What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-08-14 · 178 added, 184 removed, 43 unchanged (89% of the section changed)

Management’s Discussion and Analysis of Financial Condition

and Results of Operations

References in this report (the “Quarterly Report”) to “we,”

“us” or the “Company” refer to by OSR Holdings, Inc.

References to our “management” or our “management

team” refer to our officers and directors.

The following discussion and analysis of the Company’s financial condition and

results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve

risks and uncertainties.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

References in this report (the “Quarterly

Report”) to “we,” “us” or the “Company” refer to OSR Holdings, Inc.

References to our “management”

or our “management team” refer to our officers and directors.

The following discussion and analysis of the Company’s

financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained

elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking

statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking

statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),

and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”).

We have based these forward-looking statements

on our current expectations and projections about future events.

These forward-looking statements are subject to known and unknown risks,

uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially

different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,”

“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”

This Quarterly Report on Form 10-Q includes

“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities

Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”).

We have based these forward-looking

statements on our current expectations and projections about future events.

These forward-looking statements are subject to known and

unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements

to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,”

“could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”

“continue,” or the negative of such terms or other similar expressions.

Factors that might cause or contribute to such a

discrepancy include, but are not limited to, those described in our other filings made with the U.S.

Securities and Exchange Commission

Factors that might cause or contribute to such a discrepancy

include, but are not limited to, those described in our other filings made with the U.S.

Securities and Exchange Commission (“SEC”).

Recent Developments

Strategic Roadmap for Tokenization under Regulation D Framework

in Partnership with BCM Europe AG

In July 2025, we announced our strategic roadmap for tokenizing our equity,

marking a significant step forward in the integration of blockchain-based finance with the Company's core business operations.

This initiative

is part of our broader strategy to leverage innovative financial mechanisms, including security token offerings (STO), to enhance capital

raising opportunities, increase liquidity, and create value for shareholders.

The roadmap includes a partnership with BCM Europe AG, an affiliate of

Bellevue Capital Management, LLC, under Swiss-based leadership with track records in the blockchain and digital asset space, to explore

the potential of tokenizing OSRH shares under the Regulation D framework.

This collaboration will enable OSRH to issue tokenized securities

that meet regulatory standards, allowing for greater flexibility in fundraising activities and enabling the Company to tap into new capital

This initiative aligns with OSRH’s commitment to explore novel avenues

for financing, providing the Company with the ability to more effectively manage capital while maintaining compliance with securities

While the tokenization strategy is still in its early stages, our management views it as a promising long-term initiative that

could significantly enhance the Company’s financial flexibility and increase the attractiveness of the Company to both institutional

and retail investors.

Signing of Term Sheet to Acquire Woori IO, a Pioneer in Noninvasive

Glucose Monitoring Technology

As previously disclosed in the Company’s Current Report on Form

8-K filed on July 25, 2025, we announced in July 2025 the signing of a term sheet with Woori IO Co., Ltd., a leader in noninvasive glucose

monitoring technology based out of South Korea.

Under this agreement, OSRH intends to acquire Woori IO, subject to completion of due

diligence and other conditions.

This acquisition would further strengthens OSRH’s presence in the burgeoning healthcare and medical

technology sectors, particularly in diabetes management, which is expected to see substantial growth over the next decade.

Woori IO’s proprietary noninvasive continuous glucose monitoring

(CGM) technology is poised to disrupt the current market by providing a pain-free alternative to traditional glucose monitoring methods.

The company’s platform leverages near-infrared spectroscopy (NIRS) technology, which has already demonstrated promising proof-of-concept

results from the studies conducted at the Korea University Hospital (Guro).

This acquisition represents a strategic entry into the global

CGM 1 market, which is forecast to exceed $47 billion by 2034 2 .

The acquisition, if consummated, is expected to enhance OSRH’s growth

trajectory by providing access to cutting-edge technology in a high-demand area.

Management believes that integrating Woori IO’s

noninvasive glucose monitoring solutions with OSRH’s resources will accelerate the commercialization of this technology and open

significant revenue opportunities.

The deal structure, as outlined in the term sheet, will involve the issuance of OSRH shares to Woori

IO’s stakeholders upon closing, subject to performance-based milestones (“$10 per share condition”), and will not result

in immediate dilution for existing OSRH shareholders .

Strategic Outlook

Both initiatives reflect OSRH’s ongoing commitment to enhancing

shareholder value through innovative business strategies and investments in high-growth sectors.

