OSR Health, Inc. 10-Q

Item 1. Financial Statements OSR HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In the United States Dollar, except share data) (Unaudited) (Unaudited) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 2,177,309 $ 341,543 Trade and other receivables, less allowance for credit losses of $ 65,170.95 and $ 67,579.81 as of September 30, 2025 and December 31, 2024, respectively 533,929 933,824 Inventories, net 185,095 922,107 Prepaid income taxes 3 39 Other current financial assets 57,053 54,422 Other current assets 250,825 74,555 Total current assets 3,204,215 2,326,489 Equipment and vehicles, net 98,109 2,334 Operating lease right-of-use assets, net 50,371 78,484 Intangible assets, net 148,152,920 148,056,852 Goodwill 25,531,648 24,354,066 Other non-current financial assets 170,963 329,252 Deferred tax assets 81,303 92,101 Total assets $ 177,289,528 $ 175,239,579 Liabilities and Stockholders’ Equity 　 　 Current liabilities: 　 　 Short-term borrowing $ 1,859,897 $ 1,799,796 Short-term corporate bond 2,469,959 0 Trade and other payables 7,663,482 1,078,760 Accrued expenses 977,446 459,883 Operating lease liabilities-current 38,796 44,741 Other current liabilities 963,317 79,777 Income taxes payable 358,333 255 Derivative liabilities 700,777 0 Total current liabilities 15,032,007 3,463,212 Long-term debt 0 497,615 Operating lease liabilities- non-current 11,574 33,372 Other non-current liabilities 1,737 1,657 Deferred tax liabilities 28,086,365 28,035,508 Total liabilities 43,131,683 32,031,364 　 　 Stockholders’ equity: 　 　 Common stock, $ 0.0001 par value, Authorized 100,000,000 shares; 23,671,217 shares and 2,155,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 2,367 216 Additional paid-in capital 109,548,746 162,606,449 Accumulated deficit ( 32,327,645 ) ( 19,173,063 ) Accumulated other comprehensive income 4,721,717 ( 225,386 ) Non-controlling interests 52,212,660 0 Total stockholders’ equity 134,157,845 143,208,215 Total liabilities and stockholders’ equity $ 177,289,528 $ 175,239,579 The accompanying notes are an integral part of the condensed consolidated financial statements. 1 OSR HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (In the United States Dollar) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Net sales $ 627,747 $ 822,996 $ 2,524,536 $ 2,615,051 Cost of sales 366,014 643,903 2,061,335 1,963,835 Gross profit 261,734 179,093 463,201 651,215 Selling, general, and administrative expenses 4,065,199 3,745,635 12,413,670 10,730,393 Operating loss ( 3,803,465 ) ( 3,566,542 ) ( 11,950,469 ) ( 10,079,178 ) Other income (expense): 　 　 　 　 Interest income 18,474 1,442 47,364 11,448 Interest expense ( 43,866 ) ( 9,114 ) ( 97,194 ) ( 24,729 ) Other income 24,250 82,221 218,950 95,958 Other expenses ( 685,218 ) ( 4,101 ) ( 9,326,489 ) ( 106,069 ) Loss before income taxes ( 4,489,826 ) ( 3,496,094 ) ( 21,107,838 ) ( 10,102,570 ) Income tax benefit 1,294,952 139,560 1,294,952 1,113,183 Net loss $ ( 3,194,874 ) $ ( 3,356,533 ) $ ( 19,812,886 ) $ ( 8,989,387 ) Attributable to: 　 　 　 　 OSR Holdings, Inc. and subsidiaries ( 2,126,595 ) ( 3,356,533 ) ( 13,187,995 ) ( 8,989,387 ) Non-controlling interests ( 1,068,279 ) 0 ( 6,624,892 ) 0 Other comprehensive income for the year, net of tax 　 　 　 　 Gain(loss) on foreign currency translation ( 2,257,789 ) 104 4,947,103 23,678 Total comprehensive loss for the year ( 5,452,663 ) ( 3,356,430 ) ( 14,865,783 ) ( 8,965,709 ) Attributable to: 　 　 　 　 OSR Holdings, Inc. and subsidiaries ( 3,629,440 ) ( 3,356,430 ) ( 9,895,069 ) ( 8,965,709 ) Non-controlling interests ( 1,823,223 ) 0 ( 4,970,715 ) 0 Loss per share attributable to OSR Holding, Inc. and subsidiaries 　 　 　 　 Basic loss per ordinary share $ ( 0.10 ) $ ( 1.56 ) $ ( 0.76 ) $ ( 4.17 ) The accompanying notes are an integral part of the condensed consolidated financial statements. 2 OSR HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) (In the United States Dollar) Common stock Additional paid-in Retained Earnings (accumulated Accumulated other comprehensive Non- controlling Total stockholders’ Shares Amounts capital deficit) Income (loss) interests equity Balance at January 1, 2024 5,622,954 $ 640 106,896,221 $ ( 10,496,810 ) $ 131,022 $ — $ 96,531,073 Net loss — — — ( 5,632,853 ) — — ( 5,632,853 ) Foreign currency translation adjustment — — — — 23,575 — 23,575 Balance at June 30, 2024 5,622,954 $ 640 106,896,221 $ ( 16,129,663 ) $ 154,597 $ — $ 90,921,794 Balance at July 1, 2024 5,622,954 $ 640 106,896,221 $ ( 16,129,663 ) $ 154,597 $ — $ 90,921,794 Net loss — — — ( 3,356,533 ) — — ( 3,356,533 ) Foreign currency translation