What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-20 · 808 added, 701 removed, 316 unchanged (83% of the section changed)

Financial Statements

HOLDINGS, INC.

OSR HOLDINGS, INC.

AND SUBSIDIAIRIES

1 unchanged sentence

(In the United States Dollar, except share data)

December 31, 2024

Current assets:

Cash and cash equivalents

Trade and other receivables, less allowance for credit losses of $ 66,006.82 and $ 67,579.81 as of March 31, 2025 and December 31, 2024, respectively

Trade and other receivables, less allowance for credit losses of $ 69,316.79 and $ 67,579.81 as of June 30, 2025 and December 31, 2024, respectively

Inventories, net

19 unchanged sentences

Income taxes payable

Current portion - LT debt

Derivative liabilities

Total current liabilities

6 unchanged sentences

Common stock, $ 0.0001 par value, Authorized 100,000,000 shares;

19,276,978 shares and 2,155,000 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

19,806,459 shares and 2,155,000 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

5 unchanged sentences

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total liabilities and stockholders’

$ 185,415,021

accompanying notes are an integral part of the condensed consolidated financial statements.

HOLDINGS, INC.

$ 175,239,579

The accompanying notes

are an integral part of the condensed consolidated financial statements.

OSR HOLDINGS, INC.

AND SUBSIDIAIRIES

1 unchanged sentence

(In the United States Dollar)

Three months ended

For the Three Months Ended

For the Six Months Ended

Cost of sales

Selling, general, and administrative expenses

Selling, general, and administrative

Operating loss

1 unchanged sentence

( 3,210,108 )

( 8,147,004 )

( 6,512,636 )

Other income (expense):

6 unchanged sentences

( 3,251,115 )

( 16,618,012 )

( 6,606,477 )

Income tax benefit

1 unchanged sentence

$ ( 2,277,488 )

$ ( 16,618,012 )

$ ( 5,632,853 )

Attributable to:

OSR Holdings Co., Ltd.

OSR Holdings, Inc.

and subsidiaries

1 unchanged sentence

( 11,061,400 )

( 5,632,853 )

Non-controlling interests

( 5,556,612 )

Other comprehensive income for the year, net of tax

Gain on foreign currency translation

Total comprehensive loss for the year

Total comprehensive income(loss) for

( 2,265,887 )

( 9,413,120 )

( 5,609,279 )

Attributable to:

OSR Holdings Co., Ltd.

OSR Holdings, Inc.

and subsidiaries

1 unchanged sentence

( 6,265,628 )

( 5,609,279 )

Non-controlling interests

Loss per share attributable to OSR Holdings Co., Ltd.

and subsidiaries

Basic loss per ordinary share

accompanying notes are an integral part of the condensed consolidated financial statements.

HOLDINGS, INC.

( 3,147,492 )

Income(loss) per share attributable to OSR Holding, Inc.

Basic income(loss) per ordinary share

The accompanying notes

are an integral part of the condensed consolidated financial statements.

OSR HOLDINGS, INC.

AND SUBSIDIAIRIES

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

Condensed Consolidated Statements of Changes in

Stockholders’ Equity (Unaudited)

(In the United States Dollar, except share data)

comprehensive

Non-controlling

stockholders’

at January 1, 2024

Income (loss)

Balance at January 1, 2024

$ ( 10,496,810 )

1 unchanged sentence

( 3,355,366 )

Foreign currency translation adjustment

Balance at March 31, 2024

$ ( 13,852,175 )

Balance at April 1, 2024

$ ( 13,852,175 )

currency translation adjustment

at March 31, 2024

( 2,277,488 )

Foreign currency translation adjustment

Balance at June 30, 2024

$ ( 16,129,663 )

at January 1, 2025

Balance at January 1, 2025

$ ( 19,173,063 )

3 unchanged sentences

( 11,392,814 )

Foreign currency translation adjustment

Business Combination

( 56,524,226 )

currency translation adjustment

Balance at March 31, 2025

$ ( 30,565,877 )

at March 31, 2025

$ 132,282,477

Balance at April 1, 2025

$ ( 30,565,877 )

$ 132,282,477

accompanying notes are an integral part of the condensed consolidated financial statements.

HOLDINGS, INC.

Net gain(loss)

( 5,556,612 )

( 5,225,198 )

Changes in Exercise tax

Foreign currency translation adjustment

Issuance of share capital

Balance at June 30, 2025

$ ( 30,175,318 )

$ 139,153,045

The accompanying notes are an integral part

of the condensed consolidated financial statements.

OSR HOLDINGS, INC.

AND SUBSIDIAIRIES

Consolidated Statements of Cash Flows (Unaudited)

Condensed Consolidated Statements of Cash Flows

(In the United States Dollar)

Three months ended

Six months ended

Cash flows from operating activities:

1 unchanged sentence

$ ( 5,632,853 )

Adjustments to reconcile net (loss) income to cash used in operating activities:

Adjustments to reconcile net loss to cash used in operating activities:

Loss on inventory valuation

1 unchanged sentence

Lease expense

Gain on disposal of ROU assets

Severance pay

Interest expense

Commissions and professional fees

Loss on change in fair value of financial liabilities

Merger and acquisiton costs

Loss on foreign currency translation

Gain on change in fair value of financial liabilities

Gain on foreign currency translation

Changes in operating assets and liabilities:

(Increase) decrease in trade and other receivables

Increase in inventories, net

Increase in other current assets

(Decrease) increase in trade and other payables

Decrease in trade and other receivables

Decrease in inventories, net

Decrease in other current financial assets

Decrease (increase) in other current assets

Increase (decrease) in trade and other payables

Increase in accrued expenses

Increase (decrease) in lease liabilities

Increase in tax payables

(Decrease) Increase in other liabilities

Decrease in lease liabilities

Increase (decrease) in tax payables

Decrease in other liabilities

Net cash used in operating activities

3 unchanged sentences

Disposal of equipment and vehicles

Purchase of equipment and vehicles

Increase in deposits

5 unchanged sentences

Proceeds from short-term borrowing

Repayment of long-term debt

Repayment of short-term borrowing

Issuance of convertible bonds

Repayment of convertible bonds

Net cash provided by financing activities

6 unchanged sentences

Cash paid for income taxes (net of refunds received)

accompanying notes are an integral part of the condensed consolidated financial statements.

HOLDINGS, INC.

TO CONDENSED FINANCIAL STATEMENTS

2025 and 2024

(1) Organization and nature of business

The condensed consolidated financial

statements of OSR Holdings, Inc.

(the “Company” or the “Parent”) and its subsidiaries (collectively, the “Group”)

for the period ended March 31, 2025 were authorized for issuance in accordance with a resolution of the directors meeting on May 7, 2025.

The registered office is located at 37-36 Hoedong-gil, Paju-si, Gyeongi-do, Republic of Korea.

The Company is a global life sciences

holding company based in South Korea and is actively engaging in drug development, dedicating to advance healthcare outcome and driving

social progress.

Through open innovation and responsible investment, the Company aims to make a lasting impact across the industry as

well as our society.

With a strong focus on oncology and immunology, the Company’s mission is to build a robust portfolio of ventures,

bringing innovative and transformative therapies to market.

of shareholders as of March 31, 2025 are as follows:

The accompanying notes are an integral part

of the condensed consolidated financial statements.

OSR HOLDINGS, INC.

NOTES TO CONDENSED

FINANCIAL STATEMENTS

June 30, 2025

(1) Organization

and nature of business

OSR Holdings, Inc.

(the Company) and its subsidiaries

(collectively the Group) are a global healthcare company dedicated to advancing healthcare outcomes and improving the quality of life

for people and their families.

The Group aims to build and develop a robust portfolio of innovative and potentially transformative therapies

and healthcare solutions.

The Group’s current operating businesses (through the four wholly owned subsidiaries) include (i) developing

oral immunotherapies for the treatment of cancer, (ii) developing design-augmented biologics for age-related and other

degenerative diseases and (iii) neurovascular intervention medical device and systems distribution in Korea.

The Group’s vision

is to acquire and operate a portfolio of innovative health-care related companies globally.

The Company (f/k/a Bellevue Life Sciences Acquisition

or BLAC) was incorporated in Delaware on February 25, 2020.

The Company was incorporated for the purpose of entering into

a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or

more businesses or entities (the “Business Combination”).

The Company is an emerging growth company and, as such, the Company

is subject to all of the risks associated with emerging growth companies.

On February 14, 2025 (the “Closing Date”),

the Company consummated its previously announced “Business Combination” with OSR Holdings Co., Ltd., a corporation organized

under the laws of the Republic of Korea (“OSR”), pursuant to the Amended and Restated Business Combination Agreement dated

May 23, 2024, as amended on December 20, 2024 (the “Business Combination Agreement”).

The Business Combination Agreement

was entered into among the Company, OSR, and certain OSR stockholders that executed joinder agreements thereto.

In connection with the

consummation of the Business Combination, the Company changed its name from “Bellevue Life Sciences Acquisition Corp.

to “OSR Holdings, Inc.”

The Business Combination was consummated on February

14, 2025, which, for accounting and reporting purposes under U.S.

generally accepted accounting principles (US-GAAP), was treated as

the equivalent of OSR Holdings Co., Ltd.

exchanging its stock for the net assets of OSR Holdings, Inc, accompanied by an equity recapitalization

of OSR Holdings, Inc, which was determined to fall within the scope of Accounting Standards Codification (ASC) 805 Business Combinations .

OSR Holdings, Inc.

was treated as the acquired company, and its net assets were stated at historical cost, with no goodwill or other

intangible assets recorded.