We will continue to evaluate and pursue

opportunities that align with our strategic vision, particularly in the areas of blockchain and healthcare technology.

As these initiatives

progress, we will provide further updates to shareholders, ensuring transparency and compliance with all relevant regulatory requirements.

1 Continuous Glucose Monitoring, 2 Market data from

gminsights.com

Result of Operations

Comparison of the Three Months Ended June 30, 2024 and 2025

Nasdaq Minimum Bid Price Deficiency Notice

On September 5, 2025, the Company received a notification from The

Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) after

the closing bid price fell below USD 1.00 per share for 30 consecutive business days.

The Company has been provided a grace period until

March 4, 2026 to regain compliance by maintaining a closing bid price of at least USD 1.00 for ten consecutive business days.

Management is actively monitoring the Company’s share price performance

and evaluating various available options to regain compliance within the applicable period, which may include corporate or capital structure

adjustments, enhanced investor communications, and other strategic measures as appropriate.

The Company intends to take all necessary

actions to maintain its continued listing on the Nasdaq Capital Market.

Annual General Meeting and Board Changes

As previously reported in the Company’s Definitive Proxy Statement

on Schedule 14A filed with the SEC on August 29, 2025 and Form 8-K filed on September 18, 2025, the Company held its annual meeting of

stockholders on September 17, 2025 (the “Annual Meeting”).

As of the record date of August 15, 2025, there were 21,585,360

shares of common stock outstanding and entitled to vote.

A total of 13,325,691 shares (approximately 61.7% of the outstanding shares)

were present in person or by proxy, constituting a quorum.

At the Annual Meeting, stockholders approved all proposals described

in the Definitive Proxy Statement, including the following:

(i) Director Proposal, (ii) Executive Compensation Proposal, (iii) Equity

Incentive Plan Proposal, and (iv) Proposal to Exceed 20% Common Share Issuance Pursuant to Nasdaq Listing Rule 5635(d).

No other matters

were submitted for stockholder vote, and each of the four proposals was approved by the stockholders.

As a result, the Board underwent

the following changes:

Reto Fierz was appointed as an Independent Director, and Jin Whan Park and Phil Geon Lee were removed.

The Board committees have been reconstituted as follows:

Audit Committee

- Reto Fierz and Hyuk Joo Jee, Compensation Committee - Seng Chin Mah, Alcide Barberis and Hyuk Joo Jee, Corporate Governance and Nominating

Committee - Seng Chin Mah and Alcide Barberis and Joong Myung Cho.

These changes reflect the Company’s ongoing commitment to strengthening

corporate governance and enhancing strategic oversight.

Definitive Agreement to Acquire Woori IO Co., Ltd.

On October 14, 2025, the Company announced that its wholly owned Korean

subsidiary, OSR Holdings Co., Ltd.

(“OSRK”), entered into a definitive share exchange agreement with Woori IO Co., Ltd.

a Korean medical-device company specializing in noninvasive glucose monitoring and biosensing technologies.

Under the agreement, WORIO will become a wholly owned subsidiary of OSRK.

WORIO shareholders will receive newly issued OSRK shares

worth KRW15bn (~$10.5m) in exchange for WORIO shares.

If, within 3 years of the share exchange, OSRH reaches at least $10 per share, OSRK

shares may be converted into OSRH common stock at a ratio of 12.96:1 or approximately 1.09 million new shares.

Following the acquisition,

WORIO will leverage OSRH's governance, global partnerships and clinical development resources to accelerate product development, enhance

supply readiness, and boost commercialization speed and efficiency

Results of Operations

Comparison of the Three and Nine Months Ended September

30, 2024 and 2025

The following tables present OSR Holdings’ statements of operations

for the three- and six-month periods ended June 30, 2024 and 2025, and percentage change between the two periods:

Three Months Ended June 30,

for the three and nine months ended September 30, 2024 and 2025, and percentage change between the two periods:

Three Months Ended September 30,

Cost of Sales

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Profit (loss) before income taxes

Six Months Ended June 30,

Nine Months Ended September 30,

Cost of Sales

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Operating loss

(10,079,178 )

(11,950,469 )

Other income (expense)

1 unchanged sentence

(10,102,570 )

Net Sales, Cost of Sales and Gross Profit

OSR Holdings’ net sales, cost of sales, and gross profit are primarily

derived from RMC, its subsidiary engaged in the distribution of medical devices.