adjustment — — — — 104 — 104 Balance at September 30, 2024 5,622,954 $ 640 106,896,221 $ ( 19,486,197 ) $ 154,701 $ — $ 87,565,364 Balance at January 1, 2025 2,155,000 $ 216 162,606,449 $ ( 19,173,063 ) $ ( 225,386 ) $ — $ 143,208,215 Net loss — — — ( 11,061,400 ) — ( 5,556,612 ) ( 16,618,012 ) Changes in Exercise tax — — — 57,213 — — 57,213 Foreign currency translation adjustment — — — — 7,204,892 4,484,754 11,689,646 Business Combination 17,121,978 1,712 ( 56,524,226 ) — — 56,522,514 — Issuance of share capital 529,481 53 ( 813,998 ) — — — 814,051 Balance at June 30, 2025 19,806,459 $ 1,981 106,896,221 $ ( 30,177,250 ) $ 6,979,506 $ 55,450,656 $ 139,151,113 Balance at July 1, 2025 19,806,459 $ 1,981 106,896,221 $ ( 30,177,250 ) $ 6,979,506 $ 55,450,656 $ 139,151,113 Net loss — — — ( 2,126,595 ) — ( 1,068,279 ) ( 3,194,874 ) Foreign currency translation adjustment — — — ( 23,800 ) ( 2,257,789 ) ( 2,169,716 ) ( 4,451,305 ) Issuance of share capital 3,864,758 386 2,652,525 — — — 2,652,911 Balance at September 30, 2025 23,671,217 2,367 109,548,746 ( 32,327,645 ) 4,721,717 52,212,660 134,157,845 The accompanying notes are an integral part of the condensed consolidated financial statements. 3 OSR HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In the United States Dollar) Nine months ended September 30, 2025 2024 Cash flows from operating activities: Net loss $ ( 19,812,886 ) $ ( 8,989,387 ) Adjustments to reconcile net loss to cash used in operating activities: Income tax benefit ( 1,294,952 ) ( 1,113,183 ) Depreciation 894 47,849 Amortization 7,010,647 8,488,493 Loss on inventory valuation ( 8,891 ) 1,346 Loss on disposal of tangible assets - 3,477 Lease expense 40,346 - Bad debts ( 5,634 ) 26,322 Severance pay 178,137 75,301 Commissions and professional fees 626,890 - Loss on change in fair value of financial liabilities 518,686 - Merger and acquisiton costs 8,703,455 - Loss on foreign currency translation 54,934 54,323 Gain on change in fair value of financial liabilities ( 24,200 ) - Gain on foreign currency translation ( 125,410 ) ( 54,256 ) Changes in operating assets and liabilities: Decrease in trade and other receivables 461,201 154,158 Decrease in inventories, net 784,631 271,945 Increase in prepaid income taxes - ( 547 ) Increase in other current financial assets ( 8,551 ) - Decrease (increase) in other current assets 30,208 ( 10,786 ) Decrease in ROU assets - 22,092 Decrease in trade and other payables ( 584,752 ) ( 592,844 ) Increase in accrued expenses 286,720 23,447 Decrease in lease liabilities ( 40,346 ) ( 59,553 ) Increase (decrease) in tax payables 26,525 ( 13,212 ) Decrease in other liabilities ( 75,693 ) ( 3,429 ) Net cash used in operating activities ( 3,258,041 ) ( 1,668,444 ) Cash flows from investing activities: Decrease in deposits - 8,388 Decrease in short-term loan - 702,008 Decrease in long-term loan 246,037 - Disposal of equipment and vehicles 1,029 6,056 Purchase of tangible assets ( 96,871 ) - Increase in deposits ( 354 ) ( 7,392 ) Increase in long-term loan ( 1,452,275 ) ( 17,637 ) Increase in cash and cash equivalents from business combination 1,232,969 - Net cash provided by investing activities ( 69,465 ) 691,423 Cash flows from financing activities: Proceeds from long-term debt - 238,619 Proceeds from short-term borrowing 2,089,031 1,284,822 Repayment of long-term debt ( 517,766 ) - Repayment of short-term borrowing ( 423,477 ) ( 660,622 ) Issuance of convertible bonds 1,087,780 - Repayment of convertible bonds ( 464,026 ) - Proceeds from issuance of common stock 3,385,038 - Net cash provided by financing activities 5,156,580 862,818 Net change in cash and cash equivalents 1,829,076 ( 114,201 ) Effects of changes in exchange rate on cash and cash equivalents 6,693 96,993 Cash and cash equivalents at beginning of year 341,543 540,207 Cash and cash equivalents at end of year $ 2,177,309 $ 522,997 Supplemental disclosures of cash flow information: Cash paid for interest $ 97,803 $ 37,311 Cash paid for income taxes (net of refunds received) ( 26,525 ) 13,765 The accompanying notes are an integral part of the condensed consolidated financial statements. 4 OSR HOLDINGS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS September 30, 2025 and 2024 (UNAUDITED) (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 (formerly known as Bellevue Life Sciences Acquisition Corp. 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 (the “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. or BLAC” 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 OSR Holdings, Inc’s identifiable net assets acquired represented compensation for the service of a stock exchange listing for its shares and was expensed as incurred. 