The excess of the fair value of shares exchanged to OSR Holdings, Inc.

over the fair value of the Company’s

identifiable net assets acquired represented compensation for the service of a stock exchange listing for its shares and was expensed

Details of shareholders as of June 30, 2025 are

Name of Shareholder

ordinary share

Percentage of

Bellevue Global Life Sciences Investors LLC

Bellevue Capital Management Europe AG

BCM Europe AG

Bellevue Capital Management LLC

Duksung Co.,Ltd.

of investments in subsidiaries as of March 31, 2025 are as follows:

Name of subsidiary Share capital Percentage of ownership Principal activities Country of

incorporation

VAXIMM AG (“VAXIMM”) 1,091,203,754 100.00 % Biotech (drug development) Switzerland

As of June 30, 2025, there were 19,806,459 shares of the registrant’s

common stock outstanding.

Details of investments in subsidiaries as of

June 30, 2025 are as follows:

Name of subsidiary Share capital Percentage of

ownership Principal activities

VAXIMM AG (“VAXIMM”) $ 804,485 100.00 % Biotech (drug development)

RMC Co., Ltd.

(“RMC”) 35,000,000 100.00 % Medical device distribution Republic of Korea

(“RMC”) 25,804 100.00 % Medical device distribution

Darnatein Co., Ltd.

(“Darnatein”) 6,466,667,000 100.00 % Biotech (drug development) Republic of Korea

(“Darnatein”) 4,767,522 100.00 % Biotech (drug development)

OSR Holdings, Inc.

2,826,969 100.00 % SPAC The United States

Key financial information of the subsidiaries

at March 31, 2025 are as follows :

(“OSRI”) (*1) 2,137 100.00 % SPAC

Key financial information of

the subsidiaries at June 30, 2025 are as follows :

Name of subsidiary

2 unchanged sentences

( 9,328,446 )

of entities, which are newly included in consolidation scope for the periods ended March 31, 2025 and 2024 are as follows:

For the year ended March 31, 2025

(*1) Aforementioned above, the Company is treated as the acquired company under ASC 805 Business Combinations.

As such, it is shown as subsidiary for the subsidiary investment details.

Summaries of entities, which are newly

included in consolidation scope for the periods ended June 30, 2025 and 2024 are as follows:

For the six months ended June 30, 2025

Name of subsidiary Reason Type of purchase consideration

1 unchanged sentence

Acquisition (*2) Equity swap with shares of the Parent and OSR inc.’s share

Parent acquired subsidiary in February 2025 and accounted for the acquisitions at March 31, 2025, which is deemed the acquisition date.

(*2) The Parent acquired subsidiary in February 2025 and accounted for the acquisitions at March 31, 2025, which is deemed the acquisition date.

(2) Summary of significant accounting policies

Basis of presentation

accompanying unaudited condensed consolidated financial statements have been prepared pursuant to U.S.

generally accepted accounting

principles (US-GAAP) and reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results

of the interim periods presented, under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”).

These condensed consolidated financial statements include all adjustments consisting of only normal recurring adjustments, necessary

for a fair statement of the results of the interim periods presented.

The results of operations for the interim periods presented are

not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2024.

Certain information and note disclosures normally included in the Company’s annual audited consolidated financial statements and

accompanying notes prepared in accordance with US-GAAP have been condensed in, or omitted from, these interim financial statements.

these unaudited condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements

and related notes to the condensed consolidated financial statements for the fiscal year ended December 31, 2023 included in the Company’s

Annual Report on Form S-4 filed with the SEC on December 27, 2024.

The accompanying unaudited condensed

consolidated financial statements have been prepared pursuant to US-GAAP and reflect all adjustments which are, in the opinion of management,

necessary to a fair presentation of the results of the interim periods presented, under the rules and regulations of the United States

Securities and Exchange Commission (the “SEC”).

These condensed consolidated financial statements include all adjustments

consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented.

results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent

quarter or for the entire year ending December 31, 2025.

Certain information and note disclosures normally included in the Company’s

annual audited consolidated financial statements and accompanying notes prepared in accordance with US-GAAP have been condensed in, or

omitted from, these interim financial statements.

Accordingly, these unaudited condensed consolidated financial statements should be

read in conjunction with the audited consolidated financial statements and related notes to the audited consolidated financial statements

for the fiscal year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 22,

2025, which is presented in Korean won.

Principle of consolidation

condensed consolidated financial statements include the accounts of OSR Holdings, Inc.

The condensed consolidated financial

statements include the accounts of OSR Holdings, Inc.

and its subsidiaries.

All significant intercompany

transactions and balances have been eliminated in consolidation.

Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (VIE) or

voting interest model.

The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity,

and if so, whether the entity is a VIE.

If the Company determines it does not hold a variable interest in a VIE, it then applies the

voting interest model.

Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in

Company accounts for investments in which it has significant influence but not a controlling financial interest using the equity method

of accounting.

All significant intercompany transactions and balances have

been eliminated in consolidation.

The Company consolidates entities in

which it has a controlling financial interest based on either the variable interest entity (VIE) or voting interest model.

is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity

If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model.

voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity.

The Company accounts for investments

in which it has significant influence but not a controlling financial interest using the equity method of accounting.

Use of estimates

preparation of the condensed consolidated financial statements in conformity with US-GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed

consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Actual results could

differ from those estimates.

Significant items subject to such estimates and assumptions include allowance for credit losses, valuation

of inventories, valuation of deferred tax assets, the useful lives of equipment and vehicles, lease liabilities and right-of-use assets,

and other contingencies.

The preparation of the condensed consolidated

financial statements in conformity with US-GAAP requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements

and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ from those estimates.

items subject to such estimates and assumptions include allowance for credit losses, valuation of inventories, valuation of deferred

tax assets, the useful lives of equipment and vehicles, lease liabilities and right-of-use assets, and other contingencies.

Cash and cash equivalents

Group considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash equivalents.

The Group considers all highly liquid

financial instruments with original maturities of three months or less when purchased to be cash equivalents.

Allowance for credit losses

Group records an allowance for credit losses (ACL) under Subtopic 326-20 Financial Instruments - Credit Losses – Measured at

Amortized Cost for the current expected credit losses inherent in its financial assets measured at amortized cost and contract assets.

The ACL is a valuation account deducted from the amortized cost basis to present the net amount expected to be collected.

of expected credit losses includes expected recoveries of amounts previously written off as well as amounts expected to be written off.

The Group records an allowance for

credit losses (ACL) under Subtopic 326-20 Financial Instruments - Credit Losses – Measured at Amortized Cost for the current

expected credit losses inherent in its financial assets measured at amortized cost and contract assets.

The ACL is a valuation account

deducted from the amortized cost basis to present the net amount expected to be collected.

The estimate of expected credit losses includes

expected recoveries of amounts previously written off as well as amounts expected to be written off.

Accounts receivable

Group uses an aging schedule to estimate the ACL for trade accounts receivable.

This method categorizes trade receivables into different

groups based on industry and the number of days past due.

Past due status is measured based on the number of days since the payment due

The trade receivables are evaluated individually for expected credit losses if they no longer share similar risk characteristics.

The Group determines that the receivables no longer share similar risk characteristic if they are past due balances over 90 days

and over a specified amount.

The Group evaluates the collectability of trade accounts receivables with payments that are more than 90

days past due on an individual basis to determine if any are deemed uncollectible.

Trade accounts receivable balances are deemed uncollectible

and written off as a deduction from the allowance after all means of collection have been exhausted.

The Group uses an aging schedule to estimate

the ACL for trade accounts receivable.

This method categorizes trade receivables into different groups based on industry and the number

of days past due.

Past due status is measured based on the number of days since the payment due date.

The trade receivables are evaluated

individually for expected credit losses if they no longer share similar risk characteristics.

The Group determines that the receivables

no longer share similar risk characteristics if they are past due balances over 90 days and over a specified amount.

evaluates the collectability of trade accounts receivables with payments that are more than 90 days past due on an individual basis to

determine if any are deemed uncollectible.

Trade accounts receivable balances are deemed uncollectible and written off as a deduction

from the allowance after all means of collection have been exhausted.

Accounts receivable

receivables are recorded at the invoiced amount and do not bear interest.

Amounts collected on trade accounts receivable are included

in cash flows from operating activities in the condensed consolidated statements of cash flows.

are stated at the lower of cost or net realizable value and cost is determined by the first-in, first-out method.

Cost comprises of direct

materials and delivery costs, direct labor, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure

based on normal operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity.

Costs of purchased inventory

are determined after deducting rebates and discounts received or receivable.

in transit is stated at the lower of cost and net realizable value.

Cost comprises of purchase and delivery costs, net of rebates and

discounts received or receivable.

realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated

costs necessary to make the sale.

Accounts receivables are recorded at

the invoiced amount and do not bear interest.

Amounts collected on trade accounts receivable are included in cash flows from operating

activities in the condensed consolidated statements of cash flows.

Inventories are stated at the lower

of cost or net realizable value and cost is determined by the first-in, first-out method.

Cost comprises of direct materials and delivery

costs, direct labor, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal

operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity.

Costs of purchased inventory are determined

after deducting rebates and discounts received or receivable.

Stock in transit is stated at the lower

of cost and net realizable value.

Cost comprises purchase and delivery costs, net of rebates and discounts received or receivable.

Net realizable value is the estimated

selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the

Equipment and vehicles

and vehicles are stated at historical cost less accumulated depreciation and accumulated impairment losses.