RMC’s net sales for the three months ended June 30, 2025, increased

by $253,688, or 29%, compared to the same period in the prior year.

However, cost of sales increased by $453,226, or 70%, resulting in

a decline in gross profit of $199,539, or 86%.

This disproportionate increase in cost of sales was primarily attributable to a one-time

factor related to a change in the contractual arrangement with one of RMC’s suppliers.

Specifically, RMC transitioned from a traditional

purchase-and-resale model to a consignment-based arrangement under which only commission revenue is recognized.

As part of this transition,

RMC sold previously held inventory back to the supplier at cost, which materially impacted gross margin for the quarter.

six months ended June 30, 2025, the impact of the transaction was partially normalized.

Net sales increased by $104,735, or 6%, while

cost of sales increased by $375,389, or 28%, compared to the same period in the prior year.

As a result, gross profit decreased by $270,654,

(21,107,838 )

Net Sales, Cost of Sales, Gross Profit

OSR Holdings’ net sales, cost of sales, and gross profit are

primarily derived from RMC, its subsidiary engaged in the distribution of medical devices.

For the three months ended September 30, 2025, RMC’s net sales decreased by $195,249, or 24%, compared to the same period in the

However, cost of sales decreased by $277,889, or 43%, resulting in an increase in gross profit of $82,641, or 46%.

This improvement in profitability was driven by a change in RMC’s contractual arrangement with one of its major suppliers.

Specifically,

RMC transitioned from a traditional purchase-and-resale model to a consignment-based arrangement under which only commission revenue

is recognized.

Although the new contract was executed in April, the change began to affect revenue recognition starting in July.

expects this consignment-based model to enhance gross-margin stability in future periods.

For the nine months ended September 30, 2025, RMC’s net sales

decreased by $90,515, or 3%, while cost of sales increased by $97,500, or 5%, compared to the same period in the prior year.

gross profit decreased by $188,014, or 29%.

The decline in gross profit for the nine-month period was primarily due to the impact of the

second quarter, during which RMC sold previously held inventory back to the supplier at cost as part of the transition to the new consignment-based

This transaction temporarily depressed gross margin in the second quarter, offsetting the margin improvement realized in the third

The margin decline in the second quarter was a one-time event.

Selling, General and Administrative Expenses

For the three months ended June 30, 2025, OSR Holdings’ selling,

For the three months ended September 30, 2025, OSR Holdings’

selling, general and administrative (SG&A) expenses increased by $319,564, or 9%, compared to the same period in the prior year.

For the nine months ended September 30, 2025, OSR Holdings’ selling,

general and administrative (SG&A) expenses increased by $1,683,277, or 16%, compared to the same period in the prior year.

was primarily attributable to the completion of the Business Combination on February 14, 2025, which resulted in the consolidation of

OSR Holdings Inc.

(formerly Bellevue Life Sciences Acquisition Corp.) beginning in the second quarter.

The largest component of the increase

was higher commissions and professional fees incurred in connection with the Business Combination.

For the six months ended June 30, 2025, OSR Holdings’ selling, general

and administrative (SG&A) expenses increased by $1,363,713, or 20%, compared to the same period in the prior year.

The increase was

primarily driven by higher personnel-related expenses, including salaries, severance payments, employee benefits, bonuses, and travel

Additional SG&A expenses included amortization of intangible assets, research and development expenses, and professional service

fees, such as legal, audit, investor relations, and press release costs, as well as non-income taxes, insurance premiums, and employee

recruiting and training expenses.

The most significant drivers of the increase were personnel-related costs and professional service

Following the completion of the Business Combination on February 14,

2025, various costs associated with fulfilling public company obligations began to rise.

The increase was primarily attributable to higher

personnel-related expenses, including salaries, severance payments, employee benefits, bonuses, and travel costs.

Additional SG&A

expenses included amortization of intangible assets, research and development expenses, and professional service fees such as legal, audit,

investor relations, and press release costs, as well as non-income taxes, insurance premiums, and employee recruiting and training expenses.

The most significant drivers of the increase were personnel-related costs and professional service fees.

Research and Development (R&D) Expenses

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OSR Holdings expects to incur and report R&D related expenses mainly from its subsidiaries actively

engaged in R&D at an estimated amount of $2.5 million to $3.0 million per quarter beginning in the second half of 2025,

which could potentially increase to $5.0 million to $6.0 million per quarter.

engaged in R&D at an estimated amount of $2.5 million to $3.0 million per quarter beginning in 2026, which could potentially

increase to $5.0 million to $6.0 million per quarter.

