What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2025-11-12 · 143 added, 139 removed, 82 unchanged (77% of the section changed)

26 unchanged sentences

Recent Developments

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

VXM01 License Agreement Update

On March 27, 2026, the Company, together with its wholly owned subsidiary

Vaximm AG, entered into a binding term sheet with BCM Europe AG relating to a revised global exclusive license arrangement for VXM01.

The term sheet supersedes and replaces the prior agreement dated January 13, 2025.

Additional information is set forth in the Company’s Current

Report on Form 8-K filed with the U.S.

Securities and Exchange Commission on April 2, 2026, which is incorporated herein by reference.

Subsequently, on April 29, 2026, the Company and Vaximm entered into

a definitive Global Exclusive License Agreement with BCME, pursuant to which BCME was granted an exclusive, worldwide, sublicensable license

to develop and commercialize VXM01.

The agreement provides for potential milestone payments of up to approximately $815 million, as well

as additional economic terms, including an equity participation right in the form of a put option held by the Company, pursuant to which

the Company may require BCME to purchase shares of its common stock under specified conditions.

In connection with the foregoing transaction, the parties also entered

into a Pledge Agreement pursuant to which BCME and its affiliates pledged their OSR Holdings, Inc.

common stock to the Company as collateral

security for BCME’s milestone payment obligations under the Global Exclusive License Agreement.

Additional information regarding the foregoing is set forth in the Company’s Current Reports on Form 8-K filed with the U.S.

and Exchange Commission on April 2, 2026 and April 29, 2026, respectively, which are incorporated herein by reference.

Amendment No.

2 to Common Stock Purchase Agreement

On April 7, 2026, the Company entered into Amendment No.

2 to its Common

Stock Purchase Agreement with White Lion Capital, LLC, d/b/a White Lion GBM Innovation Fund, amending the original agreement dated February

The amendment enhances the Company’s flexibility under its equity

line of credit by introducing intraday and fixed purchase notice mechanisms, each subject to specified conditions and based on discounted

volume-weighted average price (“VWAP”) formulas.

The amendment also provides for related settlement procedures, including

generally one business day settlement, and includes certain threshold price adjustment provisions applicable to specific purchase notices.

Additional information regarding this amendment is set forth in the

Company’s Current Report on Form 8-K filed with the U.S.

Securities and Exchange Commission on April 7, 2026, which is incorporated

herein by reference.

Convertible Note Issuance

On April 7, 2026, the Company entered into a Note Purchase Agreement

with White Lion Capital, LLC, d/b/a White Lion GBM Innovation Fund (“White Lion”), pursuant to which the Company issued a

senior secured convertible promissory note in the principal amount of $1,055,555.55.

In consideration, the Company received $500,000 in cash and a reduction

of approximately $2.0 million of outstanding warrant obligations held by White Lion, resulting in the effective cancellation of such warrant.

The note bears interest at 5% per annum, matures nine months from issuance,

and is convertible into shares of the Company’s common stock at a fixed conversion price of $1.00 per share, subject to adjustment,

or, under certain conditions, at a discounted market-based price.

Conversion is generally restricted until six months following issuance,

subject to certain exceptions, and is further subject to customary beneficial ownership limitations.

The note is secured by substantially

all of the Company’s assets and includes customary covenants and events of default.

Additional information regarding the foregoing transactions is set

forth in the Company’s Current Report on Form 8-K filed with the U.S.

Securities and Exchange Commission on April 7, 2026, which

is incorporated herein by reference.

Appointment of Chief Operating Officer

On March 26, 2026, the Board of Directors of OSR Holdings, Inc.

the appointment of Yeiseok Kim as Chief Operating Officer of the Company, effective April 16, 2026.

Kim previously served as a Senior

Analyst at OSR Holdings Co., Ltd., where he was involved in cross-border healthcare investments and pharmaceutical licensing activities.

In connection with his appointment, OSR Holdings Co., Ltd.

into an amended employment agreement with Mr.

Kim, pursuant to which he will receive an annual base salary of KRW 240,000,000, eligibility

to participate in the Company’s equity-based compensation plans, and customary executive benefits.

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

Three Months Ended September 30,

Cost of Sales

Selling, general and administrative expenses

Operating loss

Other income (expense)

Profit (loss) before income taxes

Nine Months Ended September 30,

Comparison of the Three Months Ended March 31, 2025 and

The following tables present OSR Holdings’

statements of operations for the three months ended March 31, 2025 and 2026, and percentage change between the two periods:

Three Months Ended March 31,

Cost of Sales

1 unchanged sentence

Operating loss

(10,079,178 )

(11,950,469 )

Other income (expense)

1 unchanged sentence

(11,392,814 )

(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.

OSR Holdings’ net sales, cost of sales,

and gross profit are primarily derived from RMC, its subsidiary engaged in the distribution of medical devices, and Woori IO, a manufacturer

of non-invasive glucose monitoring devices.