Historical cost includes

expenditure that is directly attributable to the acquisition of the items.

of all equipment and vehicles is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual

values, over their estimated useful lives as follows:

Equipment and vehicles are stated at

historical cost less accumulated depreciation and accumulated impairment losses.

Historical cost includes expenditure that is directly

attributable to the acquisition of the items.

Depreciation of all equipment and vehicles

is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated

useful lives as follows:

Office equipment

1 unchanged sentence

3 to 13 years

assets’ depreciation method, residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting

The assets’ depreciation method,

residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Goodwill and intangible assets

represents the excess purchase price over the estimated fair value of net assets acquired in a business combination.

Group accounts for intangible assets in accordance with Accounting Standards Codification (ASC) Topic 350, Intangibles – Goodwill

and Other (ASC 350).

ASC 350 requires that intangible assets with estimable useful lives be amortized over their respective estimated

useful lives and reviewed for impairment in accordance with accounting standards.

impairment indicators are identified, the Group compares the reporting unit’s fair value to its carrying amount, including goodwill.

An impairment loss is recognized as the difference, if any, between the reporting unit’s carrying amount and its fair value, to

the extent the difference does not exceed the total amount of goodwill allocated to the reporting unit.

Indefinite-lived

intangible assets are tested for impairment annually, and more frequently when there is a triggering event.

Annually, or when there is

a triggering event, the Group first performs a qualitative assessment by evaluating all relevant events and circumstances to determine

if it is more likely than not that the indefinite-lived intangible assets are impaired;

this includes considering any potential effect

on significant inputs to determining the fair value of the indefinite-lived intangible assets.

When it is more likely than not that an

indefinite-lived intangible asset is impaired, then the Group calculates the fair value of the intangible asset and performs a quantitative

impairment test.

Impairment o f long--lived

assets, such as equipment, vehicles and intangible assets subject to amortization, are reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount of an asset may not be recoverable.

If circumstances require a long-lived asset or

asset group to be tested for possible impairment, the Group first compares undiscounted cash flows expected to be generated by that asset

or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted

cash flow basis, an impairment loss is recognized to the extent that the carrying amount exceeds its fair value.

Fair value is determined

through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals,

as considered necessary.

Group is a lessee in several noncancellable operating leases, primarily for plants and main offices.

The Group does not have a finance

Group accounts for leases in accordance with ASC Topic 842, Leases .

The Group determines if an arrangement is or contains a lease

at contract inception.

The Group recognizes a right-of-use (ROU) asset and a lease liability at the lease commencement date.

operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the

lease commencement date.

For finance leases, the lease liability is initially measured in the same manner and date as for operating leases

and is subsequently measured at amortized cost using the effective-interest method.

estimates and judgments include how the Group determines (1) the discount rate it uses to discount the unpaid lease payments to present

value, (2) lease term, and (3) lease payments.

842 requires a lessee to discount its unpaid lease payments using the interest rate implicit

in the lease or, if that rate cannot be readily determined, its incremental borrowing rate.

Generally, the Group cannot determine the interest rate implicit in the lease because it

does not have access to the lessor’s estimated residual value or the amount of the

lessor’s deferred initial direct costs.

Therefore, the Group generally uses its incremental

borrowing rate as the discount rate for the lease.

The Group’s incremental borrowing

rate for a lease is the rate of interest it would have to pay on a collateralized basis to

borrow an amount equal to the lease payments under similar terms.

Because the Group does

not generally borrow on a collateralized basis, it uses the interest rate it pays on its

noncollateralized borrowings as an input to deriving an appropriate incremental borrowing

rate, adjusted for the amount of the lease payments, the lease term, and the effect on that

rate of designating specific collateral with a value equal to the unpaid lease payments for

lease term for all of the Group’s leases includes the noncancellable period of the

lease plus any additional periods covered by either a Group option to extend (or not to terminate)

the lease that the Group is reasonably certain to exercise, or an option to extend (or not

to terminate) the lease controlled by the lessor.

payments included in the measurement of the lease liability comprise the following:

Goodwill represents the excess purchase

price over the estimated fair value of net assets acquired in a business combination.

The Group accounts for intangible assets

in accordance with Accounting Standards Codification (ASC) Topic 350, Intangibles – Goodwill and Other (ASC 350).

requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives and reviewed for

impairment in accordance with accounting standards.

When impairment indicators are identified,

the Group compares the reporting unit’s fair value to its carrying amount, including goodwill.

An impairment loss is recognized

as the difference, if any, between the reporting unit’s carrying amount and its fair value, to the extent the difference does not

exceed the total amount of goodwill allocated to the reporting unit.

Indefinite-lived intangible assets

are tested for impairment annually, and more frequently when there is a triggering event.

Annually, or when there is a triggering event,

the Group first performs a qualitative assessment by evaluating all relevant events and circumstances to determine if it is more likely

than not that the indefinite-lived intangible assets are impaired;

this includes considering any potential effect on significant inputs

to determining the fair value of the indefinite-lived intangible assets.

When it is more likely than not that an indefinite-lived intangible

asset is impaired, then the Group calculates the fair value of the intangible asset and performs a quantitative impairment test.

Impairment o f long--lived assets

Long-lived assets, such as equipment,

vehicles and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate

that the carrying amount of an asset may not be recoverable.

If circumstances require a long-lived asset or asset group to be tested

for possible impairment, the Group first compares undiscounted cash flows expected to be generated by that asset or asset group to its

carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis,

an impairment loss is recognized to the extent that the carrying amount exceeds its fair value.

Fair value is determined through various

valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered

The Group is a lessee in several non-cancellable

operating leases, primarily for plants and main offices.

The Group does not have a finance lease.

The Group accounts for leases in accordance

with ASC Topic 842, Leases .

The Group determines if an arrangement is or contains a lease at contract inception.

The Group recognizes

a right-of-use (ROU) asset and a lease liability at the lease commencement date.

For operating leases, the lease liability

is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date.

leases, the lease liability is initially measured in the same manner and date as for operating leases and is subsequently measured at

amortized cost using the effective-interest method.

Key estimates and judgments include

how the Group determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term, and (3)

lease payments.

● Topic 842 requires a lessee to discount

its unpaid lease payments using the interest rate implicit in the lease or, if that rate

cannot be readily determined, its incremental borrowing rate.

Generally, the Group cannot

determine the interest rate implicit in the lease because it does not have access to the

lessor’s estimated residual value or the amount of the lessor’s deferred initial

direct costs.

Therefore, the Group generally uses its incremental borrowing rate as the discount

rate for the lease.

The Group’s incremental borrowing rate for a lease is the rate

of interest it would have to pay on a collateralized basis to borrow an amount equal to the

lease payments under similar terms.

Because the Group does not generally borrow on a collateralized

basis, it uses the interest rate it pays on its noncollateralized borrowings as an input

to deriving an appropriate incremental borrowing rate, adjusted for the amount of the lease

payments, the lease term, and the effect on that rate of designating specific collateral

with a value equal to the unpaid lease payments for that lease.

● The lease term for all of the Group’s

leases includes the noncancellable period of the lease plus any additional periods covered

by either a Group option to extend (or not to terminate) the lease that the Group is reasonably

certain to exercise, or an option to extend (or not to terminate) the lease controlled by

● Lease payments included in the measurement

of the lease liability comprise the following:

payments, including in-substance fixed payments, owed over the lease term (includes termination

6 unchanged sentences

certain to exercise the option.

ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at

or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received.

operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus

initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.

expense for lease payments is recognized on a straight-line basis over the lease term.

assets are periodically reduced by impairment losses.

The Group uses the long-lived assets impairment guidance in ASC Subtopic 360-10,

Property, Plant, and Equipment – Overall , to determine whether an ROU asset is impaired, and if so, the amount of the impairment

loss to recognize.

Group monitors for events or changes in circumstances that require a reassessment of one of its leases.

When a reassessment results in

the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless

doing so would reduce the carrying amount of the ROU asset to an amount less than zero.

In that case, the amount of the adjustment that

would result in a negative ROU asset balance is recorded in profit or loss.

lease ROU assets are presented as operating lease right of use assets on the condensed consolidated balance sheets.

The current portion

of operating lease liabilities are presented separately on the condensed consolidated balance sheets.

Group has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less.

The Group recognizes the lease payments associated with its short-term leases as an expense on a straight-line basis over the lease term.

currency translation

Group has operations in South Korea, Switzerland, and Germany.

Accounting records in foreign operations are maintained in local currencies

and remeasured to the Korean won during the consolidation.

Nonmonetary assets and liabilities are translated at historical rates, and

monetary assets and liabilities are translated at exchange rates in effect at the end of the year.

Income statement accounts are translated

at average rates for the year.

Gains or losses from remeasurement of foreign currency financial statements into the Korean won are included

in current results of comprehensive income.

Group only has revenue from customers.

The Group recognizes revenue when it satisfies performance obligations under the terms of its

contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Group expects

to receive from its customers in exchange for those products.

This process involves identifying the customer contract, determining the

performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance

obligations in the contract, and recognizing revenue when the performance obligations have been satisfied.

A performance obligation is

considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together

with other resources that are readily available to the customer and (b) is separately identified in the contract.

The Group considers

a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability

to direct the use and obtain the benefit of the good or product.

taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences

attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective

tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected

to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred

tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

recognizes the effect of income tax positions only if those positions are more likely than not of being sustained.

Recognized income

tax positions are measured at the largest amount that is greater than 50% likely of being realized.

Valuation allowances are established

when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

in recognition or measurement are reflected in the period in which the change in judgment occurs .