Operating Loss

For the three months ended June 30, 2025, OSR Holdings’ operating

loss increased by $2,019,069, or 63%, compared to the same period in the prior year.

On a year-to-date basis, operating loss increased

by $1,634,368, or 25%, for the six months ended June 30, 2025.

As discussed in the section titled “Selling, General and Administrative

Expenses,” this increase was primarily attributable to the consolidation of SG&A expenses beginning in the second quarter of

2025 following the completion of the Business Combination on February 14, 2025.

For the three months ended September 30, 2025, OSR Holdings’

operating loss increased by $236,923, or 7%, compared to the same period in the prior year.

On a year-to-date basis, operating loss increased by $1,871,291, or 19%, for the nine months ended September 30, 2025.

As discussed in the section titled “Selling, General and Administrative Expenses,” this increase was primarily due to the

rise in SG&A expenses beginning in the second quarter of 2025 following the completion of the Business Combination on February 14,

Other Income (Expense)

1 unchanged sentence

interest expense, foreign exchange-related gains and losses, and other non-operating items.

For the three months ended June 30, 2025, the Company recorded net other

income of $3,979, representing an increase of $44,986 compared to net other expense of $41,007 for the same period in the prior year.

This increase was primarily attributable to the consolidation of OSR Holdings Inc.

(formerly Bellevue Life Sciences Acquisition Corp.)

beginning in the second quarter of 2025, following the completion of the business combination on February 14, 2025.

For the six months ended June 30, 2025, net other expenses increased significantly

by $8,377,168, from $93,841 in the prior-year period to $8,471,009.

This substantial increase was primarily driven by the one-time recognition

of approximately $8.5 million in merger-related expenses incurred in connection with the business combination that closed on February

For the three months ended September 30, 2025, the Company recorded net other expenses of $686,361, representing an increase of $756,809

compared to the same period in the prior year.

The primary drivers of this increase were the loss on change in fair value of financial

liabilities and higher interest expense.

For the nine months ended September 30, 2025, net other expenses increased

significantly to $9,157,369 from $23,392 in the prior-year period, an increase of $9,133,977.

This substantial increase was primarily

due to the one-time recognition of approximately $8.5 million in merger-related expenses incurred in connection with the Business Combination

completed on February 14, 2025.

Loss Before Income Taxes

For the three months ended June 30, 2025, OSR Holdings’ loss before

income taxes increased by $1,974,083, or 61%, compared to the same period in the prior year.

As previously discussed, the increase was

primarily attributable to the consolidation of OSR Holdings Inc.

(formerly Bellevue Life Sciences Acquisition Corp.) beginning in the

second quarter of 2025 following the completion of the business combination on February 14, 2025.

For the six months ended June 30, 2025, loss before income taxes increased

by $10,011,536, or 152%, compared to the same period in the prior year, primarily due to the one-time recognition of approximately $8.5

million in merger-related expenses incurred in connection with the business combination that closed on February 14, 2025.

For the three months ended September 30, 2025, OSR Holdings’

loss before income taxes increased by $993,732, or 28%, compared to the same period in the prior year.

As previously discussed, this increase

was primarily attributable to higher expenses incurred following the completion of the Business Combination on February 14, 2025.

For the nine months ended September 30, 2025, loss before income taxes

increased by $11,005,268, or 109%, compared to the same period in the prior year.

This increase was primarily due to the one-time recognition

of approximately $8.5 million in merger-related expenses incurred in connection with the Business Combination completed on February 14,

Liquidity and Capital Resources

Since its inception through June 30, 2025, OSR Holdings has incurred significant

operating losses and negative cash flows from operating activities.

The Company recorded an operating loss of approximately $6.5 million

for the six months ended June 30, 2024, and approximately $8.1 million for the same period in 2025.

As of June 30, 2025, OSR Holdings

had an accumulated deficit of approximately $30.2 million.

Since its inception through September 30, 2025, OSR Holdings has incurred

significant operating losses and negative cash flows from operating activities.

The Company recorded an operating loss of approximately

$10.08 million for the nine months ended September 30, 2024, and approximately $11.95 million for the same period in 2025.

As of September

30, 2025, OSR Holdings had an accumulated deficit of approximately $32.33 million.