5 Details of shareholders as of September 30, 2025 are as follows: Name of Shareholder Number of ordinary share Percentage of ownership Bellevue Global Life Sciences Investors LLC 1,332,500 5.63 % BCM Europe AG 8,612,634 36.38 % Bellevue Capital Management LLC 3,123,970 13.20 % Duksung Co.,Ltd. 1,420,215 6.00 % Others 9,181,898 38.79 % Total 23,671,217 100.00 % As of September 30, 2025, there were 23,671,217 shares of the registrant’s common stock outstanding. Details of investments in subsidiaries as of September 30, 2025 are as follows: Name of subsidiary Share capital Percentage of ownership Principal activities VAXIMM AG (“VAXIMM”) $ 778,208 100.00 % Biotech (drug development) RMC Co., Ltd. (“RMC”) 24,961 100.00 % Medical device distribution Darnatein Co., Ltd. (“Darnatein”) 4,611,801 100.00 % Biotech (drug development) OSR Holdings, Inc. ("OSRI") (*1) 2,450 N/A SPAC Key financial information of the subsidiaries at September 30, 2025 are as follows : Name of subsidiary Asset Liability Equity Sales Net Income(loss) VAXIMM AG $ 638,405 $ 275,103 $ 363,302 $ 74,031 $ ( 206,841 ) RMC Co.,Ltd 1,342,303 1,123,849 218,453 2,450,506 ( 490,105 ) Darnatein Co.,Ltd 170,206 907,976 ( 737,770 ) - ( 287,890 ) OSR Holdings, Inc. (*1) 3,487,130 11,197,024 ( 7,709,894 ) - ( 2,945,469 ) (*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 September 30, 2025 and 2024 are as follows: For the nine months ended September 30, 2025 Name of subsidiary Reason Type of purchase consideration OSR Holdings, Inc. Acquisition (*2) Equity swap with shares of the Parent and OSR Holdings, Inc.’s share (*2) The Parent acquired subsidiary in February 2025 and accounted for the acquisitions at March 31, 2025, which is deemed the acquisition date. 6 (2) Summary of significant accounting policies a. Basis of presentation 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. 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, 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. b. Principle of consolidation 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. The 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 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. c. Use of estimates 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. 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. d. Cash and cash equivalents The Group considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash equivalents. e. Allowance for credit losses 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. 7 Accounts receivable 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 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. f. Accounts receivable 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. g. Inventories 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 of 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 sale. h. Equipment and vehicles 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: Estimated useful lives Vehicle 5 years Office equipment 5 years Facility equipment 3 to 13 years The assets’ depreciation method, residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. i. Goodwill and intangible assets 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). 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. 8 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. j. 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 necessary. k. Leases The Group is a lessee in several noncancellable 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. 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. 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. 9 ● 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 the lessor. ● Lease payments included in the measurement of the lease liability comprise the following: – Fixed payments, including in-substance fixed payments, owed over the lease term (includes termination penalties the Group would owe if the lease term reflects the Group’s exercise of a termination option); – Variable lease payments that depend on an index or rate, initially measured using the index or rate at the lease commencement date; – Amounts expected to be payable under a Group-provided residual value guarantee; and – The exercise price of a Group option to purchase the underlying asset if the Group is reasonably certain to exercise the option. 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. 10 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. l. 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 year. Gains or losses from remeasurement of foreign currency financial statements into the US dollars are included in current results of comprehensive income. m. 