The Group reports income tax-related

interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense.

value measurements

Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent

The Group determines fair value based on assumptions that market participants would use in pricing an asset or liability in

the principal or most advantageous market.

When considering market participant assumptions in fair value measurements, the following

fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

The ROU asset is initially measured

at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement

date, plus any initial direct costs incurred less any lease incentives received.

For operating leases, the ROU asset

is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus)

any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.

Lease expense for lease payments is

recognized on a straight-line basis over the lease term.

ROU assets are periodically reduced

by impairment losses.

The Group uses the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment

– Overall , to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

The Group monitors for events or changes

in circumstances that require a reassessment of one of its leases.

When a reassessment results in the remeasurement of a lease liability,

a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount

of the ROU asset to an amount less than zero.

In that case, the amount of the adjustment that would result in a negative ROU asset balance

is recorded in profit or loss.

Operating lease ROU assets are presented

as operating lease right of use assets on the condensed consolidated balance sheets.

The current portion of operating lease liabilities

are presented separately on the condensed consolidated balance sheets.

The Group has elected not to recognize

ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less.

The Group recognizes the lease payments

associated with its short-term leases as an expense on a straight-line basis over the lease term.

Foreign currency translation

The Group has operations in South Korea,

Switzerland, and Germany.

Accounting records in foreign operations are maintained in local currencies and remeasured to the US dollars

during the consolidation.

Nonmonetary assets and liabilities are translated at historical rates, and monetary assets and liabilities

are translated at exchange rates in effect at the end of the year.

Income statement accounts are translated at average rates for the

Gains or losses from remeasurement of foreign currency financial statements into the US dollars are included in current results

of comprehensive income.

Revenue recognition

The Group only has revenue from customers.

The Group recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products

is transferred to its customers in an amount that reflects the consideration the Group expects to receive from its customers in exchange

for those products.

This process involves identifying the customer contract, determining the performance obligations in the contract,

determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing

revenue when the performance obligations have been satisfied.

A performance obligation is considered distinct from other obligations

in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available

to the customer and (b) is separately identified in the contract.

The Group considers a performance obligation satisfied once it has

transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit

of the good or product.

Income taxes are accounted for under

the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences

between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss

and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income

in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities

of a change in tax rates is recognized in income in the period that includes the enactment date.

The Group recognizes the effect of income

tax positions only if those positions are more likely than not of being sustained.

Recognized income tax positions are measured at the

largest amount that is greater than 50% likely of being realized.

Valuation allowances are established when management determines it

is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

Changes in recognition or measurement

are reflected in the period in which the change in judgment occurs .

The Group reports income tax-related interest and penalties

relating to uncertain tax positions, if applicable, as a component of income tax expense.

Fair value measurements

The Group utilizes valuation techniques

that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

The Group determines fair

value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous

When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes

between observable and unobservable inputs, which are categorized in one of the following levels:

Unadjusted quoted prices in active markets for identical assets or liabilities

6 unchanged sentences

there is little, if any, market activity for the asset or liability at measurement date.

carrying value of cash and cash equivalents, trade and other receivables, inventories, prepaid expenses and other current and financial

assets, trade and other payable, short-term borrowing, current operating lease liabilities, and accrued expenses and other current liabilities

approximates their fair value due to the short-term nature of these instruments.

The carrying amount reported in the condensed consolidated

balance sheets for notes payable to related party may differ from fair value since the interest rate is fixed.

pronouncements adopted during 2024

October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers , which provides an exception to fair value measurement for contract assets and contract liabilities

related to revenue contracts acquired in a business combination.

The ASU requires an entity (acquirer) to recognize and measure contract

assets and contract liabilities acquired in a business combination in accordance with Topic 606.

At the acquisition date, an acquirer

should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

The ASU is effective

for the Company for annual and interim periods in fiscal years beginning after December 15, 2023.

The ASU is applied to business combinations

occurring on or after the effective date.

The Group adopted this ASU as of January 1, 2024 and there is no impact on the Group’s

condensed consolidated financial statements.

pronouncements issued, but not adopted as of March 31, 2025

October 2023, the FASB issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s

Disclosure Update and Simplification Initiative .

The ASU modifies the disclosure or presentation requirements of a variety of Topics

in the Codification to align with the SEC’s regulations.

The ASU also makes those requirements applicable to entities that were

not previously subject to the SEC’s requirements.

The ASU is effective for the Company two years after the effective date to remove

the related disclosure from Regulation S-X or S-K.

As of the date these financial statements have been made available for issuance, the

SEC has not yet removed any related disclosure.

The Group does not expect the adoption of ASU 2023-06 to have a material effect on its

condensed consolidated financial statements.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which

requires enhanced disclosure of significant segment expenses on an annual and interim basis.

This ASU will be effective for

the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025.

The carrying value of cash and cash

equivalents, trade and other receivables, inventories, prepaid expenses and other current and financial assets, trade and other payable,

short-term borrowing, current operating lease liabilities, and accrued expenses and other current liabilities approximates their fair

value due to the short-term nature of these instruments.

The carrying amount reported in the condensed consolidated balance sheets for

notes payable to related party may differ from fair value since the interest rate is fixed.

Compound Financial Instruments

Compound financial instruments are

convertible bonds that can be converted into equity instruments at the option of the holder.

The liability component of a compound financial

instrument is recognized initially at the fair value of a similar liability that does not have an equity conversion right and subsequently

measured at amortized cost until extinguished on conversion or maturity of the bonds.

The equity component is recognized initially on

the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component.

Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying

Accounting pronouncements adopted as of June 30, 2025

In October 2021,

the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts

with Customers , which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue

contracts acquired in a business combination.

The ASU requires an entity (acquirer) to recognize and measure contract assets and contract

liabilities acquired in a business combination in accordance with Topic 606.

At the acquisition date, an acquirer should account for

the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

The ASU is effective for the Company

for annual and interim periods in fiscal years beginning after December 15, 2023.

The ASU is applied to business combinations occurring

on or after the effective date.

The Group adopted this ASU as of January 1, 2024 and there is no impact on the Group’s condensed

consolidated financial statements.

In November 2023,

the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires enhanced

disclosure of significant segment expenses on an annual and interim basis.

This ASU will be effective for the annual periods beginning

the year ended December 31, 2024, and for interim periods beginning January 1, 2025.

Early adoption is permitted.

Upon adoption,

this ASU should be applied retrospectively to all prior periods presented in the financial statements.

The Group adopted this ASU

as of January 1, 2025 and there is not impact on the Group’s condensed consolidated financial statements.

Accounting pronouncements issued, but not adopted as of June 30, 2025

In October 2023,

the FASB issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update

and Simplification Initiative .

The ASU modifies the disclosure or presentation requirements of a variety of Topics in the Codification

to align with the SEC’s regulations.

The ASU also makes those requirements applicable to entities that were not previously subject

to the SEC’s requirements.

The ASU is effective for the Company two years after the effective date to remove the related disclosure

from Regulation S-X or S-K.

As of the date these financial statements have been made available for issuance, the SEC has not yet removed

any related disclosure.

The Group does not expect the adoption of ASU 2023-06 to have a material effect on its condensed consolidated

financial statements.

In December 2023,

the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which improves the transparency

of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation

and income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income

tax disclosures.

This ASU will be effective for the annual periods beginning the year ended December 31, 2026.

Early adoption

is permitted.

Upon adoption, this ASU should be applied retrospectively to all prior periods presented in the financial statements.

The Group does not expect the adoption of ASU 2023-07 to have a material effect on its condensed consolidated financial statements.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which improves

the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective

tax rate reconciliation and income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve

the effectiveness of income tax disclosures.

This ASU will be effective for the annual periods beginning the year ended December

Early adoption is permitted.

Upon adoption, this ASU can be applied prospectively or retrospectively.

The Group is currently

evaluating the impact this ASU will have on the Group’s consolidated financial statements.

accounting estimates and assumptions

preparation of condensed consolidated financial statements requires the Group to make estimates and assumptions concerning the future.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of

future events that are believed to be reasonable under the circumstances.

The resulting accounting estimates will, by definition, seldom

equal the related actual results.

The estimates and assumptions that have a significant risk of causing a material adjustment to the

carrying amounts of assets and liabilities within the next financial year are discussed below.

Group’s taxable income generated from these operations are subject to income taxes based on tax laws and interpretations of tax

authorities in numerous jurisdictions.

There are many transactions and calculations during the ordinary course of business for which

the ultimate tax determination is uncertain.

tax assets are recognized for deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit

will be available against which the temporary differences and the losses can be utilized.

Significant management judgement is required

to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits,

together with future tax planning strategies

combinations are initially accounted for on a provisional basis.

The fair value of assets acquired, liabilities and contingent liabilities

assumed are initially estimated by the Parent taking into consideration all available information at the reporting date.

Fair value adjustments

on the finalization of the business combination accounting is retrospective, where applicable, to the period the combination occurred

and may have an impact on the assets and liabilities, depreciation and amortization reported.

technology is recognized in Intangible assets on the condensed consolidated balance sheets.

The Group considers both qualitative and

quantitative factors when determining whether the patent technology may be impaired.

For the purposes of assessing impairment, the Group

follows its accounting policy disclosed in Note 2.

In assessing whether there is any indication that the patent technology may be impaired,

the Group considers, at minimum, the following indications:

sources of information

are observable indications that the patent technology’s value has declined during the period significantly more than would be expected

as a result of the passage of time or normal use.

