. A copy of the press release is attached to the Company’s February 18, 2025 Form 10-K filing as Exhibit 99.1 thereto and is incorporated herein by reference. As previously reported by the Company on Form 8-K dated October 25, 2024, on that date the Company advanced a loan to OSR in the amount of $300,000 evidenced by a promissory note (the “the Company Promissory Note ”) that bears interest at a rate of 3.96% per annum, compound semi-annually, and is due on October 25, 2025. Interest is payable only on maturity. The following events constitute an event of default under the Company Promissory Note: (i) a failure to pay the outstanding balance due within five (5) business days of the Maturity Date and (ii) the commencement of a voluntary or involuntary bankruptcy action. The funds were to be used by OSR for working capital and other expenses of OSR. The Company Promissory Note is filed as Exhibit 10.1 to the Company’s Form 8-K filing of October 25, 2025 and is incorporated herein by reference. The disclosures set forth herein are intended to be summaries only and are qualified in their entirety by reference to the Company Promissory Note. Compliance with Continued Exchange Listing Requirements As previously disclosed in the Company’s Current Report on Form 8-K filed on February 21, 2024, on February 15, 2024 the Company received a letter (the “ Notice ”) from the Listing Qualifications Department of Nasdaq notifying the Company that the Company no longer met the minimum 300 public holders requirement for The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(3) (the “ Minimum Public Holders Requirement ”). On April 1, 2024, the Company submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement and, on April 17, 2024, the staff of Nasdaq approved the plan and granted the Company an extension until August 13, 2024 to demonstrate compliance with the Minimum Public Holders Requirement (the “ Compliance Period ”). As previously reported by the Company on Form 8-K dated August 20, 2024, on that date the Company received written notice (the “ Second Notice ”) from Nasdaq stating that the Company has not regained compliance with the Minimum Public Holders Requirement within the Compliance Period. According to the Second Notice, unless the Company timely requested a hearing before a Hearings Panel (the “ Panel ”), the Company’s securities would be subject to suspension or delisted from Nasdaq. As previously reported by the Company on Form 8-K dated October 4, 2024, in accordance with the Second Notice, the Company timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”), which automatically stayed any suspension or delisting action of the Company’s securities, and the hearing was held on October 1, 2024. On October 4, 2024, the Panel granted the Company’s request for continued listing on the Nasdaq, subject to the requirement that on or before February 17, 2025, the Company shall demonstrate compliance with Listing Rule 5505, and that during the exception period, the Company shall provide prompt notification of any significant events that occur during this time that may affect the Company’s compliance with Nasdaq requirements. 87 On March 7, 2025, the Hearings Advisor from the Nasdaq Office of General Counsel sent a letter to Donohoe Advisory Associates LLC, who have advised the Company on SEC compliance matters, noting that on February 13, 2025, the Company had completed its business combination with the Company Co., Ltd. and finding that “[t]he post transaction entity demonstrated compliance with the requirements for initial listing under Listing Rule 5505 and the securities of OSRH began trading on the Nasdaq Capital Market February 18, 2025. ... [a]ccordingly, the Panel has determined to continue the listing of the Company’s securities on The Nasdaq Stock Market LLC and is closing this matter.” Results of Operations Our entire activity since inception through December 31, 2024 related to our formation, IPO, identifying a target company for a Business Combination and consummating the acquisition of OSR. We do not expect to generate any operating revenues until after the completion of an initial business combination. We generated non-operating income in the form of interest income on investments held after our IPO. We will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, an initial business combination. For the year ended December 31, 2024, we had net loss of $2,410,879 which consisted of income from investments held in the Trust Account of $1,450,228 and interest income of $2,181, offset by general and administrative expenses of $3,524,549, provision for income taxes of $295,728, and interest expense of $43,011. For the year ended December 31, 2023, we had net income of $403,780 which consisted of income from investments held in the Trust Account of $2,775,291, offset by general and administrative expenses of $1,830,700 and provision for income taxes of $540,811. Liquidity and Capital Resources Our liquidity needs had been satisfied prior to the completion of our IPO through a capital contribution from our Sponsor of $25,000 for the founder shares and an aggregate of $1,200,000 in loans from our Sponsor under unsecured promissory notes. Upon the closing of our IPO, the promissory notes were be deemed to be repaid and settled in connection with the private placement. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. The net proceeds from (i) the sale of the Units in our IPO (including the Units sold in the exercise of the Over-Allotment Option), after deducting offering expenses of approximately $1,310,000, underwriting commissions of $1,380,000 and excluding deferred underwriting commissions of $2,070,000, and (ii) the sale of the Private Placement Units for an aggregate purchase price of $4,300,000 was $70,610,000. Of this amount, $70,207,500 was placed in the Trust Account, including $2,070,000 of deferred underwriting commissions. The proceeds held in the Trust Account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We used substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions), to complete our initial business combination. We may withdraw interest to pay taxes. We estimate our annual franchise tax obligations, based on the number of authorized shares of our common stock, to be $200,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which we may pay from funds held outside of the Trust Account or from interest earned on the funds held in our Trust Account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. We expect the interest earned on the amount in the Trust Account will be sufficient to pay our income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. As of December 31, 2024, the Company had $66,135 in its operating bank account and a working capital deficit of $6,263,411. The Company’s liquidity needs prior to the consummation of our IPO had been satisfied through proceeds from advances from related party and from the issuance of common stock. Subsequent to the consummation of our IPO, the Company’s liquidity was satisfied through the net proceeds from the consummation of the IPO, the proceeds from the Private Placement Units held outside of the Trust Account and loans from the Sponsor, officers and directors and their affiliates. 88 In order to fund working capital deficiencies or finance transaction costs in connection with our initial business combination, our Sponsor, officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. Up to $1,000,000 of such loans may be convertible into Units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The Units would be identical to the Private Placement Units. We do not expect to seek loans from parties other than our Sponsor, officers and directors or their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. Loans made by Chardan or any of its related persons, if any, will not be convertible into any of our securities and Chardan and its related persons will have no recourse with respect to their ability to convert their loans into any of our securities. Based on the foregoing and the limited amount of working capital that the Company received into the operating account from the private placement, management believes its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements, although its estimate is based on plans and assumptions that may prove to be wrong, and the Company could use its available capital resources sooner that it correctly expects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Over this time period, the Company will be using the remaining funds held outside of the Trust Account for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the initial business combination. Further needs for operating capital beyond the Company’s current operating cash balance may need to be funded through loans from the Company’s Sponsor, officers and directors and their affiliates. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. As previously reported by the Company on Form 8-K dated October 22, 2024, on October 16, 2024, the Company issued an unsecured promissory note to Duksung Co., LTD. (“ Duksung ”) in the principal amount of $800,000 (the “ Duksung Promissory Note ”). The Duksung Promissory Note bears interest at a simple rate of 5% per annum; provided, however, solely for purposes of prepayment pursuant to a redemption of the Duksung Promissory Note, interest shall be deemed to have accrued at a simple rate of 7% per annum and, unless earlier converted or redeemed, is payable in full on October 15, 2025. In the event of, and simultaneously with the closing of a Qualified PIPE Financing (as defined in the Duksung Promissory Note), the Duksung Promissory Note automatically converts into Company common stock in an amount equal to the quotient (rounded to the nearest whole share) obtained by dividing (a) the outstanding principal amount and unpaid accrued interest under the Duksung Promissory Note by (b) eight dollars and ten cents ($8.10) (the “ Conversion ”). The Conversion shall constitute satisfaction in full of the obligations of the Company under the Duksung Promissory Note. In the event a Qualified PIPE Financing does not occur on or before March 31, 2025 (the “ PIPE Outside Date ”), the Company may prepay the Duksung Promissory Note, in whole or in part, at any time after the PIPE Outside Date. The amount to be paid pursuant to any such prepayment shall include the outstanding principal amount plus accrued and unpaid interest calculated at a simple rate of 7% from the issuance date. As of March 31, 2025, the Qualified PIPE Financing did not occur. The foregoing description of the Duksung Promissory Note is qualified in its entirety by reference to the full text of the Promissory Note, a copy of which is filed as Exhibit 10.1 the October 22, 2025 Form 8-K and incorporated herein by reference. PIPE Investment As previously reported by the Company on Form 8-K dated October 4, 2024, on that date the Company and Toonon Partners Co., Ltd. (“Toonon”) entered into a subscription agreement (the “ Subscription Agreement” ), pursuant