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. n. Income taxes 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. 11 o. 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 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: – Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. – Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. – Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. 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. p. 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 amounts. q. Accounting pronouncements adopted as of September 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. 12 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. r. Accounting pronouncements issued, but not adopted as of September 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 can be applied prospectively or retrospectively. 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. 13 Income taxes 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 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: 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. ● evidence is available from internal reporting that indicates that the economic performance of the patent technology is, or will be, worse than expected. 14 (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. 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. 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 others. a. 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. dollars. 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. b. 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. c. Price risk 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. 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 September 30, 2025, the Group believes that there are low signs of material default, and the maximum exposure to credit risk as of September 30, 2025 is equal to the book value of financial instruments (excluding cash). 15 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 September 30, 2025 and December 31, 2024 are as follows: September 30, 2025 Remaining maturity Book Value Cashflow by contract Within a year 1 year to 3 years More than 3 years Financial liabilities $ 5,030,633 $ 5,075,737 $ 5,075,737 $ - $ - Other Payables 8,640,928 9,269,662 8,973,623 296,038 - Lease liabilities 50,371 68,464 48,139 20,325 - Total $ 13,721,931 $ 14,413,863 $ 14,097,499 $ 316,363 $ - December 31, 2024 Remaining maturity Book Value Cashflow by contract Within a year 1 year to 3 years More than 3 years Borrowings $ 2,297,411 $ 2,423,008 $ 1,840,406 $ 35,048 $ 547,555 Other Payables 1,538,643 1,538,643 1,538,643 - - Lease liabilities 80,848 93,537 48,980 44,558 - Total $ 3,916,903 $ 4,055,188 $ 3,428,028 $ 79,605 $ 547,555 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. The group's debt ratio as of September 30, 2025 and December 31, 2024 are as follows: September 30, 2025 December 31, 2024 Net borrowings (A) Borrowings $ 5,030,633 $ 2,297,411 Lease liabilities 50,371 78,113 Less: cash and cash equivalents ( 2,177,309 ) ( 341,543 ) 2,903,694 2,033,981 Total equity (B) 134,157,845 143,208,215 Debt ratio (A / B) 2.2 % 1.4 % 16 (5) Fair value measurements Book value and fair value of financial instruments The difference between the carrying amount and fair value of the Group's financial assets and liabilities as of September 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 September 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 September 30, 2025 is as follows(Null for December 31, 2024): September 30, 2025 Level 1 Level 2 Level 3 Total Recurring fair value measurements Financial liabilities at fair value through profit or loss $ - $ - $ 700,777 $ 700,777 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 September 30, 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. September 30, 2025 Fair Value Level Valuation Techniques Inputs Financial liabilities at fair value Tsiveriotis- through profit or loss $ 630,603 3 Fernandes model Stock Volatility, Risk-free rate 17 (6) Financial instruments by category The carrying value of financial instruments category as of September 30, 2025 and December 31, 2024 are as follows: September 30, 2025 Financial assets: Financial assets at amortized cost Financial liabilities at fair value Financial liabilities at amortized cost Total Cash and cash equivalents $ 2,177,309 $ - $ - $ 2,177,309 Trade and other receivables 533,929 - - 533,929 Other current financial assets 57,053 - - 57,053 Other non-current financial assets 170,963 - - 170,963 