● significant

changes with an adverse effect on the Group have taken place during the period, or will take place in the near future, in the technological,

market, economic or legal environment in which the entity operates or in the market to which an asset is dedicated.

interest rates or other market rates of return on investments have increased during the period, and those increases are likely to affect

the discount rate used in calculating an asset’s value in use and decrease the asset’s recoverable amount materially.

carrying amount of the net assets of the entity is more than its market capitalization.

sources of information

is available of obsolescence or physical damage of the patent technology.

● significant

changes with an adverse effect on the entity have taken place during the period, or are expected to take place in the near future, in

the extent to which, or manner in which, the patent technology is used or is expected to be used.

The Group is currently evaluating the impact this

ASU will have on the Group’s consolidated financial statements.

(3) Critical accounting estimates and assumptions

The preparation of condensed consolidated

financial statements requires the Group to make estimates and assumptions concerning the future.

Estimates and judgements are continually

evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable

under the circumstances.

The resulting accounting estimates will, by definition, seldom equal the related actual results.

The estimates

and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within

the next financial year are discussed below.

The Group’s taxable income generated

from these operations are subject to income taxes based on tax laws and interpretations of tax authorities in numerous jurisdictions.

There are many transactions and calculations during the ordinary course of business for which the ultimate tax determination is uncertain.

Deferred tax assets are recognized

for deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against

which the temporary differences and the losses can be utilized.

Significant management judgement is required to determine the amount

of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits, together with future

tax planning strategies

Business combinations

Business combinations are initially

accounted for on a provisional basis.

The fair value of assets acquired, liabilities and contingent liabilities assumed are initially

estimated by the Parent taking into consideration all available information at the reporting date.

Fair value adjustments on the finalization

of the business combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact

on the assets and liabilities, depreciation and amortization reported.

Patent technology

Patent technology is recognized in Intangible

assets on the condensed consolidated balance sheets.

The Group considers both qualitative and quantitative factors when determining whether

the patent technology may be impaired.

For the purpose of assessing impairment, the Group follows its accounting policy disclosed in

In assessing whether there is any indication that the patent technology may be impaired, the Group considers, at minimum, the

following indications:

External sources

of information

● there are observable

indications that the patent technology’s value has declined during the period significantly

more than would be expected as a result of the passage of time or normal use.

● significant changes

with an adverse effect on the Group have taken place during the period, or will take place

in the near future, in the technological, market, economic or legal environment in which

the entity operates or in the market to which an asset is dedicated.

● market interest

rates or other market rates of return on investments have increased during the period, and

those increases are likely to affect the discount rate used in calculating an asset’s

value in use and decrease the asset’s recoverable amount materially.

● the carrying amount

of the net assets of the entity is more than its market capitalization.

Internal sources

of information

● evidence is available

of obsolescence or physical damage of the patent technology.

● significant changes

with an adverse effect on the entity have taken place during the period, or are expected

to take place in the near future, in the extent to which, or manner in which, the patent

technology is used or is expected to be used.

These changes include the patent technology

becoming idle, plans to discontinue or restructure the operation to which the patent technology belongs, and plans to dispose of the

patent technology before the previously expected date.

is available from internal reporting that indicates that the economic performance of the patent technology is, or will be, worse than

(4) Financial

risk management

Group is exposed to various financial risks such as market risk (exchange risk, interest rate risk), credit risk and liquidity risk due

to various activities.

The Group’s overall risk management policy focuses on volatility in the financial markets and focuses on minimizing

any negative impact on financial performance.

Risk management is conducted under the supervision of the finance department according

to the policy approved by the Board of Directors.

The finance department identifies, evaluates and manages financial risks in close cooperation

with the sales departments.

The Board of Directors provides written policies on overall risk management principles and specific areas

such as foreign exchange risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments, and investments

in excess of liquidity.

risk management

risk is the risk of possible losses which arise from the changes of market factors, such as interest rate, stock price, foreign exchange

rate, commodity value and other market factors related to the fair value or future cash flows of the financial instruments, such as securities,

derivatives and others.

following table sets forth the result of foreign currency translation into Korean won for financial assets and liabilities denominated

in foreign currency of the Group as of March 31, 2025 and December 31, 2024:

March 31, 2025

Assets in foreign currency

Liabilities in foreign currency

December 31, 2024

Assets in foreign currency

Liabilities in foreign currency

following table sets forth the impact of strengthening (or weakening) of the Korean won by a hypothetical 10% against each foreign currency

on the Group’s after-tax profit (or loss), assuming all other variables remain constant.

March 31, 2025

December 31, 2024

$ ( 1,006,154 )

$ ( 189,147 )

rate risk refers to the risk that interest income and interest expenses arising from deposits or borrowings will fluctuate due to changes

in market interest rates in the future, which mainly arises from deposits and borrowings with floating interest rates.

The goal of interest

rate risk management is to maximize corporate value by minimizing uncertainty caused by interest rate fluctuations.

of the end of the reporting period, there are no financial instruments subject to a variable interest rate.

risk is the risk that the fair value of a financial instrument or future cash flows will change due to changes in market prices other

than interest rate or foreign exchange rate.

becoming idle, plans to discontinue or restructure the operation to which the patent technology

belongs, and plans to dispose of the patent technology before the previously expected date.

● evidence is available

from internal reporting that indicates that the economic performance of the patent technology

is, or will be, worse than expected.

(4) Financial risk management

The Group is exposed to various financial

risks such as market risk (exchange risk, interest rate risk), credit risk and liquidity risk due to various activities.

overall risk management policy focuses on volatility in the financial markets and focuses on minimizing any negative impact on financial

Risk management is conducted under the supervision of the finance department according to the policy approved by the Board

of Directors.

The finance department identifies, evaluates and manages financial risks in close cooperation with the sales departments.

The Board of Directors provides written policies on overall risk management principles and specific areas such as foreign exchange risk,

interest rate risk, credit risk, use of derivative and non-derivative financial instruments, and investments in excess of liquidity.

Market risk management

Market risk is the risk of possible

losses which arise from the changes of market factors, such as interest rate, stock price, foreign exchange rate, commodity value and

other market factors related to the fair value or future cash flows of the financial instruments, such as securities, derivatives and

Currency risk

The functional currency of the foreign

subsidiary’s operations is the local currency.

Therefore, for purposes of the condensed consolidated financial statements, the

results of foreign operations are translated from the local currency into U.S.

Local currency assets and liabilities are translated

at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange

during the period.

Resulting translation gains or losses are included in the accompanying condensed consolidated financial statements

as a component of accumulated other comprehensive loss.

Interest rate risk

Interest rate risk refers to the risk

that interest income and interest expenses arising from deposits or borrowings will fluctuate due to changes in market interest rates

in the future, which mainly arises from deposits and borrowings with floating interest rates.

The goal of interest rate risk management

is to maximize corporate value by minimizing uncertainty caused by interest rate fluctuations.

As of the end of the reporting period,

there are no financial instruments subject to a variable interest rate.

Price risk is the risk that the fair

value of a financial instrument or future cash flows will change due to changes in market prices other than interest rate or foreign

exchange rate.

As of the end of the reporting period, the Group is not exposed to commodity price risk.

Investments in financial instruments are made on a non-recurring basis according to management’s judgment.

risk management

risk is the risk of possible losses in an asset portfolio in the events of counterparty’s default, breach of contract and deterioration

in the credit quality of the counterparty.

For the risk management reporting purposes, the Group manages the credit risk systematically

and pursues value maximization and continuous growth of the Group by efficient resource allocation and monitoring non-performing loans.

In order to reduce the risks that may occur in transactions with financial institutions, such as cash and cash equivalents and various

deposits, the Group conducts transactions only with financial institutions with high creditworthiness.

As of March 31, 2025, the Group

believes that there are low signs of material default, and the maximum exposure to credit risk as of March 31, 2025 is equal to the book

value of financial instruments (excluding cash).

risk management

Group constantly monitors its liquidity positions to ensure that no borrowing limits or commitments are breached to meet operating capital

In estimating liquidity, we also take into account external laws or legal requirements, such as the group’s financing plan, compliance

with agreements, internal target financial ratios and currency restrictions.

Group’s liquidity risk analysis details as of March 31, 2025 and December 31, 2024 are as follows:

March 31, 2025

Investments in financial instruments

are made on a non-recurring basis according to management’s judgment.

Credit risk management

Credit risk is the risk of possible

losses in an asset portfolio in the events of counterparty’s default, breach of contract and deterioration in the credit quality

of the counterparty.

For the risk management reporting purposes, the Group manages the credit risk systematically and pursues value maximization

and continuous growth of the Group by efficient resource allocation and monitoring non-performing loans.

In order to reduce the risks

that may occur in transactions with financial institutions, such as cash and cash equivalents and various deposits, the Group conducts

transactions only with financial institutions with high creditworthiness.

As of June 30, 2025, the Group believes that there are low

signs of material default, and the maximum exposure to credit risk as of June 30, 2025 is equal to the book value of financial instruments

(excluding cash).

Liquidity risk management

The Group constantly monitors its

liquidity positions to ensure that no borrowing limits or commitments are breached to meet operating capital needs.

In estimating liquidity,

we also take into account external laws or legal requirements, such as the group’s financing plan, compliance with agreements,

internal target financial ratios and currency restrictions.

The Group’s liquidity risk analysis details as of

June 30, 2025 and December 31, 2024 are as follows:

June 30, 2025

Remaining maturity

2 unchanged sentences

Lease liabilities

December 31, 2024

Remaining maturity

1 unchanged sentence

Lease liabilities

risk management

includes issued capital, share premium and all other equity reserves attributable to the equity holders of the Group.