However, based on revenues for the first quarter of 2026, approximately 96.5% of total revenue

was attributable to RMC.

In addition, because Woori IO was first consolidated in the first quarter of 2026, changes compared to the prior-year

period were primarily attributable to RMC.

For the three months ended March 31, 2026, OSR

Holdings’ net sales decreased by $277,215, or 36%, compared to the same period in the prior year.

However, cost of sales decreased

at a higher rate of 45%, or $268,810, resulting in a relatively smaller decrease in gross profit of $8,405, or 5%.

Overall, the gross

profit margin increased from 22% in the first quarter of 2025 to 33% in the first quarter of 2026.

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 2025, the change began to affect revenue recognition starting in July 2025.

Accordingly, management expects this consignment-based

model to enhance the stability of gross profit margins in future periods.

Selling, General and Administrative Expenses

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,

For the three months ended March 31, 2026, OSR Holdings’ selling,

general and administrative (SG&A) expenses increased by $740,953, or 24%, compared to the same period in the prior year.

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.

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

The increase was primarily attributable to

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

Additional SG&A

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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.

The increase was primarily attributable to higher personnel-related costs and professional service fees.

Woori IO accounted for approximately 1% of total SG&A expenses,

and therefore the overall impact from its initial inclusion as a newly consolidated subsidiary was immaterial.

Research and Development (R&D) Expenses

OSR Holding’s R&D expenses consisted primarily of development

costs associated with our product candidates in pre-clinical and clinical trials, and related costs of salaries and contractors.

costs are expensed as incurred.

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 2026, which could potentially

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

OSR Holdings’ research and development (R&D) expenses consist

primarily of development costs associated with product candidates in pre-clinical and clinical trial stages, as well as related salary

and outsourced service costs.

R&D costs are expensed as incurred.

Beginning in the second half of 2026, OSR Holdings expects to incur

and report R&D-related expenses primarily from its subsidiaries actively engaged in research and development activities at an estimated

amount of approximately $2.5 million to $3.0 million per quarter, which could potentially increase to approximately $5.0 million to $6.0

million per quarter in the future.

Operating Loss

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,

For the three months ended March 31, 2026, OSR Holdings’ operating

loss increased by $749,358, or 26%, compared to the same period in the prior year.

This increase was at a level generally consistent with the amount and

percentage increase in SG&A expenses discussed in the section titled “Selling, General and Administrative Expenses.”

Other Income (Expense)

1 unchanged sentence

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

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.

For the three months ended March 31, 2026, the Company recorded net

other expenses of $252,305, representing a decrease of $8,222,683, or 97%, compared to the same period in the prior year.

This significant

decrease was primarily attributable 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, which was recognized only during the first quarter of 2025.

Loss Before Income Taxes

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,

For the three months ended March 31, 2026, OSR

Holdings’ loss before income taxes decreased by $7,473,326, or 66%, compared to the same period in the prior year.

As previously

discussed, this decrease was primarily attributable 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, which was recognized during the first quarter of

Liquidity and Capital Resources

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

issuance of common stock and convertible bonds, bank borrowings, loans from affiliates, and, to a lesser extent, product revenue generated

by its subsidiary, RMC.

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

combination and the filing of its Form S-4 registration statement, which, together with other general expenses, reduced the funds available

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.

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.

Since its inception through March 31, 2026, OSR

Holdings has incurred significant operating losses and negative cash flows from operating activities.

The Company recorded an operating

loss of approximately $18.33 million for the year ended December 31, 2025, compared to an operating loss of approximately $11.69 million

for the same period in 2024.

In addition, the Company recorded an operating loss of approximately $3.67 million during the first quarter

As of March 31, 2026, OSR Holdings had an accumulated deficit of approximately $40.10 million.

To date, OSR Holdings has funded its operations

primarily through the issuance of common stock and convertible bonds, bank borrowings, loans from affiliates, and, to a lesser extent,

product revenue generated by its subsidiary, RMC.

As of March 31, 2026, the Company had cash and cash equivalents of approximately $1.57

million, consisting primarily of bank deposits.

The Company incurred significant expenses in connection

with the Business Combination and the filing of its Form S-4 registration statement, which, together with other general operating expenses,

reduced the funds available 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.

As of March 31, 2026, the Company had issued a total of 3,070,500 shares under the ELOC, raising gross proceeds of $2.11 million.

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 until the end of the Commitment Period (December 31, 2026) as set forth in the ELOC Agreement with White Lion.

However, the Company

intends to exercise a higher level of prudence and control in the execution of the ELOC in order to minimize the dilution and price impact

it may have on the market for the Company’s equity securities.

In addition, the Company plans to implement new equity financing

facilities that are generally considered less dilutive and more controllable than ELOC arrangements, such as an At-the-Market (“ATM”)

Off-Balance Sheet Arrangements

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.

which would be considered off-balance sheet arrangements as of March 31, 2026.

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

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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