Fianancial liabilities: Trade and other payables - - 7,663,482 7,663,482 Accrued expenses - - 977,446 977,446 Current financial liabilities - - 4,329,856 4,329,856 Derivative liabilities - 700,777 - 700,777 December 31, 2024 Financial assets: Financial assets at amortized cost Financial liabilities at fair value Financial liabilities at amortized cost Total Cash and cash equivalents $ 341,543 $ - $ - $ 341,543 Trade and other receivables 933,824 - - 933,824 Other current financial assets 54,422 - - 54,422 Other non-current financial assets 329,252 - - 329,252 Fianancial liabilities: Trade and other payables - - 1,078,760 1,078,760 Accrued expenses - - 459,883 459,883 Borrowings - - 2,297,411 2,297,411 Net gains or losses by financial instrument category for the nine months ended September 30, 2025 and 2024 are as follows: For the nine months ended September 30, 2025 For the nine months ended September 30, 2024 Amortized cost: Interest income $ 47,364 $ 11,448 Foreign exchange gains 25,941 32,948 Gains on foreign currency translation 125,410 54,256 Interest expense ( 97,194 ) ( 24,729 ) Losses on foreign currency transaction ( 47,356 ) ( 42,442 ) Losses on foreign currency translation ( 56,949 ) ( 54,323 ) Financial assets measured at fair value through profit and loss: Gains on change in fair value of financial liabilities 24,200 - Losses on change in fair value of financial liabilities ( 518,686 ) - 18 (7) Cash and cash equivalents The Group considers all money market funds and highly liquid financial instruments with original maturities of three months or less to be cash equivalents. September 30, 2025 December 31, 2024 Cash and cash equivalents $ 2,177,309 $ 341,543 (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. September 30, 2025 December 31, 2024 Trade receivables $ 554,352 $ 972,036 Less: Allowance for credit losses ( 65,171 ) ( 67,580 ) Net trade receivables 489,181 904,456 Other receivables 44,748 29,368 Total $ 533,929 $ 933,824 (9) Inventories, net Inventories consisted of the following as of September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Merchandised goods $ 205,089 $ 949,724 Less inventory reserves ( 19,994 ) ( 27,617 ) $   185,095 $ 922,107 (10) Other financial assets Details of other financial assets as of September 30, 2025 and December 31, 2024 are as follows: September 30, 2025 December 31, 2024 Current Non-current Current Non-current Leasehold guarantee deposits $ 57,053 $ 23,485 $ 54,422 $ 21,669 Other deposits - 1,498 - 1,088 Loan - 145,980 - 306,494 Total $ 57,053 $ 170,963 $ 54,422 $ 329,252 19 (11) Other assets Details of other assets as of September 30, 2025 and December 31, 2024 are as follows: September 30, 2025 December 31, 2024 Current Non-current Current Non-current Prepayments $ 94,269 $ - $ 53,908 $ - Prepaid expenses 156,557 - 20,646 - Total $ 250,825 $ - $ 74,555 $ - (12) Equity method investment Details of investment under the equity method are as follows: September 30, 2025 December 31, 2024 Location Main business Ownership Book value Ownership Book value Taction Co., LTD Korea Software development 33.3 % $ - 33.3 % $ - 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 31,2024 Comprehensive Assets Liabilities Revenue Net loss loss Taction Co., LTD $ 97,936 $ 32,785 $ - $ ( 74,740 ) $ ( 74,740 ) There is no equity method valuation applied on investments in associate for the nine months ended September 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. (13) Equipment and vehicles, net Equipment and vehicles consist as of September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Office equipment $ 35,957 $ 26,912 Tools and instruments 23,784 22,687 Machinery and equipment 23,327 22,251 Facilities 206,906 210,613 Vehicles 9,828 9,375 Construction in progress 89,859 - 389,661 291,838 Less accumulated depreciation ( 291,552 ) ( 289,504 ) Equipment and vehicles, net $ 98,109 $ 2,334 20 (14) Goodwill Changes of goodwill for the nine months ended September 30, 2025 and 2024 are as follows: For the nine months ended September 30, 2025 Beginning Business combination Impairment loss Effects of changes in exchange rate Ending Goodwill $ 24,354,066 $ - $ - $ 1,177,582 $ 25,531,648 For the nine months ended September 30, 2024 Beginning Business combination Impairment loss Effects of changes in exchange rate Ending Goodwill $ 27,765,222 $ - $ - $ ( 1,183,341 ) $ 26,581,881 (15) 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 September 30, 2025 and December 31, 2024. As of September 30, 2025 Average useful life Gross carrying amount Accumulated amortization Net carrying amount Technology license 20 years $ 102,558 $ 82,878 $ 19,680 Customer relationship 20 years 607,108 333,910 273,199 Patent technology 20 years 172,783,518 24,923,477 147,860,041 $ 173,493,185 $ 25,340,265 $ 148,152,920 As of December 31, 2024 Average useful life Gross carrying amount Accumulated amortization Net carrying amount Technology license 20 years $ 97,828 $ 78,439 $ 19,389 Customer relationship 20 years 579,107 231,643 347,464 Patent technology 20 years 164,814,319 17,124,320 147,690,000 $ 165,491,254 $ 17,434,402 $ 148,056,852 Accumulated amortization expense for intangible assets is $ 7,010,647 and $ 8,488,493 for the nine months ended September 30, 2025 and 2024, respectively. 