The primary objective

of the Group’s capital management is to maximize the shareholder value.

Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial

To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to

shareholders or issue new shares.

Capital risk management

Capital includes issued capital, share

premium and all other equity reserves attributable to the equity holders of the Group.

The primary objective of the Group’s capital

management is to maximize the shareholder value.

The Group manages its capital structure

and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.

To maintain or adjust

the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Group uses the debt ratio as a capital management indicator.

This ratio is calculated by dividing

total liabilities by total equity, and total liabilities and total equity are calculated based on the amounts in the Group’s consolidated

financial statements.

group’s debt ratio as of March 31, 2025 and December 31, 2024 are as follows:

This ratio is calculated by dividing total liabilities by total equity,

and total liabilities and total equity are calculated based on the amounts in the Group’s consolidated financial statements.

The group’s debt ratio as of June 30, 2025 and December

31, 2024 are as follows:

Net borrowings (A)

4 unchanged sentences

Debt ratio (A / B)

value measurements

value and fair value of financial instruments

difference between the carrying amount and fair value of the Group’s financial assets and liabilities as of March 31, 2025 and December

31, 2024 are insignificant.

value hierarchy

financial assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the

fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly

3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

values of the Group’s financial assets and liabilities as of March 31, 2025 and December

31, 2024 , which are accounted as amortized cost, are categorized as Level 3.

transfer between levels of the fair value hierarchy

is no transfer of fair value hierarchy among Level 1, Level 2 and Level 3 for the nine months ended March

31, 2025 and 2024, respectively.

(6) Financial

instruments by category

carrying value of financial instruments category as of March 31, 2025 and December 31, 2024

are as follows:

March 31, 2025

Financial assets at

(5) Fair value measurements

Book value and fair value of financial

The difference between the carrying

amount and fair value of the Group’s financial assets and liabilities as of June 30, 2025 and December 31, 2024 are insignificant.

Fair value hierarchy

All financial assets and liabilities

for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described

as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

● Level 1 - Quoted

(unadjusted) market prices in active markets for identical assets or liabilities

● Level 2 - Valuation

techniques for which the lowest level input that is significant to the fair value measurement

is directly or indirectly observable

● Level 3 - Valuation

techniques for which the lowest level input that is significant to the fair value measurement

is unobservable

Fair values of the Group’s financial

assets and liabilities as of June 30, 2025 and December 31, 2024, which are accounted as amortized cost, are categorized as Level 3.

Recurring transfer between levels

of the fair value hierarchy

Fair value hierarchy classifications

of the financial instruments that are measured at fair value level 3 as at June 30, 2025 is as follows(Null for December 31, 2024):

June 30, 2025

Recurring fair value

measurements Financial liabilities at fair value through profit or loss

Valuation Techniques and the Inputs

Valuation techniques and inputs used

in the recurring and non-recurring fair value measurements categorized within Level 3 of the fair value hierarchy as at June30, 2025

is as follows:(Null for December 31, 2024):

The Group did not change any valuation

techniques in determining the fair value, which is categorized within Level 3 of the fair value hierarchy.

June 30, 2025

Fair Value Level Valuation

Techniques Inputs

Financial liabilities at fair value through profit or loss $ 630,603 3 Tsiveriotis-

Fernandes model Stock Volatility, Risk-free rate

(6) Financial instruments by category

The carrying value of financial instruments category as

of June 30, 2025 and December 31, 2024 are as follows:

June 30, 2025

amortized cost

Financial liabilities at

liabilities at

amortized cost

Financial assets:

Cash and cash equivalents

2 unchanged sentences

Other non-current financial assets

Fianancial liabilities:

Financial liabilities:

Trade and other payables

1 unchanged sentence

Current financial liabilities

Non-current financial liabilities

Derivative liabilities

December 31, 2024

Fianancial assets:

Financial assets at

amortized cost

Financial liabilities at

liabilities at

amortized cost

Financial assets:

Cash and cash equivalents

2 unchanged sentences

Other non-current financial assets

Fianancial liabilities:

Financial liabilities:

Trade and other payables

Accrued expenses

gains or losses by financial instrument category for the three-months ended March 31, 2025 and 2024 are as follows:

three-month ended March 31, 2025

three-month ended March 31, 2024

Net gains or losses by financial instrument

category for the six months ended June 30, 2025 and 2024 are as follows:

Amortized cost:

3 unchanged sentences

Interest expense

Losses on foreign currrency transaction

Losses on foreign currrency translation

and cash equivalents

Group considers all money market funds and highly liquid financial instruments with original maturities of three months or less to be

cash equivalents.

Losses on foreign currency transaction

Losses on foreign currency translation

Financial assets measured at fair value through profit and loss:

Gains on change in fair value of financial liabilities

Losses on change in fair value of financial liabilities

(7) Cash and cash

The Group considers all money market

funds and highly liquid financial instruments with original maturities of three months or less to be cash equivalents.

Cash and cash equivalents

and other receivables, net

trade receivables are recorded at the invoiced amount and do not bear interest.

Amounts collected on trade receivables are included in

net cash provided by operating activities in the statements of cash flows.

The Group does not have any off-balance sheet credit exposure

related to its customers.

December 31, 2024

(8) Trade and other

receivables, net

All trade receivables are recorded

at the invoiced amount and do not bear interest.

Amounts collected on trade receivables are included in net cash provided by operating

activities in the statements of cash flows.

The Group does not have any off-balance sheet credit exposure related to its customers.

Trade receivables

3 unchanged sentences

(9) Inventories,

consisted of the following as of March 31, 2025 and December 31, 2024:

Inventories consisted of the following as of June 30, 2025

and December 31, 2024:

Merchandised goods

Less inventory reserves

financial assets

of other financial assets as of March 31, 2025 and December 31, 2024 are as follows:

March 31, 2025

Other financial assets

Details of other financial assets as of June 30, 2025 and

December 31, 2024 are as follows:

June 30, 2025

December 31, 2024

1 unchanged sentence

Other deposits

of other assets as of March 31, 2025 and December 31, 2024 are as follows:

March 31, 2025

Details of other assets as of June 30, 2025 and December

31, 2024 are as follows:

June 30, 2025

December 31, 2024

1 unchanged sentence

Equity method investment

of investment under the equity method are as follows:

March 31, 2025 December 31, 2024

Details of investment under the equity method are as follows:

June 30, 2025 December 31, 2024

Location Main business Ownership Book value Ownership Book value

Taction Co., LTD Korea Software development 33.3 % $ -

summarized financial information of investment under the equity method as of the closing date and for the current period is as follows:

As of and for the year ended

December 31, 2024

The summarized financial information

of investment under the equity method as of the closing date and for the current period is as follows:

As of and for the year ended December

Comprehensive

Taction Co., LTD

is no equity method valuation applied on investments in associate for the three-months ended March 31, 2025 or 2024.

was incorporated to engage in software development and IT consulting.

As no practical plan to generate revenue and maintain

going-concern basis in the foreseeable future was provided, the Parent recognized impairment loss amounting to acquisition cost.

(13) Equipment

and vehicles, net

and vehicles consist as of March 31, 2025 and December 31, 2024:

December 31, 2024

There is no equity method valuation

applied on investments in associate for the six months ended June 30, 2025 or 2024.

Taction Co., Ltd.

was incorporated

to engage in software development and IT consulting.

As no practical plan to generate revenue and maintain going-concern basis in the

foreseeable future was provided, the Parent recognized impairment loss amounting to acquisition cost.

Equipment and vehicles, net

Equipment and vehicles as of June 30, 2025 and December 31,

2024 consisted of the following:

Office equipment

3 unchanged sentences

Equipment and vehicles, net

(14) Goodwill

of goodwill for the for the three-months ended March 31, 2025 and 2024 are as follows:

For the three-months ended March 31, 2025

Business combination

Impairment loss

Effects of changes in exchange rate

For the three-months ended March 31, 2024

Business combination

Impairment loss

Effects of changes in exchange rate

Changes of goodwill for the for the

six months ended June 30, 2025 and 2024 are as follows:

For the six months ended June 30, 2025

exchange rate

For the six months ended June 30,

exchange rate

$ ( 1,183,341 )

(15) Intangible

acquired intangible assets, all of which are being amortized, have an average useful life of approximately 20 years.

Intangible assets

consist of the following as of March 31, 2025 and December 31, 2024.

For the year ended March 31, 2025

Intangible assets, net

The acquired intangible assets, all

of which are being amortized, have an average useful life of approximately 20 years.

Intangible assets consist of the following as of

June 30, 2025 and December 31, 2024.

For the six months ended June 30, 2025

useful life Gross carrying

amount Accumulated amortization Net carrying

amount Accumulated

amortization Net carrying

Technology license 20 years $ 106,021 $ 85,246 $ 20,775

2 unchanged sentences

$ 179,351,330 $ 23,761,910 $ 155,589,419

For the year ended December 31, 2024

For the six months ended December 31, 2024

useful life Gross carrying

amount Accumulated amortization Net carrying

amount Accumulated

amortization Net carrying

Technology license 20 years $ 97,828 $ 78,439 $ 19,389

2 unchanged sentences

$ 165,491,254 $ 17,434,402 $ 148,056,852

Accumulated amortization expense for intangible assets is $ 2,272,817

and $ 2,896,174 for the three-months ended March 31, 2025 and 2024, respectively.

Accumulated amortization expense for

intangible assets is $ 4,624,214 and $ 5,672,590 for the six months ended June 30, 2025 and 2024, respectively.