to which, among other things, the Company agreed to issue and sell to Toonon, and Toonon agreed to subscribe for and purchase, 222,222 shares (the “ PIPE Shares ”) of Series A Preferred Stock of the Company (the “ Series A Preferred Stock ”) for an aggregate purchase price of $20,000,000 or $90.00 per share (the “ Series A Original Issue Price ”) of Series A Preferred Stock (the “ PIPE Investment ”). Prior to closing of the PIPE Investment, the Company filed with the Secretary of State of the State of Delaware a Certificate of Designations (the “ Certificate of Designations ”) setting forth the rights and preferences of the Series A Preferred Stock, which have been agreed to between the Company and Toonon. Such rights and preferences included, among others, that (1) dividends will accrue at a rate of 5% per annum of the Series A Original Issue Price (except as otherwise provided for in the Certificate of Designations) to be payable only when, as, and if declared by the board of directors of the Company or as otherwise specifically provided in the Certificate of Designations; (2) the Series A Preferred Stock is convertible, at the option of the holder thereof, into shares of common stock of the Company (“ Common Stock ”) in an amount equal to the quotient of (i) the Series A Original Issue Price plus all unpaid accruing dividends as of the date of the conversion and (ii) then applicable conversion price (the “ Conversion Price ”) (the Conversion Price shall initially be $9.00); (3) beginning on the one-year anniversary of the original issue date (the “ Original Issue Date ”), the Company had the option, in its sole discretion, to redeem all or a portion of then outstanding shares of Series A Preferred Stock, for an amount equal to the Series A Original Issue Price plus all unpaid accruing dividends as of the date of the redemption; provided, that, for purposes of calculating the accruing dividends in the event of a redemption, dividends will have been deemed to have accrued at a rate of 7.0% per annum of the Series A Original Issue Price (the “ Redemption Price ”); (4) beginning on the three-year anniversary of the Original Issue Date, any holder of Series A Preferred Stock may demand that the Company redeem all or a portion of such holder’s Series A Preferred Stock in an amount equal to the Redemption Price. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Subscription Agreement. 89 The purpose of the PIPE Investment was to raise additional capital for use by the Company following the closing of its previously announced Business Combination. The Subscription Agreement contains customary representations and warranties of the Company and Toonon, and customary conditions to closing, including (i) the consummation of the Business Combination and (ii) certification by an officer of the Company that the Certificate of Designations has been filed with the Secretary of State of the State of Delaware and is in full force and effect. Additionally, pursuant to the Subscription Agreement, the Company and Toonon agreed to enter into a registration rights agreement prior to Closing, pursuant to which, among other things, the Company would be obligated to (i) file a registration statement to register the Common Stock issuable upon conversion of the PIPE Shares as soon as practicable following the receipt of written demand from Toonon, and (ii) use its commercially reasonable efforts to effect such registration, subject to certain exceptions. The PIPE Shares to be sold in connection with the PIPE Investment would be exempt from registration pursuant to Regulation S under the U.S. Securities Act of 1933, as amended. A form of the Subscription Agreement is filed as Exhibit 10.1 to the Company’s October 4, 2024 Form 8-K filing and is incorporated herein by reference. The disclosures set forth herein are intended to be summaries only and are qualified in their entirety by reference to the form of the Subscription Agreement. As reported by the Company on Form 8-K dated December 17, 2024, on that date the Company and Toonon signed the First Amendment to the Subscription Agreement (the “First Amendment”) which amended the Subscription Agreement to remove the redemption features of the Series A Preferred Stock contained in the Certificate of Designations that, pursuant to the closing of the PIPE Investment, the Company intended to file with the Secretary of State of the State of Delaware. The foregoing description of the First Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the First Amendment, a form of which is attached as Exhibit 10.1 to the Company’s Form 8-K filed December 17, 2024, and the terms of which are incorporated herein by reference. Toonon has exercised its right to cancel the transaction citing macroeconomic factors in Korea unrelated to the Company. This loss of expected financing has made it necessary for the Company to seek alternative funding from other sources to sustain its operations and business plans, including the ELOC Agreement described in this section below. ELOC Agreement As previously disclosed on the Company’s Current Report filed on Form 8-K on February 28, 2025, on February 25, 2025 the Company entered into a common stock purchase agreement (the “ Common Stock Purchase Agreement ”) and a related registration rights agreement (the “ White Lion RRA ”) with White Lion GBM Innovation Fund (“ White Lion ”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Common Stock Purchase Agreement. Pursuant to the Common Stock Purchase Agreement, following