21 (16) Short-term borrowings The Group has a loan agreement with BCM Europe AG and as of September 30, 2025, the outstanding balance was $ 860,000 ( 3.00 % interest rate at September 30, 2025), which matures in 2025 . The Group has multiple loan agreements with individuals and as of September 30, 2025, the outstanding balance was $ 999,897 ( 0 % interest rate at September 30, 2025), which mature various dates in 2025 . The Group has a loan agreement with Duksung Co.,Ltd and as of September 30, 2025, the outstanding balance was $ 800,000 ( 5.00 % interest rate at September 30, 2025), which matures in October 2025 . Refer to Note 25 Subsequent events for more details. The Group has a loan agreement with BGLSI and as of September 30, 2025, the outstanding balance was $ 1,278,000 ( 0 % interest rate at September 30, 2025 ), which matures in 2025. The Group has multiple loan agreements with an individual and as of September 30, 2025, the outstanding balance was $ 135,000 ( 0 % interest rate at September 30, 2025), which mature various dates in 2025 . The Group has a convertible note agreement with White Lion Capital and as of September 30, 2025, the outstanding balance was $ 256,959 ( 5.00 % interest rate at September 30, 2025), which mature various dates in 2026 . The Group has a loan agreement with BCM Europe AG and as of December 31, 2024, the outstanding balance was $ 600,000 ( 3.00 % interest rate at December 31, 2024). The Group has a loan agreement with BCM Europe AG and as of December 31, 2024, the outstanding balance was $ 260,000 ( 3.00 % interest rate at December 31, 2024). The Group has a loan agreement with OSR Holdings, Inc. (f/k/a Bellevue Life Sciences Acquisition Corp.) and as of December 31, 2024, the outstanding balance was $ 300,000 ( 3.96 % interest rate at December 31, 2024), which matures in October 2025 . The Group has a loan agreement with an individual and as of December 31, 2024, the outstanding balance was $ 50,000 ( 7.00 % interest rate at December 31, 2024), which matures in December 2025 . The Group has multiple loan agreements 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 . Details of convertible bonds issued on May 6, 2025 and outstanding as of September 30, 2025 are as follows: Classification Details 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. 22 (17) Long-term debt 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 . (18) Post-employment benefits 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. Danatein’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 nine months ended September 30, 2025 and 2024 are $ 401,449 and $ 93,458 , respectively. (19) Related party transactions As of September 30, 2025, the Group's related parties are as follows: Type Related parties Ultimate parent entity Bellevue Capital Management LLC Major shareholder of the Parent BCM Europe AG Subsidiaries RMC, VAXIMM, Darnatein, OSR Holdings Co., Ltd. Associates Taction Co., Ltd. Other related parties Bellevue Global Life Sciences Investors LLC Bellevue Global Life Sciences Acquisition Corp There are no sales and procurement transactions and treasury transactions with related parties for the nine months ended September 30, 2025 and 2024. Details of receivables and payables from related party transactions as at September 30, 2025 and December 31, 2024 are as follows: September 30, 2025 Related parties Short-term borrowings BCM Europe AG Major shareholder of the Parent $ 860,000 Bellevue Global Life Sciences Acquisition Corp Other related parties 1,278,000 December 31, 2024 Related parties Short-term borrowings Key management Individuals $ 340,136 Compensations paid or accrued to key management of the Parent for the nine months ended September 30, 2025 and 2024 are as follows: For the nine months ended September 30, 2025 September 30, 2024 Salaries $ 461,498 $ 283,050 The Group’s key management includes registered directors who have important authority and responsibility for planning, operation, and control of the Group’s business activities. No collateral or guarantee were provided for related parties and were received from related parties as of September 30, 2025 and December 31, 2024. 