To date, OSR Holdings has funded its operations primarily through the

1 unchanged sentence

by its subsidiary, RMC.

As of June 30, 2025, the Company had cash and cash equivalents of approximately $1.58 million, consisting primarily

of bank deposits.

As of September 30, 2025, the Company had cash and cash equivalents of approximately $2.18 million, consisting

primarily of bank deposits.

The Company incurred significant expenses in connection with the business

1 unchanged sentence

for operations and created an urgent need for additional capital.

In response, in February 2025, OSR Holdings entered into an equity

line of credit (“ELOC”) agreement with an investor, providing for up to $80 million in potential capital.

Through June 30,

2025, the Company issued a total of 10,000 shares under the ELOC, raising $14,050 in gross proceeds.

Subsequently in July, the Company issued a further 757,500 shares under

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

This brings the total proceeds under the facility to $741,937.

OSR Holdings expects to

continue utilizing the ELOC to secure additional financing for its ongoing operations.

As of June 30, 2025, the Company had consolidated

cash and cash equivalents of approximately $1.58 million, primarily held in bank deposits.

In response, in February 2025, OSR Holdings entered into an equity line

of credit (“ELOC”) agreement with an investor, providing for up to $80 million in potential capital.

As of September 30, 2025,

the Company had issued a total of 767,500 shares under the ELOC, raising gross proceeds of $741,937.

In addition, the Company has executed

or is exploring various financing initiatives through the issuance of warrants and notes.

OSR Holdings expects to continue utilizing the ELOC and other available

financing instruments to secure additional capital for its ongoing operations.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities which would be considered off-balance sheet

arrangements as of June 30, 2025.

We do not participate in transactions that create relationships with unconsolidated entities or financial

partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet

arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities,

guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

We have no obligations, assets or liabilities

which would be considered off-balance sheet arrangements as of September 30, 2025.

We do not participate in transactions that

create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would

have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet

financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating

lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay an affiliate of Bellevue Capital Management,

LLC (“BCM”) a monthly fee of $7,500, for office space, utilities and secretarial and administrative support.

We began incurring

these fees on March 1, 2023, and they continue following the consummation of our business combination in February 2025.

Chardan Capital Markets, LLC (“Chardan”) is entitled to a

deferred underwriting commission of $2,070,000, payable as of June 30, 2025.

In addition, we incurred deferred legal fees of approximately

$1.25 million that were payable upon consummation of our initial business combination.

The holders of the founder shares, equity participation shares, placement

units, and units that may be issued upon conversion of working capital loans (and in each case holders of their component securities,

as applicable) are entitled to registration rights pursuant to the registration rights agreement.

These holders are entitled to make

up to two demands, excluding short form registration demands, that we register such securities for sale under the Securities Act.

addition, these holders will have “piggyback” registration rights to include their securities in other registration statements

We do not have any long-term debt, capital lease

obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay an affiliate of

Bellevue Capital Management, LLC (“BCM”) a monthly fee of $7,500, for office space, utilities and secretarial and administrative

We began incurring these fees on March 1, 2023, and they continue following the consummation of our business combination

in February 2025.

Chardan Capital Markets, LLC (“Chardan”)

is entitled to a deferred underwriting commission of $2,070,000, payable as of September 30, 2025.

In addition, we incurred deferred legal

fees of approximately $1.25 million that were payable upon consummation of our initial business combination.

The holders of the founder shares, equity participation

shares, placement units, and units that may be issued upon conversion of working capital loans (and in each case holders of their component

securities, as applicable) are entitled to registration rights pursuant to the registration rights agreement.

These holders are entitled

to make up to two demands, excluding short form registration demands, that we register such securities for sale under the Securities Act.

In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements

We will bear the expenses incurred in connection with the filing of any such registration statements.

3 unchanged sentences

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity

with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements,

and income and expenses during the periods reported.

The preparation of financial statements and related

disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates

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

of the financial statements, and income and expenses during the periods reported.

Actual results could materially differ from those estimates.

We have not identified

any critical accounting estimates.

We have not identified any critical accounting estimates.

Quantitative and Qualitative Disclosures About Market

We are a smaller reporting company as defined in Rule 12b-2 of

the Exchange Act and are not required to provide the information otherwise required under this item.

We are a smaller reporting company as defined

in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

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 2. Management’s Discussion and Analysis