its closing and following the effective date of a resale registration statement registering the shares issuable to White Lion in accordance with the terms of the White Lion RRA, the Company has the right, but not the obligation, to require White Lion to purchase, from time to time, up to the lesser of (i) $80,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and (ii) the Exchange Cap, in each case, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. The number of shares of Common Stock that the Company may require White Lion to purchase in any single sales notice will depend on a number of factors, including the type of purchase notice that the Company delivers to White Lion. For example: (1) if the Company were to deliver a Rapid Purchase Notice, the Company can require White Lion to purchase a number of shares equal to $2,000,000 divided by the average of the three (3) lowest traded prices of the Common Stock on the Rapid Purchase Notice Date; and (2) if the Company were to deliver a VWAP Purchase Notice, the Company can require White Lion to purchase a number of shares equal to $2,000,000 divided by the product of (i) the lowest daily VWAP of the Common Stock during the VWAP Purchase Valuation Period and (ii) ninety-seven percent (97%). White Lion’s purchase obligations under a single Rapid Purchase Notice or a single VWAP Purchase Notice shall not exceed $2,000,000, and the maximum amount of shares of Common Stock the Company may require White Lion to purchase under a single VWAP Purchase Notice shall be the lesser of (A) 30% of the Average Daily Trading Volume or (B) $2,000,000 divided by the highest closing price of the Common Stock over the most recent five (5) Business Days immediately preceding White Lion’s receipt of the subject VWAP Purchase Notice. 90 The Common Stock Purchase Agreement will terminate automatically on the earlier of (i) December 31, 2026 and (ii) the date when the Company files for bankruptcy, has a bankruptcy case filed against it, has a custodian appointed for it or its property, or assigns its assets to its creditors. In consideration for White Lion’s commitments under the Common Stock Purchase Agreement, the Company agreed to issue to White Lion the number of shares of Common Stock equal to $800,000 divided by the closing price of the Common Stock on the day that is the earlier of (i) the business day prior to effectiveness of the resale registration statement registering the shares issuable under the Common Stock Purchase Agreement and (ii) the business day prior to the date that White Lion requests the issuance of such shares. Concurrently with the Common Stock Purchase Agreement, the Company entered into the White Lion RRA with White Lion, pursuant to which the Company agreed to file, within 30 days following the closing of the Business Combination (as defined in the White Lion RRA), a resale registration statement with the SEC covering the resale by White Lion of the maximum number of shares of Common Stock permitted to be included thereon in accordance with applicable SEC rules, regulations and interpretations. This filing deadline has been extended to April 30, 2025 by mutual agreement of White Lion and the Company. The foregoing descriptions of the Common Stock Purchase Agreement and the White Lion RRA are qualified in their entirety by reference to the full text of the Common Stock Purchase Agreement and the White Lion RRA, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to the Company’s Current Report filed on Form 8-K on February 28, 2025 and incorporated herein by reference. Subsequently, on February 14, 2025, the Company consummated its previously announced Business Combination with OSR Co., Ltd. Off-Balance Sheet Arrangements We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of December 31, 2024. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets. Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor a monthly fee of $7,500, for office space, utilities and secretarial and administrative support. We began incurring these fees on March 1, 2023 and will continue to incur these fees monthly until the earlier of the completion of our initial business combination or our liquidation. Chardan is entitled to a deferred underwriting commission of $2,070,000. Also, we have incurred deferred legal fees payable upon consummation of our initial business combination of approximately $1.25 million. The holders of the founder shares, equity participation shares, placement units, and units that may be issued upon conversion of working capital loans (and in each case holders of their component securities, as applicable) are entitled to registration rights pursuant to the registration rights agreement. These holders are entitled to make up to two demands, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by us. We will bear the expenses incurred in connection with the filing of any such registration statements. Chardan may not exercise its demand and “piggyback” registration rights after five and seven years, respectively, after the date of our prospectus issued in connection with our IPO and may not exercise its demand rights on more than one occasion. Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting estimates. 91 Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item. Item 8. Financial Statements and Supplementary Data This information appears following Item 16 of this Annual Report on Form 10-K and is included herein by reference. Item  9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.