23 (20) Administrative expenses Details of administrative expenses for the nine months ended September 30, 2025 and 2024 are as follows: For the nine months ended September 30, 2025 For the nine months ended September 30, 2024 Salary $ 1,177,435 $ 693,447 Retirement payment 401,338 93,458 Employee benefits 75,171 42,336 Travel expenses 31,655 31,020 Entertainment expenses 31,313 25,152 Communication cost 1,446 1,767 Tax and due 27,555 17,061 Depreciation cost 894 47,849 Amortization of intangible assets 7,010,647 8,488,493 Rental cost 75,423 74,728 Repair fee 3,386 141 Insurance cost 13,598 25,920 Vehicle maintenance fee 26,447 8,874 Allowance for expected credit losses ( 5,634 ) 26,322 Research and development expenses 141,880 146,679 Transportation cost 1,518 2,150 Training cost 1,223 - Publishing fee 717 310 Office supplies fee 161 234 Consumable cost 10,260 18,221 Commisions and professional fee 3,373,415 969,879 Building management fee 13,822 15,398 Advertising expenses - 954 Total $ 12,413,670 $ 10,730,393 (21) Income taxes 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 September 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 September 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 September 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 September 30, 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. 24 (22) Loss per share Basic loss per share for the nine months ended September 30, 2025 and 2024 are calculated as follows: (The United States Dollar in unit and number of shares) For the nine months ended September 30 2025 2024 Net loss (A) $ ( 13,187,995 ) $ ( 8,989,387 ) Weighted average number of ordinary shares outstanding (B) 17,375,710 2,155,000 Basic loss per ordinary share (A/B) $ ( 0.76 ) $ ( 4.17 ) Weighted average number of ordinary shares outstanding for the nine months ended September 30, 2025 and 2024 are calculated as follows: (Number of shares) For the nine months ended September 30 2025 2024 Ordinary shares outstanding at the beginning 2,155,000 2,155,000 Changes due to business combination 14,362,392 - Commitment shares issued for White Lion Capital 201,703 - Shares issued due to ELOC 195,156 - Shares issued due to Convertible note conversion 232,402 - Shares issued due to Warrant conversion 229,057 - Weighted average number of ordinary shares outstanding 17,375,710 2,155,000 Diluted loss per share for the nine months ended September 30, 2025 and 2024 are calculated as follows: (The United States Dollar in unit and number of shares) For the nine months ended September 30 2025 2024 Net loss (A) $ ( 13,175,055 ) $ ( 8,989,387 ) Weighted average number of ordinary shares outstanding (B) 23,118,372 2,155,000 Diluted loss per ordinary share (A/B) $ ( 0.57 ) $ ( 4.17 ) Weighted average number of ordinary shares including diluted effects outstanding for the nine months ended September 30, 2025 and 2024 are calculated as follows: (Number of shares) For the nine months ended September 30 2025 2024 Weighted average number of ordinary shares outstanding beginning 17,375,710 2,155,000 Diluted effect) Convertible bonds conversion effect 403,807 - Diluted effect) Warrant conversion effect 5,338,855 - Weighted average number of ordinary shares outstanding 23,118,372 2,155,000 25 (23) Commitment and contingencies The Group has no pending litigation cases arising in the ordinary course of business as of September 30, 2025 and December 31, 2024. 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 September 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. (24) Segment reporting The 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 below. There are no external customers that account for more than 10% of sales for the reporting period. (25) Subsequent events The Group has evaluated subsequent events from the balance sheet date through November 3, 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 October, the Group issued total of 2,001,571 shares under the warrants, to raise gross proceeds of $ 900,707 . ● In October, the Board of Directors of the Group approved the acquisition of Woori IO Co.,Ltd through a comprehensive share exchange with OSR Holdings Co., Ltd. ● In October, the Company’s convertible loan from Duksung Co.,Ltd totaling $ 800,000 reached its maturity. The Company repaid $ 150,000 plus 5 % accrued interest and the remaining balance of $ 650,000 was extended till October 15, 2026, with an interest rate of 7 %. 26