Short-term borrowings

The Group has a loan agreement with

Bellevue Capital Management Europe AG and as of March 31, 2025, the outstanding balance was $ 860,000 ( 3.00 % interest rate at March 31,

2025), which matures in March 2025 .

Bellevue Capital Management Europe AG and as of June 30, 2025, the outstanding balance was $ 860,000 ( 3.00 % interest rate at June 30,

2025), which matures in 2025 .

The Group has multiple loan agreements

with an individual and as of March 31, 2025, the outstanding balance was $ 1,034,657 ( 0 % interest rate at March 31, 2025), which mature

with an individual and as of June 30, 2025, the outstanding balance was $ 910,366 ( 0 % interest rate at June 30, 2025), which mature on

various dates in 2025 .

The Group has a loan agreement with

Dukseong Co.,Ltd and as of March 31, 2025, the outstanding balance was $ 800,000 ( 7.00 % interest rate

at March 31, 2025), which matures in July 2025 .

The Group has a loan agreement with

BGLSI and as of March 31, 2025, the outstanding balance was $ 1,628,000 ( 0 % interest rate at March

31, 2025), which matures in July 2025 .

The Group has a loan agreement with Duksung

Co.,Ltd and as of June 30, 2025, the outstanding balance was $ 800,000 ( 7.00 % interest rate at June 30, 2025 ), which matures in October

The Group has a loan agreement with BGLSI

and as of June 30, 2025, the outstanding balance was $ 1,528,000 ( 0 % interest rate at June 30, 2025 ), which matures in September 2025.

The Group has multiple loan agreements

with an individual and as of March 31, 2025, the outstanding balance was $ 135,000 ( 0 % interest rate

at March 31, 2025), which mature various dates in 2025 .

with an individual and as of June 30, 2025, the outstanding balance was $ 135,000 ( 0 % interest rate at June 30, 2025), which mature on

various dates in 2025 .

The Group has a convertible note agreement

with White Lion Capital and as of June 30, 2025, the outstanding balance was $ 1,098,869 ( 5.00 % interest

rate at June 30, 2025), which mature various dates in 2026 .

The Group has a loan agreement with

13 unchanged sentences

with an individual and as of December 31, 2024, the outstanding balance was $ 408,163 ( 0 % interest rate at December 31, 2024), which mature

various dates in 2025 .

on various dates in 2025 .

Details of convertible bonds issued on May 6, 2025 and

outstanding as of June 20, 2025 are as follows:

Classification

Par value USD 1,110,000

Stated interest rate 5 %

Guaranteed yield upon conversion -

Exercise price adjustments Issuance of new shares for consideration (paid-in capital increase), stock dividends and capitalization of reserves, mergers, capital reduction, stock split and consolidation, reduction of capital and stock consolidation, etc.

Conversion condition Variable Conversion Price.

At any time, and from time to time, the Holder may utilize the Variable Conversion Price for conversions of this Note into Common Stock.

The Variable Conversion Price shall be a rate per share equal to 95% multiplied by the Market Price (as defined herein) (representing a discount rate of 5%) (the “Variable Conversion Price”).

“Market Price” means the lowest daily VWAP of the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

“Trading Price” means the lowest volume-weighted average daily price as reported on the principal securities exchange or trading market where such security is quoted, listed or traded or, if no trading price of such security is available in any of the foregoing manners, the average of the trading prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc.

“Trading Day” shall mean any day on which the Common Stock is tradable for any period on the NASDAQ stock market or on the principal securities exchange or other securities market on which the Common Stock is then being quoted or traded.

The conversion right on the above convertible bonds is

classified as other financial liabilities.

Long-term debt

The Group has long-term debt agreements with individuals

and as of March 31, 2025, the total outstanding balance was $ 253,042 ( 4.6 % interest rate at March 31, 2025), which matures in 2030 .

The Group has long-term debt agreements with individuals

and as of December 31, 2024, the total outstanding balance was $ 497,615 ( 4.6 % interest rate at December 31, 2024), which matures in 2030 .

The Group has long-term debt agreements

with individuals and as of December 31, 2024, the total outstanding balance was $ 497,615 ( 4.6 % interest rate at December 31, 2024), which

matures in 2030 .

Post-employment benefits

Group maintains a defined contribution retirement benefit plan for its employees.

The Group is obligated to pay fixed contributions to

an independent fund, and the amount of future retirement benefits to be paid to employees is determined by the contributions made to

the fund, etc., and the investment income generated from those contributions.

Plan assets are managed independently from the Group’s

assets in a fund managed by a trustee.

pension plan has converted from the DB type to the DC type at the end of March 31, 2017, and is obligated to pay severance payment as

DB type which incurred before the March 31, 2017.

Meanwhile, expenses recognized by the Group in relation to

the defined contribution retirement benefit plan for the three-months ended March 31, 2025 and 2024 are $ 194,659 and $ 58,442 , respectively.

The Group maintains a defined contribution

retirement benefit plan for its employees.

The Group is obligated to pay fixed contributions to an independent fund, and the amount of

future retirement benefits to be paid to employees is determined by the contributions made to the fund, etc., and the investment income

generated from those contributions.

Plan assets are managed independently from the Group’s assets in a fund managed by a trustee.

Darnatein’s pension plan has converted

from the DB type to the DC type at the end of March 31, 2017, and is obligated to pay severance payment as DB type which incurred before

the March 31, 2017.

Meanwhile, expenses recognized by

the Group in relation to the defined contribution retirement benefit plan for the six months ended June 30, 2025 and 2024 are $ 304,579

and $ 57,530 , respectively.

Related party transactions

of March 31, 2025, the Group’s related parties are as follows:

As of June 30, 2025, the Group’s

related parties are as follows:

Type Related parties

1 unchanged sentence

Major shareholder of the Parent BCM Europe AG

Subsidiaries RSM, VAXIMM, Darnatein, OSR Holdings, Inc.

Subsidiaries RMC, VAXIMM, Darnatein, OSR Holdings Co., Ltd.

Associates Taction Co., Ltd.

Other related parties Bellevue Global Life Sciences Investors LLC

are no sales and procurement transactions and treasury transactions with related parties for the three-months ended March 31, 2025 and

The Group acquired Vaximm from BCM Europe AG in December 2022 (Transaction between entities under common control), which is disclosed

in detail in Note 27 Business combinations.

of receivables and payables from related party transactions as at March 31, 2025 and December 31, 2024 are as follows:

March 31, 2025

Related parties Short-term borrowings

Key management Individuals $ 641,323

Bellevue Global Life Sciences Acquisition Corp Other related parties $ 300,716

There are no sales and procurement

transactions and treasury transactions with related parties for the six months ended June 30, 2025 and 2024.

Details of receivables and payables from

related party transactions as of June 30, 2025 and December 31, 2024 are as follows:

June 30, 2025

Related parties Short-term

Bellevue Capital Management Europe AG Major shareholder of the Parent $ 860,000

December 31, 2024

Related parties Short-term borrowings

Related parties Short-term

Key management Individuals $ 340,136

Compensations

paid or accrued to key management of the Parent for the three months ended March 31, 2025 and 2024 are as follows:

For the three-month ended

March 31, 2025

March 31, 2024

Group’s key management includes registered directors who have important authority and responsibility for planning, operation, and

control of the Group’s business activities.

collateral or guarantee were provided for related parties and were received from related parties as of March 31, 2025 and December 31,

Compensations paid or accrued to key

management of the Parent for the six months ended June 30, 2025 and 2024 are as follows:

For the six months ended

The Group’s key management includes

registered directors who have important authority and responsibility for planning, operation, and control of the Group’s business

No collateral or guarantee were provided

for related parties and were received from related parties as of June 30, 2025 and December 31, 2024.

Administrative expenses

of administrative expenses for the three months ended March 31, 2025 and 2024 are as follows:

Details of administrative expenses

for the six months ended June 30, 2025 and 2024 are as follows:

Retirement payment

17 unchanged sentences

Advertising expenses

(21) Income taxes

assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of

the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future

taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal

of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Based upon these

considerations as of March 31, 2025 and December 31, 2024, the Company had a full valuation allowance for the net deferred tax assets

on one of its Asian subsidiaries and certain of its European subsidiaries.

Also, as of March 31, 2025 and December 31, 2024, the Company

had a partial valuation allowance offsetting certain deferred tax assets of another one of its Asian subsidiaries.

Management believes

that it is more likely than not that the Company will realize the benefits of the remaining deductible differences, net of valuation

allowances, at March 31, 2025 and December 31, 2024.

Company did not have any material uncertain tax positions, which should be recognized in the condensed consolidated financial statements

as of March 31, 2025.

In addition, the Company did not have any unrecognized tax benefits, which, if recognized, would affect the effective

tax rate for the nine months then ended.

In assessing the reliability of deferred

tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which

those temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future

taxable income, and tax planning strategies in making this assessment.

Based upon these considerations as of June 30, 2025 and December

31, 2024, the Company had a full valuation allowance for the net deferred tax assets on one of its Asian subsidiaries and certain of

its European subsidiaries.

Also, as of June 30, 2025 and December 31, 2024, the Company had a partial valuation allowance offsetting

certain deferred tax assets of another one of its Asian subsidiaries.

Management believes that it is more likely than not that the Company

will realize the benefits of the remaining deductible differences, net of valuation allowances, at June 30, 2025 and December 31, 2024.

The Company did not have any material

uncertain tax positions, which should be recognized in the condensed consolidated financial statements as of June 30, 2025.

the Company did not have any unrecognized tax benefits, which, if recognized, would affect the effective tax rate for the nine months

Loss per share

loss per share for the three months ended March 31, 2025 and 2024 are calculated as follows:

Basic loss per share for the six months

ended June 30, 2025 and 2024 are calculated as follows:

(The United States Dollar in unit and number of shares)

For the three months ended

For the six months ended

$ ( 11,061,400 )

2 unchanged sentences

Basic loss per ordinary share (A/B)

average number of ordinary shares outstanding for the three months ended March 31, 2025 and 2024 are calculated as follows:

For the three-months ended March 31

Weighted average number of ordinary

shares outstanding for the six months ended June 30, 2025 and 2024 are calculated as follows:

(Number of shares)

For the six months ended

Ordinary shares outstanding at the beginning

Changes due to business combination

Commitment shares issued for White Lion Capital

Shares issued due to ELOC

Weighted average number of ordinary shares outstanding

group’s diluted loss per share is the same as basic loss per share because there is no dilution effect.

(23) Business combinations

Parent acquired Darnatein (a novel drug development company) (referred as the “Acquiree” herein) as it executes on its business

plan to further expand its business by discovering and investing in innovative healthcare companies with cutting-edge technology and

creating operating synergies between subsidiaries.

As the Parent and the Acquiree former owners exchanged only equity interests in business

combination transactions and the acquisition-date fair value of the Parent’s equity interests could not reliably be measured, the

Parent determined the amount of goodwill by using the acquisition-date fair value of the Acquiree equity interests instead of the acquisition-date

fair value of the shares transferred.

(2022 acquisition) and Darnatein can be reasonably categorized as “(bio)platform companies” which differ from the companies

only with drug development pipelines.

Bioplatforms can be defined as biotechnologies that, once created and harnessed, allow for the

intentional and repeatable generation of multiple medicines or agricultural and sustainability products.

Both Vaximm and Darnatein are

biotech companies whose drug R&D pipelines are based on their own in-house platform technologies that are protected by either patents

or trade secrets.

According to the “hub-and-spoke” business model of OSR Holdings, the Parent has assumed the position to

either own or control the technology platforms of Vaximm and Darnatein through the Business Combinations, which means that the Parent

will be able to launch new services to external clients or create additional drug candidates by a new start-up or Joint Venture with

business partners based on their direct ownership or control over the platform technologies acquired from the Business Combinations.

Such quality would support the goodwill recognition.

of business combinations that occurred for the three months ended March 31, 2025 and 2024 are as follows:

For the year ended December 31, 2023

Acquiree Main business Acquisition date Ownership

consideration

Darnatein New drug development, etc.

March 31, 2023 100.0 % $ 81,436,889

combination in 2023 - Darnatein

of identifiable assets and liabilities and goodwill, which are recognized as the result of the acquisition of Darnatein completed during

the year ended December 31, 2023 are set forth in the table below.

Fair value of total identifiable assets:

Current assets:

Cash and cash equivalents

Trade and other receivables

Current tax assets

Non-current assets:

Equipment and vehicles

Right-of-use assets

Intangible assets

Non-current financial assets

Fair value of total identifiable liabilties:

Current liabilities:

Trade and other payables

Lease liabilities

Current other liabilities

Non-current liabilities:

Severance payment

Lease liabilities

Deferred tax liabilities

Fair value of identifiable net assets

Purchase consideraation transferred (*)

For the three months ended March 31,

2025, the Group’s condensed consolidated statement of operations included $ 146,757 of operating loss, which included $ 39,177 of

wages and salaries, from Darnatein.

The following unaudited pro forma consolidated results of operations assume that the acquisition of

Darnatein was completed as of January 1, 2023.

(Unaudited) three months ended March 31,

Total operating revenues

Net loss attributable to OSR Holdings

Diluted loss per share for the six

months ended June 30, 2025 and 2024 are calculated as follows:

(The United States Dollar in unit and number of shares)

For the six months ended

$ ( 11,056,255 )

forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods

presented, nor is it intended to be a projection of future results.

acquisition-date fair value of Darnatein was measured using the Discount Cash Flow (“DCF”) method and the Risk adjusted Net

Present Value (“r-NPV”) method by outside valuation professionals.

Key estimations and assumptions used in measuring the

fair value of Darnatein are as follows:

● 19.88 % of discount rate (Weighted Average Cost of Capital:

WACC) used in discounting operating cashflows

● Patent technology will generate operating revenue for 20 years

(*1) OSR ordinary shares issued for purchase consideration of $ 81,436,889

is 590,425 shares at $ 138 per share.

The number of OSR ordinary shares to be issued was determined based on negotiation with former owners

of Darnatein.

technology - Darnatein

of patent technology recognized from the acquisition of Darnatein that occurred during the year ended December 31, 2023 are set forth

in the table below.

Patent technology project code:

is a synthetic bio-signaling molecule that replaces BMPRII-binding segments of BMP-7, one of the bone-forming proteins, with high affinity

ActRII binding segments of Activin A, a member of the transforming growth factor β (TGF-β) superfamily along with BMP-7.

nature, endogenous BMP7 promotes chondrogenesis in damaged cartilage tissue by signaling primarily via the type II receptor BMPRII and

to a lesser extent via the activin type II receptor ActRII, which it binds with lower affinity.

DRT-101 amplifies intracellular regeneration

signaling capacity compared to natural BMP-7 and allows for regeneration and restoration of mechanically depleted cartilage cells to

normal levels.

Osteoarthritis

is the most common joint disorder in the aging population.

Although surgical treatment of osteoar-thritis can reduce pain and improve

joint mobility and function, the operative management of osteoarthritis is associated with significant cost and morbidity.

Unmet medical

needs for DRT-101 for Osteoarthritis are enormous specially with aging population.

Unique market opportunity of DRT-101 relies on novel

Mechanism of Action of DRT-101 that can lead to potential first-in-class DMOAD (Disease-Modifying Osteoarthritis Drug) in the market.

is pursuing pre-clinical studies of DRT-101 targeting osteoarthritis and plans to file Investigational New Drug Application (IND) to

Food and Drug Administration by 2025 for Phase 1 clinical trial, with aims of FDA approval by 2032.

Darnatein will seek to create

cashflow via licensing deals from the preclinical and clinical developments of its pipeline assets.

cashflow from the acquisitions for the three months ended March 31, 2025 and 2024 are as follows:

Net cash outflow arising from acquisition of Darnatein:

Cash consideration

cash and cash equivalent balances acquired

Net cash outflow arising from acquisition of VAXIMM and RMC:

Cash consideration

cash and cash equivalent balances acquired

$ ( 5,632,853 )

Weighted average number of ordinary shares outstanding (B)

Diluted loss per ordinary share (A/B)

Weighted average number of ordinary shares outstanding

for the six months ended June 30, 2025 and 2024 are calculated as follows:

(Number of shares)

For the six months ended

Ordinary shares outstanding at the beginning

Changes due to business combination

Commitment shares issued for White Lion Capital

Shares issued due to ELOC

Convertible bonds conversion effect

Weighted average number of ordinary shares outstanding

Commitment and contingencies

Group has no pending litigation cases arising in the ordinary course of business as of March 31, 2025 and December 31, 2024.

has entered into various contractual commitments related to the acquisition of VAXIMM including a future financial obligation of CHF

7,416 underlying as of March 31, 2025.

Meanwhile, both parties have agreed to remove section 6.1.3 of the license agreement that states

that in the event of the Parent’s sale to a third party, the Licensor shall reimburse the Licensee for reasonable costs and expenses

incurred in the preparation, submission, maintenance, prosecution, and enforcement process.

As of June 30, 2025, the Group is a party

to a civil action filed in the Supreme Court of the State of New York, County of New York, by Benjamin Securities, Inc., seeking approximately

$ 425,000 in alleged brokerage fees and costs, plus interest and attorneys’ fees.

As of June 30, 2025, the matter remains pending.

The Parent has entered into various contractual

commitments related to the acquisition of VAXIMM including a future financial obligation of CHF 7,416 underlying as of June 30, 2025.

Meanwhile, both parties have agreed to remove section 6.1.3 of the license agreement that states that in the event of the Parent’s

sale to a third party, the Licensor shall reimburse the Licensee for reasonable costs and expenses incurred in the preparation, submission,

maintenance, prosecution, and enforcement process.

Segment reporting

Group operates in one operating segment.

Operating segments are defined as components of an enterprise about which separate financial

information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and

assessing performance.

The Group’s CODM role is fulfilled by the Executive Leadership Team, who allocates resources and assesses

performance based upon consolidated financial information.

The geographic segments for the long-lived assets and ROU assets are disclosed

are no external customers that account for more than 10% of sales for the reporting period.

(26) Subsequent

Group has evaluated subsequent events from the balance sheet date through May 7, 2025, the date at which the condensed consolidated financial

statements were available to be issued and determined that there are no other items to disclose.

The Group operates in one operating

Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly

by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance.

CODM role is fulfilled by the Executive Leadership Team, who allocates resources and assesses performance based upon consolidated financial

The geographic segments for the long-lived assets and ROU assets are disclosed below.

There are no external customers that

account for more than 10% of sales for the reporting period.

Subsequent events

The Group has evaluated subsequent

events from the balance sheet date through August 14, 2025, the date at which the condensed consolidated financial statements were available

to be issued and determined that there are no other items to disclose, except the following:

● In July, the Group issued total of 757,500 shares

under the ELOC, to raise gross proceeds of $ 727,887 .

● In July, the Group issued total of 1,021,401

shares under the convertible note and warrant agreement with White Lion Capital, which amounted $ 990,000 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements