What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-12 · 1245 added, 859 removed, 462 unchanged (82% of the section changed)

FINANCIAL STATEMENTS

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Balance Sheets

of June 30, 2025 and December 31, 2024

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Balance Sheets

As of September 30, 2025 and December 31, 2024

September 30,

Current assets:

4 unchanged sentences

Deferred offering costs

Current assets of discontinued operations

Current assets of discontinued

Total current assets

Property, plant and equipment, net

Notes receivable - related party

Interest receivable, related party

Notes receivable

Interest receivable

Intangible assets, net

3 unchanged sentences

$ 104,853,805

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

3 unchanged sentences

Loan payable, related party

Convertible note, net of debt discount - current portion

Convertible note, net of debt discount - current

Operating lease liability - current

Warrant liability

Current liabilities of discontinued operations

Current liabilities of

discontinued operations

Total current liabilities

7 unchanged sentences

Stockholders’ equity (deficit):

Series A preferred stock, $ 0.00001

and 9,211,246

shares authorized;

shares issued and outstanding as of both June 30, 2025 and December 31, 2024

Series A preferred stock, $ 0.00001 par value;

0 and 9,211,246 shares

0 shares issued and outstanding as of both September 30, 2025 and December 31, 2024

Series B preferred stock, $ 0.00001 par value;

787,754 shares authorized;

15,759 shares issued and outstanding as of both June 30, 2025 and December 31, 2024

Series C preferred stock, $ 0.00001

15,759 shares issued and outstanding as of both September 30, 2025 and December 31, 2024

Series C preferred stock, $ 0.00001 par value;

1,000 shares authorized;

shares issued and outstanding as of both June 30, 2025 and December 31, 2024

Series X preferred stock, $ 0.00001

0 shares issued and outstanding as of both September 30, 2025 and December 31, 2024

Series X preferred stock, $ 0.00001 par value;

9,211,246 shares authorized;

shares issued and outstanding as of both June 30, 2025 and December 31, 2024

preferred stock, value

0 shares issued and outstanding as of both September 30, 2025 and December 31, 2024

Preferred stock

Common stock, $ 0.00001 par value;

100,000,000 shares authorized;

16,131,180 and 8,750,582 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

23,132,260 and 8,750,582 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

2 unchanged sentences

( 39,038,973 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total stockholders’

Total liabilities and

stockholders’ equity

$ 104,830,290

$ 104,853,805

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Statements Of Operations

the Three and Six Months Ended June 30, 2025 and 2024

The accompanying notes are an integral part of

the unaudited consolidated financial statements.

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Statements Of Operations

For the Three and Nine Months Ended September

30, 2025 and 2024

Three Months Ended

Six Months Ended

Cost of sales

Gross profit (loss)

Nine Months Ended

September 30,

Cost of goods sold

Operating expenses:

20 unchanged sentences

( 1,803,430 )

Total non-operating expense

( 3,127,707 )

( 1,055,347 )

( 1,269,501 )

Total non-operating expense

Net loss from continuing operations

9 unchanged sentences

( 11,441,764 )

Net (loss) income from discontinued operations, net of tax

Net income from discontinued operations,

Net (loss) income

6 unchanged sentences

Weighted average common shares outstanding

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Statements of Changes in Stockholders’ Equity

The accompanying notes are an integral part of

the unaudited consolidated financial statements.

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Statements of Changes

in Stockholders’ Equity

Preferred Stock

Stockholders’

15 unchanged sentences

( 26,504,881 )

Cash dividends paid ($ 1.50 per share)

( 2,187,759 )

Conversion of Series C preferred stock into common stock

Issuance of shares pursuant to Merger

Conversion of Series X preferred stock into common stock

( 6,826,753 )

Warrants issued with convertible note

Warrants exercised for shares

Options expense

( 3,183,601 )

Balances at September 30, 2024

$ 117,008,196

$ ( 31,876,241 )

Balances at December 31, 2024

2 unchanged sentences

Common stock issued for services

Common stock issued for cash pursuant to ELOC agreement, net of offering costs

Common stock issued for cash pursuant to ELOC agreement, net of offering

Equity line of commitment shares issued

5 unchanged sentences

( 42,102,970 )

Common stock issued for services

3 unchanged sentences

( 6,720,573 )

Balances at June 30, 2025

( 48,823,543 )

Common stock issued for services

Common stock issued for cash, net of offering

Cancellation of stock options and issuance of common stock

Warrants exercised for shares

Options expense

( 3,607,361 )

Net income (loss)

1 unchanged sentence

( 3,607,361 )

Balances at June 30, 2025

Balances at September 30, 2025

$ 135,100,304

2 unchanged sentences

$ ( 52,430,904 )

accompanying notes are an integral part of the unaudited consolidated financial statements

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Statements of Cash Flows

The Six Months Ended June 30, 2025 and 2024

Six Months Ended

The accompanying notes are an integral part of

the unaudited consolidated financial statements

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Statements of Cash Flows

For The Nine Months Ended September 30, 2025

Nine Months Ended

September 30,

Cash flows from operating activities:

2 unchanged sentences

$ ( 11,441,764 )

Adjustments to reconcile net loss to net cash used in

operating activities:

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

Depreciation expense

1 unchanged sentence

Change in fair value of derivative liability

( 2,296,834 )

Loss on conversion of note payable

Loss on disposition of subsidiaries

Options expense

Stock-based compensation

Common stock issued for services

11 unchanged sentences

Current liabilities

Net cash used in operating activities from continuing operations

Net cash used in operating

activities from continuing operations

( 8,207,188 )

( 10,585,173 )

Net cash provided by (used in) operating activities from discontinued operations

Net cash used in operating activities

Net cash provided by (used

in) operating activities from discontinued operations

Net cash used in operating

( 8,204,389 )

1 unchanged sentence

Cash flows from investing activities:

Cash received in acquisition

Acquisition of property and equipment

Investment in securities

( 2,500,000 )

Net cash used in investing activities from continuing operations

Net cash used in investing activities from continuing

( 2,379,024 )

Net cash provided by investing activities from discontinued operations

Net cash provided by investing activities

Net cash provided by investing activities from

discontinued operations

Net cash provided by investing

Cash flows from financing activities:

2 unchanged sentences

Proceeds from loan payable, related party

Proceeds from convertible note

Repayment of convertible notes

( 3,333,333 )

Gross proceeds from issuance of common stock

3 unchanged sentences

Proceeds from exercise of options

Deferred offering costs

Net cash provided by (used in) financing activities from continuing operations

( 13,891,011 )

Net cash used in financing activities from discontinued operations

Net cash provided by (used in) financing activities

from continuing operations

( 15,764,770 )

Net cash used in financing activities from discontinued

Net cash provided by (used

in) financing activities

( 15,769,770 )

Net change in cash

5 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Issuance of shares pursuant to Merger

Assets acquired in connection with Merger

Liabilities assumed in connection with Merger

Insurance premium financed

Deferred offering costs

Warrants issued with convertible note

Conversion of note payable into common stock

1 unchanged sentence

Issuance of note receivable in exchange for other receivables

Insurance premium financed

Deferred offering costs included in accrued expenses

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

1 – ORGANIZATION AND BASIS OF PRESENTATION

The accompanying notes are an integral part of

the unaudited consolidated financial statements.

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

On September 20, 2024, changed

its legal name from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.” As of June 30, 2025, the Company owned

all equity interests of Bonum Health, LLC and Scienture, LLC (f/k/a Scienture, Inc.) (“ Scienture ”).

its legal name from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.” As of September 30, 2025, the Company

owned all equity interests of Bonum Health, LLC and Scienture, LLC (f/k/a Scienture, Inc.) (“ Scienture ”).

was acquired in July 2024.

Bonum Health, LLC was formed to hold certain telehealth

assets acquired in October 2019.

Bonum Health, LLC was formed

to hold certain telehealth assets acquired in October 2019.

The “Bonum Health Hub” was launched in February 2020;

however, the Company does not

anticipate installations moving forward.

On April 30, 2025, the Company completed the sale of Bonum Health,

LLC in the near future.

the Company does not anticipate installations moving forward.

On April 30, 2025, the Company completed the sale of Bonum Health, LLC

in the near future.

Scienture a New York based

7 unchanged sentences

consists of short term and long-term opportunities with efficient development, regulatory, and go to market strategies.

of Legacy Subsidiaries

The Company previously owned all

equity interests in Softell Inc.

(f/k/a Trxade Inc.) (“ Softell ”), Softell’s wholly owned subsidiary, Integra

Pharma Solutions, LLC (“ IPS ”), and Bonum Health, Inc.

As described below, these subsidiaries were disposed of

during the three months ending June 30, 2025.

Disposition of Legacy Subsidiaries

The Company previously owned

all equity interests in Softell Inc.

(f/k/a Trxade Inc.) (“ Softell ”), Softell’s wholly owned subsidiary,

Integra Pharma Solutions, LLC (“ IPS ”), and Bonum Health, Inc.

As described below, these subsidiaries were disposed

of during the three months ending June 30, 2025.

On October 4, 2024, the Company

and Softell entered into an Assignment and Assumption of Membership Interests (the “ IPS Assignment Agreement ”),

pursuant to which the Company transferred, and Softell accepted, 100 %

of the membership interests of IPS.

As a result, IPS became a wholly-owned subsidiary of Softell.

During the year ended December 31,

2023, and a portion of the quarter ended March 31, 2024, Softell, operated a web-based market platform that enabled commerce among healthcare

buyers and sellers of pharmaceuticals, accessories and services.

IPS is a licensed pharmaceutical wholesaler and sells brand, generic

and non-drug products to customers.

IPS’ customers range across healthcare markets including government organizations, hospitals,

clinics and independent pharmacies nationwide.

was formed to provide an overall healthcare experience comparable to a primary care practitioner, and an online portal as

a personal electronic medical record and scheduling system was available on a subscription basis, primarily as a stand-alone telehealth

software application that could be licensed on a business-to-business (B2B) model to clients as an employment health benefit for the clients’

April 8, 2025, Softell entered into a Membership Interest Purchase Agreement (the “ IPS MIPA ”) with Tollo Health,

LLC (“ Tollo ”), pursuant to which Tollo agreed to purchase and the Company agreed to sell all of the Company’s

membership interests in IPS.

pursuant to which the Company transferred, and Softell accepted, 100 % of the membership interests of IPS.

As a result, IPS became a wholly-owned

subsidiary of Softell.

During the year ended December 31, 2023, and a portion of the quarter ended March 31, 2024, Softell, operated

a web-based market platform that enabled commerce among healthcare buyers and sellers of pharmaceuticals, accessories and services.

is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products to customers.

IPS’ customers range across

healthcare markets including government organizations, hospitals, clinics and independent pharmacies nationwide.

Bonum Health, Inc.

to provide an overall healthcare experience comparable to a primary care practitioner, and an online portal as a personal electronic

medical record and scheduling system was available on a subscription basis, primarily as a stand-alone telehealth software application

that could be licensed on a business-to-business (B2B) model to clients as an employment health benefit for the clients’ employees.

On April 8, 2025, Softell

entered into a Membership Interest Purchase Agreement (the “ IPS MIPA ”) with Tollo Health, LLC (“ Tollo ”),

pursuant to which Tollo agreed to purchase and the Company agreed to sell all of the Company’s membership interests in IPS.

On April 8, 2025, the Company

5 unchanged sentences

time the Company entered into the each of the Agreements.

connection with each of the Agreements, the Company agreed to retain certain excluded liabilities of IPS, Softell and Bonum Health,

In connection with each of

the Agreements, the Company agreed to retain certain excluded liabilities of IPS, Softell and Bonum Health, Inc.

including all liabilities:

(i) related to, in connection with or arising out of any claims, charges, complaints, actions,

suits, settlements, hearings, investigations, proceedings, or governmental or regulatory inquiries with respect to IPS, Softell or

Bonum Health, Inc., respectively, prior to the closing under the applicable Agreement;

(ii) related to, in connection with or

arising out of any breach by the Company of the applicable Agreement or any other agreements and documents required to be delivered

by the Company;

(iii) not disclosed by the Company in accordance with each Agreement;

(iv) related to any actions threatened or

initiated by a governmental entity against IPS, Softell, or Bonum Health, Inc., respectively;

and (v) related to tax returns or tax matters of

the Company, IPS , Softell, or Bonum Health, Inc., respectively, for any periods prior to closing under the applicable Agreement.

As consideration for

acquiring IPS, Softell, and Bonum Health, Inc., Tollo paid the Company $ 5

million, and delivered the consideration in the form of a promissory note bearing interest at the prime rate.

The promissory note

matures on June 30, 2030, and a balloon payment is due on or before that date.

However, Tollo is required to pay 20% of the proceeds

of a future equity financing toward repayment of the principal and accrued but unpaid interest owed under the promissory note.

June 24, 2025, the promissory note was assigned by Tollo to Integral Health, Inc., which (at the time of the assignment) was owned

by Suren Ajjarapu, the Company’s former Chief Executive Officer, and Prashant Patel, the Company’s former President and

Chief Operating Officer as of June 30, 2025.

On April 30, 2025, the Company completed the sale of its subsidiaries,

IPS, Softell and Bonum Health, Inc., to Tollo in exchange for the $ 5,000,000 promissory note bearing generally described above.

In connection with

the transaction, the Company recorded a $ 5,000,000 promissory note receivable,

(i) related to, in connection with or arising out of any claims, charges, complaints, actions, suits, settlements, hearings, investigations,

proceedings, or governmental or regulatory inquiries with respect to IPS, Softell or Bonum Health, Inc., respectively, prior to the closing

under the applicable Agreement;

(ii) related to, in connection with or arising out of any breach by the Company of the applicable Agreement

or any other agreements and documents required to be delivered by the Company;

(iii) not disclosed by the Company in accordance with

each Agreement;

(iv) related to any actions threatened or initiated by a governmental entity against IPS, Softell, or Bonum Health, Inc.,

respectively;

and (v) related to tax returns or tax matters of the Company, IPS , Softell, or Bonum Health, Inc., respectively, for any

periods prior to closing under the applicable Agreement.

As consideration for acquiring

IPS, Softell, and Bonum Health, Inc., Tollo paid the Company $5 million, and delivered the consideration in the form of a promissory

note bearing interest at the prime rate.

The promissory note matures on June 30, 2030, and a balloon payment is due on or before that

However, Tollo is required to pay 20% of the proceeds of a future equity financing toward repayment of the principal and accrued

but unpaid interest owed under the promissory note.

On June 24, 2025, the promissory note was assigned by Tollo to Integral Health, Inc.,

which (at the time of the assignment) was owned by Suren Ajjarapu, the Company’s former Chief Executive Officer, and Prashant Patel,

the Company’s former President and Chief Operating Officer as of September 30, 2025.

On April 30, 2025, the Company

completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo in exchange for the $ 5,000,000 promissory note

bearing generally described above.

In connection with the transaction, the Company recorded a $ 5,000,000 promissory note receivable,

and derecognized subsidiaries’ accounts payable of $ 117,162 , other receivables of $ 4,219,239 , operating lease right-of-use assets

2 unchanged sentences

a loss on disposition of $ 385,528 .

divestitures are part of a broader strategic realignment at the Company designed to sharpen operational focus and unlock long-term value.

It is aligned with the Company’s commitment to streamline its core operations, optimize its portfolio, and accelerate growth in

the Branded and Specialty Pharma markets.

The Company intends to use the proceeds obtained from the divestment to facilitate the high-growth

commercial and strategic product development activities at its Scienture subsidiary.

of Presentation and Principles of Consolidation

accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting

principles generally accepted in the United States of America (“ U.S.

GAAP ”) and the rules of the SEC and should

be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form

10-K for the year ended December 31, 2024, as filed with the SEC on March 26, 2025.

the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial

position and the results of operations for the interim periods presented have been reflected herein.

All significant intercompany balances

and transactions have been eliminated in consolidation.

The results of operations for the interim periods are not necessarily indicative

of the results to be expected for the full year.

Notes to the financial statements that would substantially duplicate the disclosures

contained in the audited financial statements for the year ended December 31, 2024, as reported in the Company’s Annual Report

on Form 10-K have been omitted.

preparation of condensed consolidated financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue

and expenses in the reporting period.

The Company bases its estimates and assumptions on current facts, historical experience and various

other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about

the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from its estimates.

Significant estimates for the six

months ended June 30, 2025 and 2024 include the valuation of intangible assets, including goodwill, and gain (losses) on dispositions.

Value of Financial Instruments

assets and liabilities of the Company are carried at fair value under GAAP.

Fair value is defined as the exchange price that would be

received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability

in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize

the use of observable inputs and minimize the use of unobservable inputs.

Financial assets and liabilities carried at fair value are

to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered

observable and the last is considered unobservable:

1—Quoted prices in active markets for identical assets or liabilities.

2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities,

quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable

or can be corroborated by observable market data.

3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value

of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

carrying amounts for cash, accounts receivable, accounts payable, accrued liabilities, and other current liabilities approximate their

fair value because of their short-term maturity.

The Company’s notes payables approximate the fair value of such instruments as

the notes bear interest rates that are consistent with current market rates.

Company’s derivative liability is a Level 3 liability measured at fair value on a recurring basis (see Note 8).

Concentration

of Credit Risks and Major Customers

instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables.

The Company places its cash and cash equivalents with financial institutions.

Deposits are insured to Federal Deposit Insurance Corporation

During the three and six months ended June 30, 2025 and 2024, no sales to customers represented greater than 10 %

Receivable, net

Company’s receivables are from customers and are typically collected within 90 days.

The Company determines the allowance based

on known troubled accounts, historical experience, and other currently available evidence.

Offering Costs

Company complies with the requirements of Accounting Standards Codification (“ ASC ”) 340-10-S99-1 with regards

to offering costs.

The divestitures are part

of a broader strategic realignment at the Company designed to sharpen operational focus and unlock long-term value.

It is aligned with

the Company’s commitment to streamline its core operations, optimize its portfolio, and accelerate growth in the Branded and Specialty

Pharma markets.

The Company intends to use the proceeds obtained from the divestment to facilitate the high-growth commercial and strategic

product development activities at its Scienture subsidiary.

Basis of Presentation and Principles of

Consolidation

The accompanying unaudited

interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally

accepted in the United States of America (“ U.S.

GAAP ”) and the rules of the SEC and should be read in conjunction

with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended

December 31, 2024, as filed with the SEC on March 26, 2025.

In the opinion of management,

all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results

of operations for the interim periods presented have been reflected herein.

All significant intercompany balances and transactions have

been eliminated in consolidation.

The results of operations for the interim periods are not necessarily indicative of the results to

be expected for the full year.

Notes to the financial statements that would substantially duplicate the disclosures contained in the

audited financial statements for the year ended December 31, 2024, as reported in the Company’s Annual Report on Form 10-K have

been omitted.

Use of Estimates

The preparation of condensed

consolidated financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in

the reporting period.

The Company bases its estimates and assumptions on current facts, historical experience and various other factors

that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying

values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results

experienced by the Company may differ materially and adversely from its estimates.

Significant estimates for the nine months ended September

30, 2025 and 2024 include the valuation of intangible assets, including goodwill, and gain (losses) on dispositions.

of Previously Issued Financial Statements for Correction of Immaterial Errors

the three months ended September 30, 2025, the Company identified and corrected an immaterial error impacting additional paid-in

capital, debt, and related other expense originally recorded in the first and second quarters of 2025.

Specifically, $ 1.6

million of debt repayment proceeds were incorrectly netted against equity in the first quarter of 2025, resulting in an

understatement of stockholders’ equity and an overstatement of liabilities.

The related income statement impact included a

million understatement of net loss in the first quarter and a $ 0.4

million overstatement of net loss in YTD Q2.

The cumulative correction to both the condensed consolidated balance sheets and

statements of operations was recorded in the current period.

As of September 30, 2025, the related debt was fully repaid.

assessed the materiality of the error on both a quantitative and qualitative basis, in accordance with SEC Staff Accounting Bulletin

99, Materiality , codified in ASC Topic 250, Accounting Changes and Error Corrections .

Management concluded that the

error and related impacts did not result in a material misstatement of the Company’s previously issued interim financial statements

for the three months ended March 31, 2025, or the three and six months ended June 30, 2025.

Fair Value of Financial Instruments

Certain assets and liabilities

of the Company are carried at fair value under GAAP.

Fair value is defined as the exchange price that would be received for an asset

or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly

transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use

of observable inputs and minimize the use of unobservable inputs.

Financial assets and liabilities carried at fair value are to be classified

and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and

the last is considered unobservable:

Level 1—Quoted prices in active

markets for identical assets or liabilities.

Level 2—Observable inputs (other

than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets

that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by

observable market data.

Level 3—Unobservable inputs

that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities,

including pricing models, discounted cash flow methodologies and similar techniques.

The carrying amounts for

cash, accounts receivable, accounts payable, accrued liabilities, and other current liabilities approximate their fair value because

of their short-term maturity.

The Company’s notes payables approximate the fair value of such instruments as the notes bear interest

rates that are consistent with current market rates.

The Company’s derivative

liability is a Level 3 liability measured at fair value on a recurring basis (see Note 8).

Concentration of Credit Risks and Major

Financial instruments that

potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables.

The Company places its

cash and cash equivalents with financial institutions.

Deposits are insured to Federal Deposit Insurance Corporation limits.

three and nine months ended September 30, 2025 and 2024, two customers accounted for 96.39 % of revenue.

Accounts Receivable, net

Accounts receivable represent

amounts due from wholesale distributors for the sale of pharmaceutical products.

These receivables are recorded at the invoiced amount,

net of estimated variable consideration including rebates, chargebacks, discounts, and other gross-to-net sales adjustments, consistent

with the Company’s revenue recognition policy.

Payment terms are generally

net 90 days from the date of invoice.

The Company monitors the creditworthiness of its customers and evaluates the collectability of

outstanding receivables on an ongoing basis.

The Company estimates expected credit losses on trade receivables in accordance

with ASC 326 using an allowance for credit losses (“ACL”).

The ACL reflects management’s estimate of lifetime expected

credit losses based on historical loss experience, current conditions, and reasonable and supportable forecasts.

Trade receivables are

pooled by similar risk characteristics.

Balances are written off when deemed uncollectible, and recoveries are recorded when received.

The Company monitors credit risk primarily through aging and customer-specific evaluations.

Inventory is stated at the

lower of cost or net realizable value.

Cost is determined using the first-in, first-out method and includes the purchase price,

inbound freight, and other costs directly attributable to the acquisition of finished goods.

Inventories primarily consist

of finished pharmaceutical products held for sale.

The Company regularly evaluates inventory for obsolescence and slow-moving items and

records a reserve, if necessary, to write down inventories to their estimated net realizable value.

Factors considered in the valuation

include current market conditions, historical sales trends, product expiration dates, and projected demand.

Inventory write-downs are

recorded as a component of cost of goods sold and are not reversed if the market value of the inventory subsequently increases.

Deferred Offering Costs

The Company complies with

the requirements of Accounting Standards Codification (“ ASC ”) 340-10-S99-1 with regards to offering costs.

Prior to the completion of an offering, offering costs are capitalized.

The deferred offering costs are charged to

additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering

is not completed.

As of June 30, 2025, the Company has capitalized $ 554,586

in deferred offering costs.

During the six months ended June

30, 2025, $ 534,800

of deferred offering costs capitalized as of December 31, 2024,

were charged to additional paid-in capital upon the Company’s equity offering.

Company accounts for acquisitions and investments in businesses as business combinations if the target meets the definition of a business

and (a) the target is a variable interest entity and the Company is the target’s primary beneficiary, and therefore the Company

must consolidate its financial statements, or (b) the Company acquires more than 50% of the voting interest of the target and it was

not previously consolidated.

The Company records business combinations using the acquisition method of accounting, which requires all

the assets acquired and liabilities assumed to be recorded at fair value as of the acquisition date.

The excess of the purchase price

over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill.

application of the acquisition method of accounting for business combinations requires management to make significant estimates and assumptions

in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration

between assets that are depreciated and amortized from goodwill.

The fair value assigned to tangible and intangible assets acquired and

liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including

valuations that utilize customary valuation procedures and techniques.

Significant assumptions and estimates include, but are not limited

to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost

savings expected to be derived from acquiring an asset, if applicable.

the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the Company’s financial

statements may be exposed to potential impairment of the intangible assets and goodwill.

the Company’s investment involves the acquisition of an asset or group of assets that does not meet the definition of a business,

the transaction is accounted for as an asset acquisition.

An asset acquisition is recorded at cost, which includes capitalizing transaction

costs, and does not result in the recognition of goodwill.

July 25, 2024, the Company acquired intangible assets of $ 76,400,000 and recognized goodwill of $ 21,372,960 pursuant to the Scienture

acquisition (see Note 3).

The acquired goodwill represents the value in excess of the net assets and liabilities acquired at the acquisition

is an asset representing the excess cost over the fair market value of net assets acquired in business combinations.

In accordance with

Intangibles - Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis

when indicators of potential impairment exist.

The deferred offering costs are charged to additional paid-in

capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed.

of September 30, 2025, the Company has capitalized $ 0 in deferred offering costs.

During the nine months ended September 30, 2025, $ 1,089,386

of deferred offering costs, including $ 534,800 capitalized as of December 31, 2024, were charged to additional paid-in capital upon the

Company’s equity offering.

The Company accounts for

acquisitions and investments in businesses as business combinations if the target meets the definition of a business and (a) the target

is a variable interest entity and the Company is the target’s primary beneficiary, and therefore the Company must consolidate its

financial statements, or (b) the Company acquires more than 50% of the voting interest of the target and it was not previously consolidated.

The Company records business combinations using the acquisition method of accounting, which requires all the assets acquired and liabilities

assumed to be recorded at fair value as of the acquisition date.

The excess of the purchase price over the estimated fair values of the

net tangible and intangible assets acquired is recorded as goodwill.

The application of the acquisition

method of accounting for business combinations requires management to make significant estimates and assumptions in the determination

of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets

that are depreciated and amortized from goodwill.

The fair value assigned to tangible and intangible assets acquired and liabilities

assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations

that utilize customary valuation procedures and techniques.

Significant assumptions and estimates include, but are not limited to, the

cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings

expected to be derived from acquiring an asset, if applicable.

If the actual results differ

from the estimates and judgments used in these estimates, the amounts recorded in the Company’s financial statements may be exposed

to potential impairment of the intangible assets and goodwill.

If the Company’s investment

involves the acquisition of an asset or group of assets that does not meet the definition of a business, the transaction is accounted

for as an asset acquisition.

An asset acquisition is recorded at cost, which includes capitalizing transaction costs, and does not result

in the recognition of goodwill.

On July 25, 2024, the Company

acquired intangible assets of $ 76,400,000 and recognized goodwill of $ 21,372,960 pursuant to the Scienture acquisition (see Note 3).

The acquired goodwill represents the value in excess of the net assets and liabilities acquired at the acquisition date.

Goodwill is an asset representing

the excess cost over the fair market value of net assets acquired in business combinations.

In accordance with Intangibles - Goodwill

and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis when indicators of potential

impairment exist.

Goodwill is tested for impairment at the reporting unit level.

The Company’s reporting

units discrete financial information is available and management regularly reviews the operating results.

For purposes of impairment

testing, goodwill is allocated to the applicable reporting units based on the reporting structure.

Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting

unit is less than its carrying value.

Qualitative factors assessed for each of the applicable reporting units include, but are not limited

to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and

financial performance of the reporting units.

If the qualitative assessment indicates that it is more likely than not that the carrying

value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

Company also has the option to proceed directly to the quantitative test.

Under the quantitative impairment test, the estimated fair

value of each reporting unit is compared to its carrying value, including goodwill.

If the carrying value of the reporting unit including

goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated

to that reporting unit.

The Company’s reporting units discrete financial

information is available and management regularly reviews the operating results.

For purposes of impairment testing, goodwill is allocated

to the applicable reporting units based on the reporting structure.

The Company has the option

to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than

its carrying value.

Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes

in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and financial

performance of the reporting units.

If the qualitative assessment indicates that it is more likely than not that the carrying value of

a reporting unit exceeds its estimated fair value, a quantitative test is required.

The Company also has the

option to proceed directly to the quantitative test.

Under the quantitative impairment test, the estimated fair value of each reporting

unit is compared to its carrying value, including goodwill.

If the carrying value of the reporting unit including goodwill exceeds its

fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated to that reporting

Management can resume the qualitative assessment in any subsequent period for any reporting unit.

of June 30, 2025, management performed a qualitative impairment assessment of our reporting units, of which there were no

indications that it was more likely than not that the fair value of our reporting units were less than their respective carrying

As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized during the three and six

months ended June 30, 2025 and 2024.

connection with the Scienture acquisition, the Company identified product technologies assets.

The product technologies represent a broad

range of novel product candidates including new potential treatments for hypertension, migraine, pain and thrombosis and other related

Each of the product technologies are in various phases of development and had not achieved regulatory approval as of the valuation

product technologies are 505(b)(2) products and represent modifications and new delivery methods of already approved drugs (rather than

novel drug compounds/formulations/treatments which require significant regulatory approvals and testing).

These assets should be amortized

over their expected remaining economic life.

The product technology assets will remain unamortized, subject to potential impairment testing,

until the assets are placed in service, which is when commercialization of the product commences.

At that point, the assets will be amortized

over their expected remaining life (likely a period of 15 - 20 years based on the patent lives).

of Long-Lived Assets

Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be

When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by

determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows.

of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess

of the carrying amount over the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or

the fair value less costs to sell.

Company did not record an impairment charge for the three and six months ended June 30, 2025 and 2024.

Company accounts for stock-based compensation to employees in accordance with ASC 718, “Compensation-Stock Compensation.”

ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including

stock options, based on the grant date fair value of the award and to recognize it as compensation expense over the period the employee

is required to provide service in exchange for the award, usually the vesting period.

Stock option forfeitures are recognized at the

date of employee termination.

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2018-07

for the accounting of share-based payments granted to non-employees for goods and services.

Company accounts for its leases under ASC 842, “Leases.” Under this guidance, arrangements meeting the definition of a lease are classified

as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability,

calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental

borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized

over the lease term.

As of September 30, 2025,

management performed a qualitative impairment assessment of our reporting units, of which there were no indications that it was more

likely than not that the fair value of our reporting units were less than their respective carrying values.

As such, a quantitative goodwill

test was not required, and no goodwill impairment was recognized during the three and nine months ended September 30, 2025 and 2024.

Intangible Assets

In connection with the Scienture

acquisition, the Company identified product technologies assets.

The product technologies represent a broad range of novel product candidates

including new potential treatments for hypertension, migraine, pain and thrombosis and other related disorders.

Each of the product technologies

are in various phases of development and had not achieved regulatory approval as of the valuation date.

The product technologies

are 505(b)(2) products and represent modifications and new delivery methods of already approved drugs (rather than novel drug compounds/formulations/treatments

which require significant regulatory approvals and testing).

These assets should be amortized over their expected remaining economic

The product technology assets will remain unamortized, subject to potential impairment testing, until the assets are placed in

service, which is when commercialization of the product commences.

At that point, the assets will be amortized over their expected remaining

life (likely a period of 15 - 20 years based on the patent lives).

Impairment of Long-Lived Assets

The Company continually monitors

events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable.

When such events

or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying

value of such assets will be recovered through undiscounted expected future cash flows.

If the total of the future cash flows is less

than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the

fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

The Company did not record

an impairment charge for the three and nine months ended September 30, 2025 and 2024.

Stock-Based Compensation

The Company accounts for

stock-based compensation to employees in accordance with ASC 718, “Compensation-Stock Compensation.” ASC 718 requires companies

to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the

grant date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service

in exchange for the award, usually the vesting period.

Stock option forfeitures are recognized at the date of employee termination.

January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2018-07 for the accounting of share-based payments

granted to non-employees for goods and services.

The Company accounts for

its leases under ASC 842, “Leases.” Under this guidance, arrangements meeting the definition of a lease are classified as

operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated

by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing

Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the

For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line

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Variable lease expenses are recorded when incurred.

calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components.

excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes

rent expense on a straight-line basis over the lease term.

& Development Expenses

and development costs are expensed in the period incurred in accordance with ASC 730, “Research and Development.” These expenses consist

In calculating the right

of use asset and lease liability, the Company has elected to combine lease and non-lease components.

The Company excludes short-term

leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense

on a straight-line basis over the lease term.

Research & Development Expenses

Research and development

costs are expensed in the period incurred in accordance with ASC 730, “Research and Development.” These expenses consist

of independent contractor costs, costs for outsourced analytical research and development activities, batch manufacturing cost and, advisory

costs as a part of research, market research costs and other regulatory consulting costs.

(loss) Per Common Share

net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common

shares outstanding.

Diluted net income per common share is computed similar to basic net income per common share except that the denominator

is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been

issued and if the additional common shares were dilutive.

The dilutive effect of the Company’s options and warrants is computed

using the treasury stock method.

As of June 30, 2025, we had 238,594 outstanding warrants and 2,270,672 stock options, each exercisable for shares

Income (loss) Per Common Share

Basic net income per common

share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding.

Diluted net income per common share is computed similar to basic net income per common share except that the denominator is increased

to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and

if the additional common shares were dilutive.

The dilutive effect of the Company’s options and warrants is computed using the

treasury stock method.

As of September 30, 2025, we had 177,536 outstanding warrants and 20,676 stock options, each exercisable for shares

of common stock, as well as 15,759 shares of Series B Preferred Stock outstanding.

following table sets forth the computation of basic and diluted loss per share:

The following table sets forth the computation

of basic and diluted loss per share:

SCHEDULE OF BASIC AND DILUTIVE LOSS PER SHARE

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net loss from continuing operations

3 unchanged sentences

$ ( 11,441,764 )

Net income (loss) on discontinued operations

Net income (loss)

Net income on discontinued operations

Net (loss) income

$ ( 3,607,361 )

3 unchanged sentences

Net loss per common share from continuing operations

Net (loss) income per common share from discontinued operations

Net income per common share from discontinued operations

Net (loss) income

Company’s provision for income taxes was $ 0

for the three and six months ended June 30, 2025 and 2024.

The income tax provisions for these periods are based upon estimates of

annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which the Company

For all periods presented, the Company utilized net operating loss carryforwards to offset the impact of any taxable

The Company’s tax rate differs from the applicable statutory rates due primarily to the establishment of a valuation

allowance, utilization of deferred and the effect of permanent differences and adjustments.

Issued Accounting Pronouncements

The Company’s provision

for income taxes was $ 0 for the three and nine months ended September 30, 2025 and 2024.

The income tax provisions for these periods

are based upon estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in

which the Company operates.

For all periods presented, the Company utilized net operating loss carryforwards to offset the impact of

any taxable income.

The Company’s tax rate differs from the applicable statutory rates due primarily to the establishment of a

valuation allowance, utilization of deferred and the effect of permanent differences and adjustments.

Recently Issued Accounting Pronouncements

In November 2024, the Financial

4 unchanged sentences

format the nature of certain expenses that are included in specific income statement line items.

The objective of the standard is to provide

greater transparency into the types of costs incurred by an entity, particularly in areas such as cost of revenue and selling, general,

and administrative expenses.

The ASU requires disaggregation of relevant expense captions by natural classification, including amounts

for inventory purchases, employee compensation, depreciation and intangible asset amortization.

are also required to disclose total selling

expenses and define what is included in that category.

The guidance is effective for

annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027.

Early adoption

is permitted.

The objective of the standard is to

provide greater transparency into the types of costs incurred by an entity, particularly in areas such as cost of revenue and selling,

general, and administrative expenses.

The ASU requires disaggregation of relevant expense captions by natural classification, including

amounts for inventory purchases, employee compensation, depreciation and intangible asset amortization.

are also required to disclose

total selling expenses and define what is included in that category.

The guidance is effective

for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027.

adoption is permitted.

The standard must be applied on a prospective basis, with retrospective application permitted as an option.

The Company is currently evaluating

the impact of this standard on its disclosures and anticipates it will result in additional footnote disclosures, but does not expect

the adoption to have a material impact on its consolidated financial position, results of operations, or cash flows.

does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying

financial statements.

The Company is currently

evaluating the impact of this standard on its disclosures and anticipates it will result in additional footnote disclosures, but does

not expect the adoption to have a material impact on its consolidated financial position, results of operations, or cash flows.

Management does not believe

that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

2 – GOING CONCERN

accompanying interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern,

which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the

date the consolidated financial statements are issued.

In accordance with Financial Accounting Standards Board (“ FASB ”)

Accounting Standards Update No.

2014-15, “Presentation of Financial Statements - Going Concern” (Subtopic 205-40), our management evaluates

whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going

concern within one year after the date that the financial statements are issued.

of June 30, 2025, the Company had an accumulated deficit of $ 48,823,543 .

As of June 30, 2025, the Company had $ 15,391 in cash.

Company will need to raise additional capital or secure debt funding to support on-going operations, and to fund the operations

of any businesses or assets we acquire.

The sources of this capital are expected to be the sale of equity and debt, which may not be

available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders.

If we are unable to access

additional capital moving forward, it may hurt our ability to grow and to generate future revenues, our financial position, and liquidity.

These factors raise substantial doubt about the ability of the Company to continue as a going concern.

Unless management is able to obtain

additional financing, it is unlikely that the Company will be able to meet its funding requirements during the next 12 months.

The financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

3 – ACQUISITIONS AND DISPOSITIONS

Company evaluated the Agreement and Plan of Merger, dated July 25, 2024, by and among the Company, MEDS Merger Sub I, Inc., MEDS Merger

Sub II, LLC, and Scienture (the “ Scienture Merger Agreement ”) pursuant to ASC 805 and ASU 2017-01, Topic

805, “Business Combinations.” The Company first determined that Scienture met the definition of a business as it includes inputs and a

substantive process that together significantly contribute to the ability to create outputs.

Scienture’s results of operations

are included in the Company’s consolidated financial statements from the date of acquisition.

The acquisition method of accounting

requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated

respective fair values as of the closing date of the acquisition.

Goodwill recognized in connection with this transaction represents

primarily the potential economic benefits that the Company believes may arise from the acquisition.

The purchase price allocation is

preliminary and could be significantly revised as a result of additional information obtained regarding assets acquired and liabilities

assumed and revisions of estimates of fair values of tangible assets and related deferred tax assets and liabilities.

The Company will

finalize its valuation and the allocation of the purchase price, along with required retrospective adjustments, if any, within a year

following the acquisition date.

On July 25, 2024, the parties consummated the mergers contemplated

by the Scienture Merger Agreement (together, the “Scienture Merger”) and the Company issued 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock at the closing.

The aggregate fair value of the purchase price consideration was $ 78,646,184 .

The fair value was determined by the

underlying stock price of the common stock on the date of the Scienture Merger, which was $ 11.63 per share, which was utilized for both

the issuance of common and preferred stock after evaluating the terms of the Series X Preferred Stock.

The Company also applied a discount

for lack of marketability of 5% due to certain lock-up terms on the shares issued.

following summarizes the purchase price consideration and the preliminary purchase price allocation as of the acquisition date:

NOTE 2 – GOING CONCERN

The accompanying interim

consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization

of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial

statements are issued.

In accordance with Financial Accounting Standards Board (“ FASB ”) Accounting Standards

2014-15, “Presentation of Financial Statements - Going Concern” (Subtopic 205-40), our management evaluates whether

there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern

within one year after the date that the financial statements are issued.

As of September 30, 2025,

the Company had an accumulated deficit of $ 52,430,904 .

As of September 30, 2025, the Company had $ 355,692 in cash.

The Company will need to

raise additional capital or secure debt funding to support on-going operations, and to fund the operations of any businesses or assets

The sources of this capital are expected to be the sale of equity and debt, which may not be available on favorable terms,

if at all, and may, if sold, cause significant dilution to existing stockholders.

If we are unable to access additional capital moving

forward, it may hurt our ability to grow and to generate future revenues, our financial position, and liquidity.

These factors raise

substantial doubt about the ability of the Company to continue as a going concern.

Unless management is able to obtain additional financing,

it is unlikely that the Company will be able to meet its funding requirements during the next 12 months.

The financial statements do

not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 – ACQUISITIONS AND DISPOSITIONS

Scienture, Inc.

The Company evaluated the

Agreement and Plan of Merger, dated July 25, 2024, by and among the Company, MEDS Merger Sub I, Inc., MEDS Merger Sub II, LLC, and Scienture

(the “ Scienture Merger Agreement ”) pursuant to ASC 805 and ASU 2017-01, Topic 805, “Business Combinations.”

The Company first determined that Scienture met the definition of a business as it includes inputs and a substantive process that together

significantly contribute to the ability to create outputs.

Scienture’s results of operations are included in the Company’s

consolidated financial statements from the date of acquisition.

The acquisition method of accounting requires, among other things, that

the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the

closing date of the acquisition.

Goodwill recognized in connection with this transaction represents primarily the potential economic

benefits that the Company believes may arise from the acquisition.

The purchase price allocation is preliminary and could be significantly

revised as a result of additional information obtained regarding assets acquired and liabilities assumed and revisions of estimates of

fair values of tangible assets and related deferred tax assets and liabilities.

The Company will finalize its valuation and the allocation

of the purchase price, along with required retrospective adjustments, if any, within a year following the acquisition date.

On July 25, 2024, the parties

consummated the mergers contemplated by the Scienture Merger Agreement (together, the “Scienture Merger”) and the Company

issued 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock at the closing.

The aggregate fair value of the

purchase price consideration was $ 78,646,184 .

The fair value was determined by the underlying stock price of the common stock on the

date of the Scienture Merger, which was $ 11.63 per share, which was utilized for both the issuance of common and preferred stock after

evaluating the terms of the Series X Preferred Stock.

The Company also applied a discount for lack of marketability of 5% due to certain

lock-up terms on the shares issued.

The following summarizes

the purchase price consideration and the preliminary purchase price allocation as of the acquisition date:

OF PURCHASE PRICE ALLOCATION

18 unchanged sentences

Net assets acquired

is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible

assets that do not qualify for separate recognition.

Goodwill is primarily attributable

to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify

for separate recognition.

The goodwill is not deductible for tax purposes.

Pro Forma Financial Information

following unaudited pro forma financial information presents the Company’s financial results as if the Scienture Merger had occurred

as of January 1, 2024.

The unaudited pro forma financial information is not necessarily indicative of what the financial results actually

would have been had the acquisitions been completed on this date.

In addition, the unaudited pro forma financial information is not indicative

of, nor does it purport to project, the Company’s future financial results.

The pro forma information does not give effect to any

estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

Unaudited Pro Forma Financial

The following unaudited pro

forma financial information presents the Company’s financial results as if the Scienture Merger had occurred as of January 1, 2024.

The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had

the acquisitions been completed on this date.

In addition, the unaudited pro forma financial information is not indicative of, nor does

it purport to project, the Company’s future financial results.

The pro forma information does not give effect to any estimated

and potential cost savings or other operating efficiencies that could result from the acquisition:

SCHEDULE OF PRO

FORMA FINANCIAL INFORMATION

Six Months Ended

June 30, 2024

September 30,

Net loss from continuing operations

$ ( 3,183,601 )

$ ( 12,657,239 )

Net loss from continuing operations per share

and Divestitures

Dispositions and Divestitures

Refer to Note 1 for further

detail on the disposition of the Company’s legacy subsidiaries.

On February 16, 2024, the Company, together with Softell and Micro

Merchant Systems, Inc.

(“ MMS ”), entered into an asset purchase agreement (the “ MMS APA ”)

under which MMS agreed to purchase for cash substantially all of the assets of Softell.

On February 16, 2024, the parties consummated

the closing of the transactions contemplated by the MMS APA.

The purchase price paid at closing was $ 22,660,182 .

Because MMS received $ 1,600,000

or greater in certain collections from third parties resulting from any products or services sold, or provided, by the business assets

and operations acquired from Softell during the period ending on the four-month anniversary of the closing date, the Company was due

an additional $ 7,500,000 payment from MMS.

On February 16, 2024, the

Company, together with Softell and Micro Merchant Systems, Inc.

(“ MMS ”), entered into an asset purchase agreement

(the “ MMS APA ”) under which MMS agreed to purchase for cash substantially all of the assets of Softell.

February 16, 2024, the parties consummated the closing of the transactions contemplated by the MMS APA.

The purchase price paid at closing

was $ 22,660,182 .

Because MMS received $ 1,600,000 or greater in certain collections from third parties resulting from any products or

services sold, or provided, by the business assets and operations acquired from Softell during the period ending on the four-month anniversary

of the closing date, the Company was due an additional $ 7,500,000 payment from MMS.

The Company received the payment in May 2024.

MMS APA was accounted for a business disposition in accordance with ASC 810-40-40-3A.

As of February 16, 2024, the Company no longer

consolidated the assets, liabilities, revenues and expenses of Softell.

The MMS APA was accounted

for a business disposition in accordance with ASC 810-40-40-3A.

As of February 16, 2024, the Company no longer consolidated the assets,

liabilities, revenues and expenses of Softell.

The components of the disposition are as follows:

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Gain on disposition of business

gain on disposition of business of $ 29,685,946 was included in income from discontinued operations, net of tax in the consolidated statements

of operations of the year ended December 31, 2024.

On March 5, 2024, the Company entered into a Stock Purchase Agreement

with Superlatus Inc.

The gain on disposition of

business of $ 29,685,946 was included in income from discontinued operations, net of tax in the consolidated statements of operations

of the year ended December 31, 2024.

Superlatus SPA

On March 5, 2024, the Company

entered into a Stock Purchase Agreement with Superlatus Inc.

(the “ Superlatus SPA ”) .

Pursuant to the Superlatus SPA, the Company sold all of

the issued and outstanding stock of Superlatus Inc.

Pursuant to the

Superlatus SPA, the Company sold all of the issued and outstanding stock of Superlatus Inc.

to Superlatus Foods Inc.

(the “ Buyer ”).

The $ 1.00 purchase

price for the stock was delivered to the Company at the closing, which occurred simultaneously with the execution of the Superlatus

The $ 1.00 purchase price for the stock was delivered to the Company at the closing, which occurred simultaneously with the execution

of the Superlatus SPA.

As a result of the transaction, Superlatus Inc.

ceased to be a subsidiary of the Company, and the rights and assets of

Superlatus together with various liabilities and obligations that were specific to Superlatus Inc.

ceased to be a subsidiary of the Company, and the rights and assets

of Superlatus together with various liabilities and obligations that were specific to Superlatus Inc.

became rights and obligations of

transaction was accounted for a business disposition in accordance with ASC 810-40-40-3A.

As of March 5, 2024, the Company no longer

consolidated the assets, liabilities, revenues and expenses of Superlatus Inc.

The components of the disposition are as

The transaction was accounted

for a business disposition in accordance with ASC 810-40-40-3A.

As of March 5, 2024, the Company no longer consolidated the assets, liabilities,

revenues and expenses of Superlatus Inc.

The components of the disposition are as follows:

OF BUSINESS ACQUISITIONS ASSETS AND LIABILITIES

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$ ( 2,083,742 )

loss of disposition of business of $ 2,083,742 was included in income from discontinued operations, net of tax in the consolidated statements

of operations of the year ended December 31, 2024.

The loss of disposition of

business of $ 2,083,742 was included in income from discontinued operations, net of tax in the consolidated statements of operations of

the year ended December 31, 2024.

Disposition of Legacy Subsidiaries

See Notes 1 and 4 for detailed discussion.

accordance with the provisions of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing

operations in the accompanying consolidated statements of operations for the three and six months ended June 30, 2025 and 2024.

of the discontinued operations for the three and six months ended June 30, 2025 and 2024 consist of the following:

See Notes 1 and 4 for detailed

Discontinued Operations

In accordance with the provisions

of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing operations in the accompanying

consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024.

The results of the discontinued

operations for the three and nine months ended September 30, 2025 and 2024 consist of the following:

OF DISCONTINUED OPERATIONS

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Three Months Ended

Cost of sales

September 30,

Cost of goods sold

Gross profit (loss)

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Professional fees

Technology expense

General and administrative

Technology expense

Total operating expenses

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Total non-operating income (expense)

Net loss on discontinued operations

$ ( 209,161 )

Six Months Ended

Cost of sales

Net income on discontinued operations

Nine Months Ended

September 30,

Cost of goods sold

Gross profit loss

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( 2,083,742 )

Total non-operating income (expense)

Total non-operating income

( 2,083,742 )

1 unchanged sentence

$ ( 2,083,742 )

the second quarter of 2024, the Company determined to dissolve Bonum Health, Inc.

and Bonum Health, LLC, and have presented the results

of operations in net income (loss) from discontinued operations.

4- RELATED PARTY TRANSACTIONS

Health and Tollo Health

November 21, 2023, but effective September 14, 2023, the Company issued a promissory note (the “ Wellgistics

Note ”) to Wellgistics Health, Inc.

(f/k/a Danam Health Inc.) (“ Wellgistics ”) in the amount

of $ 300,000 .

The Company prepaid $ 250,000 prior

to the execution date.

In the second quarter of

2024, the Company determined to dissolve Bonum Health, Inc.

and Bonum Health, LLC, and have presented the results of operations in net

income (loss) from discontinued operations.

NOTE 4- RELATED PARTY TRANSACTIONS

Wellgistics Health and

On November 21, 2023, but

effective September 14, 2023, the Company issued a promissory note (the “ Wellgistics Note ”) to Wellgistics

(f/k/a Danam Health Inc.) (“ Wellgistics ”) in the amount of $ 300,000 .

The Company prepaid $ 250,000

prior to the execution date.

The Wellgistics Note did not accrue interest.

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The Wellgistics Note was fully paid off in February 2024.

of March 31, 2025, other receivables included a $ 3,828,769

receivable from Wellgistics and $ 215,000

receivable from Tollo.

As of March 31, 2025, other

receivables included a $ 3,828,769 receivable from Wellgistics and $ 215,000 receivable from Tollo.

The receivables were unsecured, non-interest

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April 30, 2025.

April 30, 2025, the Company completed the sale of its subsidiaries, IPS, Softell, and Bonum Health, Inc.

to Tollo in exchange for a

promissory note bearing interest at the prime rate and maturing on June

The note requires Tollo to repay 20 %

of any future equity financing proceeds toward the outstanding balance.

In connection with the transaction, the Company recorded a

promissory note receivable, and derecognized subsidiaries’ accounts payable of $ 117,162 ,

other receivables of $ 4,219,239 ,

operating lease right-of-use assets of $ 142,138 ,

operating lease liability of $ 158,687

and a related party note receivable of $ 1,300,000 .

As such, the Company recognized a loss on disposition of $ 385,528 .

On April 30, 2025, the Company

completed the sale of its subsidiaries, IPS, Softell, and Bonum Health, Inc.

to Tollo in exchange for a $ 5,000,000 promissory note bearing

interest at the prime rate and maturing on June 30, 2030 .

The note requires Tollo to repay 20 % of any future equity financing proceeds

toward the outstanding balance.

In connection with the transaction, the Company recorded a $ 5,000,000 promissory note receivable, and

derecognized subsidiaries’ accounts payable of $ 117,162 , other receivables of $ 4,219,239 , operating lease right-of-use assets of

$ 142,138 , operating lease liability of $ 158,687 and a related party note receivable of $ 1,300,000 .

As such, the Company recognized a

loss on disposition of $ 385,528 .

On June 24, 2025, the promissory note was assigned by Tollo to Integral Health, Inc.

As of June 30, 2025, the note receivable with

Integral Health, Inc.

was outstanding and the Company recognized $ 62,500

in interest income.

Note 6 for detail on the note receivable from Wood Sage, LLC.

In August 2025, Integral Health, including its subsidiary IPS, were acquired by third parties.

Therefore, at September

30, 2025, Integral Health and Tollo was no longer considered a related party.

As of September 30, 2025, the note receivable was outstanding

and the Company recognized $ 62,500 in interest income, which was reclassified from note receivable, related party to note receivable on

the consolidated balance sheet.

See Note 6 for detail on

the note receivable from Wood Sage, LLC.

Suren Ajjarapu, the Company’s

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interest in Tollo as of June 30, 2025.

July 2024, the executives of Scienture issued short-term loans to Scienture for an aggregate amount of $ 265,000 .

The loans are unsecured,

non-interest bearing and due on demand.

The loans were still outstanding as of June 30, 2025.

November 2024, an executive of Scienture issued a short-term loan to Scienture for $ 150,000 .

The loans is unsecured, non-interest bearing and due on demand.

The loan was outstanding as of June 30, 2025.

February 2025, the executives of Scienture issued a short-term loan to Scienture for $ 100,000 .

The loan is unsecured, non-interest bearing

and due on demand.

The loan was outstanding as of June 30, 2025.

5 – REVENUE RECOGNITION

The Company historically derived

revenue from one primary source—product revenue.

revenue consists of resale of pharmaceutical products to pharmacies.

Revenue is recognized when the product is shipped to the

for the three months ended June 30, 2025 and 2024 were $ 0 and

respectively.

Revenues for the six months ended June 30, 2025 and 2024 were $ 10,258 and

respectively.

6 – NOTES RECEIVABLE – RELATED PARTY

August 22, 2023, the Company received a Promissory Note (the “ Wood Sage Note ”) in the amount of $ 1,300,000 from

Wood Sage, LLC.

The Wood Sage Note bears no interest and is currently due and payable.

As of June 30, 2025 and December 31, 2024, the

outstanding balance of the Wood Sage Note was $ 0 and

$ 1,300,000 ,

respectively.

In August 2025, Integral Health, including its subsidiary IPS, were acquired by third parties.

Therefore, at September

30, 2025, Integral Health and Tollo was no longer considered a related party.

In July 2024, the executives

of Scienture issued short-term loans to Scienture for an aggregate amount of $ 265,000 .

The loans are unsecured, interest bearing at the minimum applicable federal rate per

annum, and due on demand.

The loans were still outstanding as of September 30, 2025, and fully repaid in October 2025.

In November 2024, an

executive of Scienture issued a short-term loan to Scienture for $ 150,000 .

The loan is unsecured, interest bearing at the minimum applicable federal rate per annum, and due on demand.

outstanding as of September 30, 2025, and fully repaid in October 2025.

In February 2025, an

executive of Scienture issued a short-term loan to Scienture for $ 100,000 .

The loan is unsecured, interest bearing at the minimum applicable federal rate per annum, and due on demand.

The loans were

outstanding as of September 30, 2025, and fully repaid in October 2025.

In February 2025, an

executive of Scienture issued a short-term loan to Scienture for $ 16,000 .

The loan is unsecured, interest bearing at the minimum applicable federal rate per annum, and due on demand.

outstanding as of September 30, 2025, and fully repaid in October 2025.

NOTE 5 – REVENUE RECOGNITION

The Company derives revenue

from one primary source—product revenue.

Product revenue consists of pharmaceutical products sold via wholesale distribution channels.

The Company recognizes revenue when control of the pharmaceutical products is transferred to wholesale distributors, which generally

occurs upon delivery to the customer.

Revenue is measured based on the transaction price specified in the contract, net of estimated

gross-to-net adjustments, including rebates, chargebacks, discounts, and other sales allowances.

These estimates are based

on historical experience, current contractual terms, and other relevant factors, and are updated at each reporting period to reflect

changes in circumstances.

Any adjustments to these estimates are recognized in the period in which such changes become known.

Revenues for the three months

ended June 30, 2025 and 2024 were $ 590,050 and $ 64,861 , respectively.

Revenues for the nine months ended September 30, 2025 and 2024

were $ 600,308 and $ 83,560 , respectively.

NOTE 6 – NOTES RECEIVABLE – RELATED

On August 22, 2023, the Company

received a Promissory Note (the “ Wood Sage Note ”) in the amount of $ 1,300,000 from Wood Sage, LLC.

Sage Note bears no interest and is currently due and payable.

As of September 30, 2025 and December 31, 2024, the outstanding balance

of the Wood Sage Note was $ 0 and $ 1,300,000 , respectively.

The note was held by Softell, a former subsidiary of the Company.

April 30, 2025, the Company completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo in exchange for a $ 5,000,000 promissory

note bearing interest at the prime rate and maturing on June

30, 2030 (see Notes 1 and 4) .

7 – GOODWILL AND INTANGIBLE ASSETS

connection with the Scienture Merger on July 25, 2024, the Company recorded goodwill of $ 21,372,960 and intangible assets of $ 76,400,000 .

purchase price allocation of intangible assets was evaluated under ASC 805.

The identified intangible assets were determined to be product

technologies, and were valued accordingly by each product candidate:

On April 30, 2025, the Company

completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo in exchange for a $ 5,000,000 promissory note bearing

interest at the prime rate and maturing on June 30, 2030 (see Notes 1 and 4).

In August 2025, Integral Health, including its subsidiary IPS, were acquired by third parties.

Therefore, at September

30, 2025, Integral Health and Tollo was no longer considered a related party, which was reclassified from note receivable, related party

to note receivable on the consolidated balance sheet.

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

In connection with the Scienture

Merger on July 25, 2024, the Company recorded goodwill of $ 21,372,960 and intangible assets of $ 76,400,000 .

The purchase price allocation

of intangible assets was evaluated under ASC 805.

The identified intangible assets were determined to be product technologies, and were

valued accordingly by each product candidate:

OF INTANGIBLE ASSETS WERE DETERMINED TO BE PRODUCT TECHNOLOGIES

Product Candidate

received regulatory approval in March 2025, with product commercialization projected to begin in 2025.

expects SCN-104 to achieve regulatory approval in late 2027 or early 2028, with product commercialization projected to begin in

expects SCN-106 to achieve regulatory approval in 2027 or 2028, with product commercialization projected to begin in 2028.

expects SCN-107 to achieve regulatory approval in 2028 or 2029, with product commercialization projected to begin in 2029.

fair value of the product technologies was determined by the Income Approach:

SCN-102 received regulatory approval

in March 2025.Product commercialization began in the third quarter of 2025.

Management expects SCN-104 to achieve

regulatory approval in late 2027 or early 2028, with product commercialization projected to begin in 2028.

Management expects SCN-106 to achieve

regulatory approval in 2027 or 2028, with product commercialization projected to begin in 2028.

Management expects SCN-107 to achieve

regulatory approval in 2028 or 2029, with product commercialization projected to begin in 2029.

The fair value of the product

technologies was determined by the Income Approach:

Multi-Period Excess Earnings Methods (“ MPEEM ”).

The MPEEM measures economic benefits by calculating the cash flows attributable to an asset after deducting appropriate returns for contributory

measures economic benefits by calculating the cash flows attributable to an asset after deducting appropriate returns for contributory

assets used by the business in generating the asset’s revenue and earnings.

1 unchanged sentence

through 2030 based on each product candidate’s phase of development.

assumptions include a 2% long-term revenue growth rate and 3% contributory asset charge rate.

The Company discounted the expected future

cash flows at a 53.0% rate of return, equal to the weighted-average cost of capital plus 10%, to reflect the risk

of the cash flows related to the product technologies.

Company then summed the present values of the estimated future cash flows and included an amortization tax benefit to the value indication

of each of the product technologies.

of June 30, 2025, the Company has not begun amortizing any of the product technology intangible assets.

8 – CONVERTIBLE DEBT AND NOTES PAYABLE

Debenture – Arena

November 22, 2024, the Company entered into a Securities Purchase Agreement with the Arena Finance Markets, LP (“ Arena Finance ”),

Arena Special Opportunities Partners III, LP (together with Arena Finance, the “ Arena Investors ”).

Securities Purchase Agreement, the Company will issue 10 %

original issue discount one or more secured convertible debentures

(“ Debentures ”) in a total principal amount of up to $ 12,222,222 ,

Key assumptions include a 2% long-term revenue growth rate

and 3% contributory asset charge rate.

The Company discounted the expected future cash flows at a 53.0% rate of return, equal to the

weighted-average cost of capital plus 10%, to reflect the risk of the cash flows related to the product technologies.

The Company then

summed the present values of the estimated future cash flows and included an amortization tax benefit to the value indication of each

of the product technologies.

As of September 30, 2025,

the Company has not begun amortizing any of the product technology intangible assets.

NOTE 8 – CONVERTIBLE DEBT AND NOTES

Convertible Debenture – Arena

On November 22, 2024,

the Company entered into a Securities Purchase Agreement (the “ Arena SPA ”)

with the Arena Finance Markets, LP (“ Arena Finance ”), Arena Special Opportunities Partners III, LP

(together with Arena Finance, the “ Arena Investors ”).

Under the Securities Purchase Agreement, the Company

will issue 10 %

original issue discount one or more secured convertible debentures (“ Debentures ”) in a total principal

amount of up to $ 12,222,222 ,

divided into up to three separate tranches that are each subject to certain closing conditions.

The conversion price per share of each

Debenture is equal to 92.5 %

of the lowest daily VWAP (as defined in the Debentures) of the Company’s shares of common stock during the five trading day period

ending on the trading day immediately prior to delivery or deemed delivery of the applicable conversion notice, subject to adjustments

related to the trading price of the Company’s common stock.

closing of the first tranche was consummated on November 25, 2024 (the “ First Closing ”) and the Company issued

to the Arena Investors Debentures in an aggregate principal amount of $ 3,333,333

(the “ First Closing Debentures ”).

The First Closing Debentures were sold to the Arena Investors for a purchase price of $ 3,000,000 ,

representing an original issue discount of ten percent ( 10 %).

The conversion price per share of

each Debenture is equal to 92.5 %

of the lowest daily VWAP (as defined in the Debentures) of the Company’s shares of common stock during the five trading day

period ending on the trading day immediately prior to delivery or deemed delivery of the applicable conversion notice, subject to

adjustments related to the trading price of the Company’s common stock.

The closing of the first

tranche was consummated on November 25, 2024 (the “ First Closing ”) and the Company issued to the Arena Investors

Debentures in an aggregate principal amount of $ 3,333,333 (the “ First Closing Debentures ”).

The First Closing

Debentures were sold to the Arena Investors for a purchase price of $ 3,000,000 , representing an original issue discount of ten percent

The convertible debenture will mature eighteen months from the First Closing.

First Closing Debentures contain customary events of default.

If an event of default occurs, until it is cured, the holder may increase

the interest rate applicable to the First Closing Debentures to two percent ( 2 %)

per annum and accelerate the full indebtedness under the First Closing Debentures, in an amount equal to 125 %

of the outstanding principal amount and accrued and unpaid interest.

Subject to limited exceptions , the First Closing Debentures prohibit

the Company and, as applicable, its subsidiaries from incurring any new indebtedness that is not subordinated to the First Closing Debentures

and, as applicable, any subsidiary’s obligations in respect of the First Closing Debentures until the First Closing Debentures

are paid in full.

consideration for the Arena Investors’ consummation of the First Closing, concurrently with the First Closing, the Company issued

to each Arena Investor participating in the First Closing its pro rata portion of the 55,000

shares of common stock (the “ SPA Commitment Fee

Shares ”) issued to the Arena Investors as a commitment fee upon the execution of the Securities Purchase Agreement.

as consideration for the Arena Investors’ consummation of subsequent closings, the Company shall issue to the Arena Investors participating

in such closing a certain number of Company common stock as agreed upon among the Company and the Arena Investors participating.

fair value of the shares of common stock issued was $ 420,200 ,

which was included as a debt discount as noted below.

The First Closing Debentures

contain customary events of default.

If an event of default occurs, until it is cured, the holder may increase the interest rate applicable

to the First Closing Debentures to two percent ( 2 %) per annum and accelerate the full indebtedness under the First Closing Debentures,

in an amount equal to 125 % of the outstanding principal amount and accrued and unpaid interest.

Subject to limited exceptions , the First

Closing Debentures prohibit the Company and, as applicable, its subsidiaries from incurring any new indebtedness that is not subordinated

to the First Closing Debentures and, as applicable, any subsidiary’s obligations in respect of the First Closing Debentures until

the First Closing Debentures are paid in full.

As consideration for the

Arena Investors’ consummation of the First Closing, concurrently with the First Closing, the Company issued to each Arena Investor

participating in the First Closing its pro rata portion of the 55,000 shares of common stock (the “ SPA Commitment Fee Shares ”)

issued to the Arena Investors as a commitment fee upon the execution of the Securities Purchase Agreement.

Furthermore, as consideration

for the Arena Investors’ consummation of subsequent closings, the Company shall issue to the Arena Investors participating in such

closing a certain number of Company common stock as agreed upon among the Company and the Arena Investors participating.

The fair value

of the shares of common stock issued was $ 420,200 , which was included as a debt discount as noted below.

Pursuant to a Security Agreement,

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to guarantee the prompt payment.

Interest accrues on the

outstanding principal amount of this Debenture at a rate equal to 10.00 %

per annum paid in kind (the “ PIK Interest ”) unless there is an Event of Default (as defined in the

Debenture), in which case Default Interest accrues and is payable instead of PIK Interest.

Any PIK Interest is added to the

outstanding principal amount of the Debenture on a monthly basis as additional principal obligations hereunder and shall

automatically and thereafter constitute a part of the outstanding principal amount for all purposes hereof (including the accrual of

interest thereon at the rates applicable to the principal amount generally).

The Company will not issue additional debentures to

satisfy and pay any PIK Interest.

Interest is calculated on the basis of a 360-day year, consisting of twelve 30 calendar day

periods, and accrues daily commencing on the Original Issue Date (as defined in the Debenture) until payment in full of the

outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due

hereunder, has been made.

the three and six months ended June 30, 2025, the Company accrued $ 87,229 and $ 171,396 , respectively, in interest expense pertaining

to the First Closing Debentures.

a result of the First Closing Debentures, the Company recognized an aggregate debt discount of $ 3,333,333 .

Through December 31, 2024, $ 869,692 of the

debt discount was amortized to interest expense.

During the three and six months ended June 30, 2025, $ 485,523 and $ 965,709 , respectively,

Interest accrues on the outstanding

principal amount of this Debenture at a rate equal to 10.00 % per annum paid in kind (the “ PIK Interest ”) unless

there is an Event of Default (as defined in the Debenture), in which case Default Interest accrues and is payable instead of PIK Interest.

Any PIK Interest is added to the outstanding principal amount of the Debenture on a monthly basis as additional principal obligations

hereunder and shall automatically and thereafter constitute a part of the outstanding principal amount for all purposes hereof (including

the accrual of interest thereon at the rates applicable to the principal amount generally).

The Company will not issue additional debentures

to satisfy and pay any PIK Interest.

Interest is calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods,

and accrues daily commencing on the Original Issue Date (as defined in the Debenture) until payment in full of the outstanding principal,

together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.

During the three and nine

months ended September 30, 2025, the Company accrued $ 17,478 and $ 141,977 , respectively, in interest expense pertaining to the First

Closing Debentures.

As a result of the issuance

of the First Closing Debentures, the Company recognized an aggregate debt discount of $ 3,333,333 .

Through December 31, 2024, $ 869,692

of the debt discount was amortized to interest expense.

At June 30, 2025, the outstanding balance of the First Closing Debentures, including the outstanding

principal of $ 3,333,333 less the unamortized discount of $ 1,755,349 , was $ 1,577,984 .

The following is a summary of the First Closing Debentures:

In February 2025, the Company repaid $ 1,642,143

of principal and accrued interest.

In August and September 2025, the Company repaid aggregate of $ 1,866,501

of the remaining outstanding principal and accrued interest, including a 20 %

early redemption premium, resulting in the immediate amortization of all remaining unamortized debt discount of $ 925,179

and $ 2,721,058

to interest expense during the three and nine months ended September 30, 2025, respectively.

The outstanding amount owed on the First

Closing Debentures was converted during October 2025.

As a result, the First Closing Debentures are no longer outstanding (see Note 15).

The following is a summary

of the First Closing Debentures:

OF THE ARENA DEBENTURES

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Amortization of debt discount

Arena note, net of unamortized debt discount, at June 30, 2025

Company evaluated the terms of the conversion features of the First Closing Debentures as noted above in accordance with ASC Topic

815 - 40, “ Derivatives and Hedging - Contracts in Entity’s Own Stock ,” and determined they are not

indexed to the Company’s common stock and that the conversion feature, which is akin to a redemption feature, meet the

definition of a liability.

The First Closing Debentures contain an indeterminate number of shares to settle with conversion options

outside of the Company’s control.

Therefore, the Company bifurcated the conversion feature and accounted for it as a separate

Arena note, net of unamortized debt discount,

at September 30, 2025

Derivative Liability

Upon issuance of the First Closing Debentures, the Company recognized a derivative liability at a fair value of

$ 2,477,217 ,

which is recorded as a debt discount and will be amortized over the life of the First Closing Debentures.

Company measured the derivative liability at fair value based on significant inputs not observable in the market, which causes it to

be classified as a Level 3 measurement within the fair value hierarchy.

The valuation of the derivative liability uses assumptions and

estimates the Company believes would be made by a market participant in making the same valuation.

The Company assesses these assumptions

and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained.

Changes in the fair value

of the contingent consideration liability related to updated assumptions and estimates are recognized within the statements of operations.

Company valued the derivative liability using a Black-Scholes method using following assumptions:

The Company evaluated the

terms of the conversion features of the First Closing Debentures as noted above in accordance with ASC Topic No.

815 - 40, “ Derivatives

and Hedging - Contracts in Entity’s Own Stock ,” and determined they are not indexed to the Company’s common stock

and that the conversion feature, which is akin to a redemption feature, meet the definition of a liability.

The First Closing Debentures

contain an indeterminate number of shares to settle with conversion options outside of the Company’s control.

Therefore, the Company

bifurcated the conversion feature and accounted for it as a separate derivative liability.

Upon issuance of the First Closing Debentures,

the Company recognized a derivative liability at a fair value of $ 2,477,217 , which is recorded as a debt discount and will be amortized

over the life of the First Closing Debentures.

Upon repayment of the debentures in 2025, the remaining unamortized debt discount was

fully amortized to interest expense.

The Company measured the

derivative liability at fair value based on significant inputs not observable in the market, which causes it to be classified as a Level

3 measurement within the fair value hierarchy.

The valuation of the derivative liability uses assumptions and estimates the Company believes

would be made by a market participant in making the same valuation.

The Company assesses these assumptions and estimates on an on-going

basis as additional data impacting the assumptions and estimates are obtained.

Changes in the fair value of the contingent consideration

liability related to updated assumptions and estimates are recognized within the statements of operations.

The Company valued the derivative

liability using a Black-Scholes method using following assumptions:

OF DERIVATIVE LIABILITY

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Expected dividend yield

following is a summary of the derivative liability:

The following is a summary

of the derivative liability:

OF THE DERIVATIVE LIABILITY LIABILITY

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Change in fair value

Outstanding as of June 30, 2025

Convertible Debt

September 2023, Scienture entered into a Loan and Security Agreement (the “ NVK Loan Agreement ”) with NVK

Finance, LLC, a Nebraska Limited Liability Company (“ NVK ”) for $ 2,000,000 .

The debt accrues interest at a per annum rate equal to the Prime Rate (as defined in the NVK Loan Agreement) plus 7% and the prime

rate is adjusted quarterly.

As of both June 30, 2025 and December 31, 2024, the interest rate was 15.50 %.

The debt is collateralized by all of Scienture’s receivables, cash and cash equivalents and its right, title and interest in,

to and under its Intellectual Property (as defined in the NVK Loan Agreement) and all proceeds thereof.

The principal is entirely

repayable on the maturity date in September

2025 and interest is payable monthly

following a Qualified Financing (as defined in the NVK Loan Agreement).

The NVK debt is convertible into common stock of Scienture

at a fully-diluted Scienture valuation of $ 60,000,000 .

The balance of the NVK debt upon the Scienture Merger, and at June 30, 2025, was $ 2,000,000 .

Interest expense on the NVK debt was $ 77,500 and

for the three and six months ended June 30, 2025, respectively.

August 2024, the Company issued a convertible note of $ 360,000 ,

for which the Company received $ 314,000 in

net proceeds.

On the six-month anniversary of the issuance, the Company was required to make a payment of $ 360,000 to

the noteholder and each month thereafter the Company was required to make a payment of $ 7,200 to

the noteholder towards repayment of the note (each, an “ Amortization Payment ”).

The note bears interest at 12 %

per annum and is deemed earned in full and guaranteed as of the note issuance date.

If the Company fails to pay any

Amortization Payment, the noteholder will have the right to convert the outstanding principal and accrued interest at a conversion

( 2,296,834 )

Outstanding as of September 30, 2025

Scienture Convertible Debt

In September 2023, Scienture

entered into a Loan and Security Agreement (the “ NVK Loan Agreement ”) with NVK Finance, LLC, a Nebraska Limited

Liability Company (“ NVK ”) for $ 2,000,000 .

The debt accrues interest at a per annum rate equal to the Prime Rate (as defined in the NVK Loan Agreement) plus 7% and the prime rate

is adjusted quarterly.

As of both September 30, 2025 and December 31, 2024, the interest rate was 15.50 %.

The debt is collateralized by all of Scienture’s receivables, cash and cash equivalents and its right, title and interest in, to

and under its Intellectual Property (as defined in the NVK Loan Agreement) and all proceeds thereof.

The principal is entirely repayable

on the maturity date in September

2025 and interest is payable monthly following a Qualified Financing (as defined in the NVK Loan Agreement).

The NVK debt is convertible

into common stock of Scienture at a fully-diluted Scienture valuation of $ 60,000,000 .

On October 10, 2025, the

parties executed a Second Amendment extending the loan’s maturity to December 8, 2025, and waiving any existing defaults.

September 30, 2025, the outstanding balance (principal + interest) was $ 2,656,250 .

Early repayment requires payment of this balance plus

$791.67 per day (or $1,069.44 per day during any new default).

As consideration, the Company agreed to pay NVK $ 25,000 plus legal fees,

a $ 25,000 maturity extension fee, and issue 250,000 common shares, which the Company agreed to register.

As of October 15, 2025, the

Company fully repaid the NVK Loan and satisfied all obligations under the amendment (see Note 15).

The balance of the NVK debt

upon the Scienture Merger, and at September 30, 2025, was $ 2,000,000 .

Interest expense on the NVK debt was $ 77,500 and $ 232,500 , for

the three and nine months ended September 30, 2025, respectively.

August 2024 Note

In August 2024, the Company

issued a convertible note of $ 360,000 , for which the Company received $ 314,000 in net proceeds.

On the six-month anniversary of the issuance,

the Company was required to make a payment of $ 360,000 to the noteholder and each month thereafter the Company was required to make a

payment of $ 7,200 to the noteholder towards repayment of the note (each, an “ Amortization Payment ”).

bears interest at 12 % per annum and is deemed earned in full and guaranteed as of the note issuance date.

If the Company fails to pay

any Amortization Payment, the noteholder will have the right to convert the outstanding principal and accrued interest at a conversion

price equal to the Conversion Price (as defined below and subject to a floor price of $ 1.50 ).

The Conversion Price is the lesser of (i) $ 8.36 or

of the lowest volume-weighted average prices of the preceding five

trading days .

The Conversion Price is the lesser of (i)

$ 8.36 or (ii) 85 % of the lowest volume-weighted average prices of the preceding five trading days .

The note matures on August 20, 2025 .

connection with the note, the Company issued 76,923

warrants to purchase common stock to the noteholder.

The warrants have an exercise price of $ 9.36

per share, are immediately exercisable and have a term of 5

The fair value of the warrant was $ 71,332 ,

which was recognized as a debt discount and will be amortized to interest expense over the life of the note.

debt discount recognized in connection with the note was $ 117,332 ,

with $ 42,755

amortized through December 31, 2024, and an additional $ 0 and $ 28,931

amortized during the three and six months ended June 30, 2025.

The net carrying value of the note payable, after deducting the

remaining unamortized discount of $ 45,646 ,

was $ 314,354 .

On March 31, 2025, the Company converted the outstanding note into equity by issuing 274,000

shares of common stock at a fair value of $ 411,000 .

As a result, it recognized a $ 96,646

loss on conversion, reported as a non-operating expense in the unaudited condensed consolidated statements of operations.

following is a summary of the Company’s debt as of June 30, 2025 and December 31, 2024:

As of June 30, 2025

debt discount

of unamortized

In connection with the note,

the Company issued 76,923 warrants to purchase common stock to the noteholder.

The warrants have an exercise price of $ 9.36 per share,

are immediately exercisable and have a term of 5 years.

The fair value of the warrant was $ 71,332 , which was recognized as a debt discount

and will be amortized to interest expense over the life of the note.

Total debt discount recognized

in connection with the note was $ 117,332 , with $ 42,755 amortized through December 31, 2024, and an additional $ 0 and $ 28,931 amortized

during the three and nine months ended September 30, 2025.

The net carrying value of the note payable, after deducting the remaining

unamortized discount of $ 45,646 , was $ 357,554 , including $ 43,200 of accrued interest.

On March 31, 2025, the Company converted the outstanding

note into equity by issuing 274,000 shares of common stock at a fair value of $ 411,000 .

As a result, it recognized a $ 53,446 loss on

conversion, reported as a non-operating expense in the unaudited condensed consolidated statements of operations.

The following is a summary

of the Company’s debt as of September 30, 2025 and December 31, 2024:

As of September

Principal outstanding

Unamortized debt

Debt, net of unamortized

debt discount

Convertible debenture - Arena

$ ( 1,755,349 )

Scienture convertible debt

( 1,755,349 )

Current maturity of debt

Total long-term debt

$ ( 1,755,349 )

As of December

debt discount

of unamortized

Principal outstanding

Unamortized debt

Debt, net of unamortized

debt discount

7 unchanged sentences

$ ( 2,721,058 )

9 – STOCKHOLDERS’ EQUITY

of Series X Preferred Stock

July 25, 2024, the Company revoked the authorization to issue shares of the Company’s Series A Preferred Stock, par value

$ 0.00001 per

share (the “ Series A Preferred Stock ”) and concurrently authorized the issuance of up to 9,211,246 shares of the Series X Preferred Stock, a then new class of preferred

of the Series X Preferred Stock are entitled to receive dividends on shares of the Series X Preferred Stock on an as-if-converted-to-Common-Stock

basis, without regard to any beneficial ownership limitation described in a letter of transmittal, equal to and in the same form and

manner as dividends are paid to holders of the shares of Common Stock.

Subject to any requirements of the General Corporation Law of

the State of Delaware, the Series X Preferred Stock has no voting rights.

The Series X Preferred Stock ranks on parity with shares of

Common Stock as to distributions of assets upon liquidation, dissolution, or winding up of the Company.

As consideration for the Scienture Merger, the shares of Scienture

common stock issued and outstanding immediately prior to the “Effective Time” of the mergers were converted into the right

to receive, in the aggregate, (i) 291,536 shares of the Company’s

common stock and (ii) 6,826,753 shares of the Company’s Series X Preferred Stock, each share of which was convertible into one share

of common stock.

September 20, 2024, all previously issued shares of Series X Preferred Stock were converted into a total of 6,826,753 shares of common

As such, there were no issued and outstanding shares of Series X Preferred Stock as of June 30, 2025.

the three months ended June 30, 2025, the Company issued 3,002,086 shares of common stock for services.

The fair value of shares issued

for services was $ 2,701,253 and was included in general and administrative expenses in the unaudited condensed consolidated statements

of operations.

the three months ended March 31, 2025, the Company issued 240,000 shares of common stock for services.

The fair value of shares issued

for services was $ 1,080,000 and was included in general and administrative expenses in the unaudited condensed consolidated statements

of operations.

the three months ended March 31, 2025, the Company issued 274,000 shares of common stock at a fair value of $ 411,000 pursuant to the

conversion of the August 2024 convertible note of $ 314,354 .

NOTE 9 – STOCKHOLDERS’ EQUITY

of Series B Preferred Stock

June 26, 2023, the Company filed a Certificate of Designation, Preferences, Rights and Limitations of the Series B Preferred Stock (the

“ Series B Preferred Stock ”) with the Secretary of the State of Delaware that designated 787,754 shares

of the Company’s authorized and unissued preferred stock as convertible Series B Preferred Stock at a par value of $ 0.00001 per

of the Series B Preferred Stock are not entitled to receive dividends and do not have redemption or voting rights.

Furthermore, the Series

B Preferred Stock does not have a liquidation preference.

Shares of Series B Preferred Stock are automatically convertible into shares

of the Company’s common stock at a ratio of 100 shares of common stock for each share of Series B Preferred Stock upon stockholder

approval of such conversion.

of September 30, 2025, there were 15,759 issued and outstanding shares of Series B Preferred Stock.

Designation of Series X Preferred Stock

On July 25, 2024, the Company

revoked the authorization to issue shares of the Company’s Series A Preferred Stock, par value $ 0.00001 per share (the “ Series

A Preferred Stock ”) and concurrently authorized the issuance of up to 9,211,246 shares of the Series X Preferred Stock,

a then new class of preferred stock.

Holders of the Series X Preferred

Stock are entitled to receive dividends on shares of the Series X Preferred Stock on an as-if-converted-to-Common-Stock basis, without

regard to any beneficial ownership limitation described in a letter of transmittal, equal to and in the same form and manner as dividends

are paid to holders of the shares of Common Stock.

Subject to any requirements of the General Corporation Law of the State of Delaware,

the Series X Preferred Stock has no voting rights.

The Series X Preferred Stock ranks on parity with shares of Common Stock as to distributions

of assets upon liquidation, dissolution, or winding up of the Company.

As consideration for the

Scienture Merger, the shares of Scienture common stock issued and outstanding immediately prior to the “Effective Time” of

the mergers were converted into the right to receive, in the aggregate, (i) 291,536 shares of the Company’s common stock and (ii)

6,826,753 shares of the Company’s Series X Preferred Stock, each share of which was convertible into one share of common stock.

In September 20, 2024,

all previously issued shares of Series X Preferred Stock were converted into a total of 6,826,753

shares of common stock.

As such, there were no issued and outstanding shares of Series X Preferred Stock as of September 30,

the nine months ended September 30, 2025, the Company issued an aggregate of 7,103,614 shares of common stock for net proceeds of $ 9,008,199 .

During the three months ended

September 30, 2025, the Company issued 418,064 shares of common stock for services.

The fair value of shares issued for services was

$ 442,238 and was included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

During the three months

ended September 30, 2025, a warrant holder exercised 279,402

warrants for 279,402 shares of commons stock on a cashless basis (see Note 10).

Effective as of

September 17, 2025, an aggregate of 2,000,000 shares

of common stock were issued to employees and consultants pursuant to the cancellation of stock options issued to such holders.

Company revaluated the cancelled options using the Black-Scholes options model immediately prior to modification and compared to the

fair value of the shares issued at $ 0.86

per share and the remaining expense to be recognized under the original option grant.

Accordingly, the incremental difference of

was recognized as stock-based compensation expense in accordance with ASC 718-20-35 during the nine months ended September 30,

During the three months ended

June 30, 2025, the Company issued 3,002,086 shares of common stock for services.

The fair value of shares issued for services was $ 2,701,253

and was included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

During the three months ended

March 31, 2025, the Company issued 240,000 shares of common stock for services.

The fair value of shares issued for services was $ 1,080,000

and was included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

During the three months ended

March 31, 2025, the Company issued 274,000 shares of common stock at a fair value of $ 411,000 pursuant to the conversion of the August

2024 convertible note of $ 357,554 .

Accordingly, the Company recognized a $ 53,446 loss on conversion.

Note Commitment Shares

Arena Note Commitment

As additional consideration

for the Arena Investors execution and delivery of the Securities Purchase Agreement with the Arena Investors, the Company issued the Arena

Investors the SPA Commitment Fee Shares as described in Note 8 above.

for the Arena Investors execution and delivery of the Arena SPA with the Arena Investors, the Company issued the

Arena Investors the SPA Commitment Fee Shares as described in Note 8 above.

In connection with any Closing

following the First Closing, the Company agreed to issue to the Arena Investors participating in such Closing or their designee(s) a certain

number of “Commitment Shares.” The aggregate number of Commitment Shares owing to each of the Arena Investors, or their designee(s),

in connection with any Closing following the First Closing will be agreed among the Company and the Arena Investors participating in such

For the avoidance of doubt, all of the Commitment Shares issued in connection with the First Closing on the First Closing Date

were earned as of the First Closing Date regardless of whether a subsequent Closing occurs (see Note 8).

The Company issued to each Arena Investor participating in the First Closing its pro rata portion of 55,000 shares of

the Company’s common stock.

The fair value of shares issued was $ 420,200 was recognized as a debt discount, which was amortized

to interest expense in full as commitment shares in connection with first closing was fully earned as of first closing date.

Line of Credit

November 25, 2024, the Company entered into a purchase agreement (“ ELOC Agreement ”) with Arena Business Solutions

Global SPC II, Ltd (the “ Investor ”).

Under the ELOC Agreement, the Company had the right, but not the obligation,

to direct the Investor to purchase up to $ 50,000,000

in shares of the Company’s common stock (the “ ELOC Shares ”) upon satisfaction of certain terms and conditions

contained in the ELOC Agreement.

The term of the ELOC Agreement began on the date of execution and would end on the earlier of (i) the

first day of the month following the 36-month anniversary of the execution date, (ii) the date on which the Investor had purchased the

maximum amount of ELOC Shares, or (iii) the effective date of any written notice of termination delivered pursuant to the terms of the

ELOC Agreement (the “ Commitment Period ”).

The Company terminated the ELOC Agreement effective as of May 22,

consideration for the Investor’s execution and delivery of the ELOC Agreement, the Company agreed to issue to the Investor, as

a commitment fee:

(i) 70,000 shares

of the Company’s Common Stock (the “ Initial Commitment Fee Shares ”) and (ii) in two separate

tranches, a number of additional shares of common stock (the “ Additional Commitment Fee Shares ” and,

together with the Initial Commitment Fee Shares, the “ Commitment Fee Shares ”) equal to (a) with respect to

the first tranche, 500,000 divided

by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding the effectiveness

of the initial registration statement on which the resale of the Commitment Fee Shares are registered (the

“ Effectiveness Date ”) and (b) with respect to the second tranche, 500,000 divided

by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding the two (2) month

anniversary of the Effectiveness Date.

The Additional Commitment Fee Shares were subject to a true-up after each issuance pursuant

to the terms of the ELOC Agreement.

The Company issued the Initial Commitment Fee

Shares on November 25, 2024.

The fair value of the shares issued was $ 534,800

and was included in deferred offering costs in the consolidated balance sheets.

In March 2025, the deferred offering costs

previously capitalized were offset against the gross proceeds from the ELOC share issuances (see below).

2025, the Company issued to the Investor, 450,437 Additional Commitment Fee Shares.

The fair value of shares issued was $ 971,732

and was recognized as offering costs in connection with the related ELOC Agreement share issuances.

Accordingly, the fair value of

the shares issued were offset against the gross proceeds and there was no net effect to stockholders’ equity.

March 2025, the Company issued in aggregate 2,800,000 shares of common stock pursuant to the ELOC Agreement for aggregate gross

proceeds of $ 4,597,999 .

After recognition of the related offering costs, the Company recognized a net increase to additional paid-in

capital of $ 2,691,467 .

April and May 2025, the Company issued to the Investor, 614,075 shares of common stock as the final Additional Commitment Fee Shares

owed to the Investor.

following the First Closing, the Company agreed to issue to the Arena Investors participating in such Closing or their designee(s) a

certain number of “Commitment Shares.” The aggregate number of Commitment Shares owing to each of the Arena Investors, or

their designee(s), in connection with any Closing following the First Closing will be agreed among the Company and the Arena Investors

participating in such Closing.

For the avoidance of doubt, all of the Commitment Shares issued in connection with the First Closing on

the First Closing Date were earned as of the First Closing Date regardless of whether a subsequent Closing occurs (see Note 8).

The Company issued to each

Arena Investor participating in the First Closing its pro rata portion of 55,000 shares of the Company’s common stock.

value of shares issued was $ 420,200 was recognized as a debt discount, which was amortized to interest expense in full as commitment

shares in connection with first closing was fully earned as of first closing date.

Equity Line of Credit

On November 25, 2024, the

Company entered into a purchase agreement (“ ELOC Agreement ”) with Arena Business Solutions Global SPC II, Ltd

(the “ Investor ”).

Under the ELOC Agreement, the Company had the right, but not the obligation, to direct the

Investor to purchase up to $ 50,000,000 in shares of the Company’s common stock (the “ ELOC Shares ”) upon

satisfaction of certain terms and conditions contained in the ELOC Agreement.

The term of the ELOC Agreement began on the date of execution

and would end on the earlier of (i) the first day of the month following the 36-month anniversary of the execution date, (ii) the date

on which the Investor had purchased the maximum amount of ELOC Shares, or (iii) the effective date of any written notice of termination

delivered pursuant to the terms of the ELOC Agreement (the “ Commitment Period ”).

The Company terminated the

ELOC Agreement effective as of May 22, 2025.

In consideration for the

Investor’s execution and delivery of the ELOC Agreement, the Company agreed to issue to the Investor, as a commitment fee:

70,000 shares of the Company’s Common Stock (the “ Initial Commitment Fee Shares ”) and (ii) in two separate

tranches, a number of additional shares of common stock (the “ Additional Commitment Fee Shares ” and, together

with the Initial Commitment Fee Shares, the “ Commitment Fee Shares ”) equal to (a) with respect to the first

tranche, 500,000 divided by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding

the effectiveness of the initial registration statement on which the resale of the Commitment Fee Shares are registered (the “ Effectiveness

Date ”) and (b) with respect to the second tranche, 500,000 divided by the simple average of the daily VWAP of our common

stock during the five (5) trading days immediately preceding the two (2) month anniversary of the Effectiveness Date.

The Additional

Commitment Fee Shares were subject to a true-up after each issuance pursuant to the terms of the ELOC Agreement.

The Company issued the Initial

Commitment Fee Shares on November 25, 2024.

The fair value of the shares issued was $ 534,800 and was included in deferred offering costs

in the consolidated balance sheets.

In March 2025, the deferred offering costs previously capitalized were offset against the gross proceeds

from the ELOC share issuances (see below).

In 2025, the Company issued

to the Investor 450,437 Additional Commitment Fee Shares.

The fair value of shares issued was $ 971,732 and was recognized as offering

costs in connection with the related ELOC Agreement share issuances.

Accordingly, the fair value of the shares issued were offset against

the gross proceeds and there was no net effect to stockholders’ equity.

In March 2025, the Company issued an aggregate of 2,800,000 shares of its common stock pursuant to the terms of the ELOC Agreement.

The issuance generated total gross proceeds,

which after deducting applicable offering costs, resulted in net proceeds of $ 4,333,609 .

In April and May 2025,

the Company issued to the Investor, 614,075

shares of common stock as the final Additional Commitment Fee Shares owed to the Investor.

The fair value of shares issued was

and was recognized as deferred offering costs in connection

with the related ELOC Agreement share issuances.

Compensation Awards

independent member of the Company’s board of directors (the “ Board ”) is to receive an annual grant of

restricted common stock of the Company equal to $ 55,000

in value on April 1st of each year (or such date thereafter

as the awards are approved by the Board), and valued on such same date, based on the closing sales price on such date (or the first business

day thereafter), which restricted stock awards will vest at the rate of 1/4th of such awards over the following four calendar quarters,

subject to such directors continued service to the Company.

Board and the Company’s stockholders approved an amendment to the Second Amended and Restated 2019 Equity Incentive Plan (the

“ Plan ”), which increased

the available shares under the Plan to 5,000,000

shares of the common stock.

10 – WARRANTS

connection with a note (see Note 8), in August 2024 the Company issued 76,923 warrants to purchase common stock.

The warrants have an

exercise price of $ 9.36 per share, are immediately exercisable and have a term of 5 years.

In August 2024, the holder exercised 28,571

warrants for shares of commons stock on a cashless basis.

of June 30, 2025, the Company remeasured the fair value of warrants outstanding at $ 197,827 .

In connection with remeasurement of warrants,

a $ 76,122 and $ 722,108 gain was recognized during the three and six months ended June 30, 2025, respectively, as the change in fair value

$ 554,586 and was

recognized as deferred offering costs in connection with the related ELOC Agreement share issuances.

As mentioned above, the Company

terminated the ELOC Agreement effective as of May 22, 2025.

Private Placements

In July 2025, the

Company’s board of directors approved a capital raise in an aggregate amount of up to $ 3,000,000

pursuant to a form of Common Stock Purchase Agreement (the “ Purchase Agreement ”).

During July 2025, the

Company sold an aggregate of 1,078,614

shares of common stock for aggregate proceeds of $ 1,679,993 ,

pursuant to Purchase Agreements with eight accredited investors.

Registered Direct Offering

On August 15, 2025, the

Company issued an aggregate of 3,225,000

shares of common stock for aggregate proceeds of $ 3,549,184 ,

pursuant to a Securities Purchase Agreement (the “ Purchase Agreement ”) with several institutional

accredited investors as part of a registered direct offering made pursuant to a shelf registration statement on Form S-3 (File No.

333- 289198), which was originally filed by the Company with the Securities and Exchange Commission (the

“ Commission ”) on August 1, 2025, and declared effective on August 8, 2025.

September 19, 2025, the Company entered into an Equity Distribution Agreement (the “ ATM Agreement ”) with

Maxim Group LLC (“ Maxim ”).

Pursuant to the ATM Agreement, Maxim will act as the Company’s sole sales

agent with respect to the offer and sale from time-to-time of shares of the Company’s common stock, par value $ 0.00001 per

share, having an aggregate gross sales price of up to $ 18,792,009

through one or more “at-the-market” offerings (the “ ATM Program ”).

Any Shares sold in

connection with the ATM Program will be issued pursuant to a shelf registration statement on Form S-3 (File No.

333-289198) (the

“ Shelf Registration Statement ”) filed with the Securities and Exchange Commission (the

“ SEC ”) on August 1, 2025, and declared effective by the SEC on August 8, 2025, the prospectus contained in

the Registration Statement, and a prospectus supplement dated September 19, 2025, and a prospectus supplement dated October 24, 2025.

Company has agreed to pay Maxim a commission of 3.0 %

of the gross sales price of any Shares sold in the offering.

The Company will also reimburse Maxim for certain specified

expenses in connection with its services under the Agreement.

As of September 30, 2025, the Company had issued and sold 100 shares of common stock in connection with the ATM Program.

Equity Compensation Awards

Each independent member of

the Company’s board of directors (the “ Board ”) is to receive an annual grant of restricted common stock

of the Company equal to $ 55,000 in value on April 1st of each year (or such date thereafter as the awards are approved by the Board),

and valued on such same date, based on the closing sales price on such date (or the first business day thereafter), which restricted

stock awards will vest at the rate of 1/4th of such awards over the following four calendar quarters, subject to such directors continued

service to the Company.

The Board and the Company’s

stockholders approved an amendment to the Second Amended and Restated 2019 Equity Incentive Plan (the “ Plan ”),

which increased the available shares under the Plan to 5,000,000 shares of the common stock.

NOTE 10 – WARRANTS

In connection with a note

(see Note 8), in August 2024 the Company issued 76,923 warrants to purchase common stock.

The warrants have an exercise price of $ 9.36

per share, are immediately exercisable and have a term of 5 years.

In August 2024, the holder exercised 28,571 warrants for shares of

common stock on a cashless basis.

Pursuant to the adjustment provisions in Section 3(b) of the warrant agreement, the exercise price

automatically adjusted following the Company’s issuance of shares at a dilutive price of $1.20 on or about August 14, 2025, resulting

in an automatic increase in the aggregate warrant share amount.

Accordingly, in August 2025, the holder exercised aggregate of 279,402

warrants for shares of common stock on a cashless basis, including 12,706 warrants issued on October 4, 2023.

As of September 30, 2025,

the Company remeasured the fair value of warrants outstanding at $ 138,624 .

In connection with the remeasurement of warrants, a $ 59,203

and $ 781,311 gain was recognized during the three and nine months ended September 30, 2025, respectively, as the change in fair value

of warrant liability.

Company’s outstanding and exercisable warrants, as of June 30, 2025, are presented below:

The Company’s outstanding

and exercisable warrants, as of September 30, 2025, are presented below:

OF OUTSTANDING AND EXERCISABLE WARRANTS

Number Outstanding

Weighted Average Exercise Price

Weighted Average

Exercise Price

Contractual Life

5 unchanged sentences

Warrants exercised

Warrants outstanding as of June 30, 2025

Warrants exercisable as of June 30, 2025

Plan allows for and the Company maintains stock option award agreements under which certain employees may be awarded option grants based

on a combination of performance and tenure.

Warrants outstanding as of September 30, 2025

Warrants exercisable as of September 30, 2025

NOTE 11 – OPTIONS

The Plan allows for and the

Company maintains stock option award agreements under which certain employees may be awarded option grants based on a combination of

performance and tenure.

The number of shares available to grant to employees under the Plan is 5,000,000 .

Board and stockholders approved an amendment to the Plan increasing the available shares under the Plan

to 5,000,000 shares of the Common Stock as such common stock existed on July 24, 2024.

compensation cost related to stock options granted was $ 162,438 and $ 444 for the three months ended June 30, 2025, and 2024, respectively.

compensation cost related to stock options granted was $ 162,874 and $ 24,710 for the six months ended June 30, 2025, and 2024, respectively.

following table represents stock option activity for the six-month period ended June 30, 2025:

The Board and stockholders

approved an amendment to the Plan increasing the available shares under the Plan to 5,000,000 shares of the Common Stock as such common

stock existed on July 24, 2024.

Total compensation cost related

to stock options granted was $ 144,565 and $ 437 for the three months ended September 30, 2025, and 2024, respectively.

Total compensation cost related

to stock options granted was $ 307,439 and $ 25,147 for the nine months ended September 30, 2025, and 2024, respectively.

On September 17, 2025, the

Company cancelled 2,000,000 stock options and granted the related option holders 2,000,000 shares of common stock.

This modification

resulted in the Company recognizing the remaining expense under the original option and an additional incremental consideration as a

result of the modification.

Total stock-based compensation cost as a result of this transaction was $ 1,512,995 .

The following table represents

stock option activity for the nine-month period ended September 30, 2025:

OF STOCK OPTION ACTIVITY

Number Outstanding

Weighted-Average Exercise Price

Weighted-Average Contractual Life in Years

Weighted-Average

Exercise Price

Weighted-Average

Contractual Life in Years

Intrinsic Value

2 unchanged sentences

Options granted

Options adjusted

Options expired

Options cancelled

( 2,000,000 )

Forfeited/expired

Options exercised

Options outstanding as of June 30, 2025

Options exercisable as of June 30, 2025

12 – COMMITMENTS AND CONTINGENCIES

In July 2023, the Company entered into, and closed on the transactions

contemplated by, an Amended and Restated Agreement and Plan of Merger with Superlatus, whereby the Company acquired Superlatus (the “ Superlatus

Acquisition ”).

In connection with the Superlatus Acquisition, former shareholders of Superlatus received 306,855 shares of the Company’s Series B Preferred Stock, par value $ 0.00001 per share (the “ Series B Preferred

The Series B Preferred Stock are convertible into shares of the Company’s common stock at a conversion ratio

Options outstanding as of September 30, 2025

Options exercisable as of September 30, 2025

NOTE 12 – COMMITMENTS AND CONTINGENCIES

As previously disclosed

in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2025, and the Quarterly Report on Form 10-Q filed

with the SEC on August 12, 2025, the Company entered into, and closed on the transactions contemplated by, an Amended and Restated

Agreement and Plan of Merger with Superlatus, whereby the Company acquired Superlatus (the “ Superlatus

Acquisition ”) in July 2023.

In connection with the Superlatus Acquisition, former shareholders of Superlatus received 306,855

shares of the Company’s Series B Preferred Stock, par value $ 0.00001

per share (the “ Series B Preferred Stock ”).

The Series B Preferred Stock are convertible into shares of

the Company’s common

stock at a conversion ratio of 100-1 .

In January 2024, shareholders

holding shares of Series B Preferred Stock surrendered shares of the Series B Preferred Stock back to the Company as a result of Superlatus

failing to meet certain post-closing conditions associated with the Superlatus Acquisition, such that only 15,759 shares of Series B Preferred

Stock remained outstanding.

failing to meet certain post-closing conditions associated with the Superlatus Acquisition, such that only 15,759 shares of Series B

Preferred Stock remained outstanding.

On March 5, 2024, the Company

2 unchanged sentences

pursuant to the Superlatus SPA.

As a result of

the transaction, Superlatus Inc.

of the transaction, Superlatus Inc.

ceased to be a subsidiary of the Company, and the rights and assets of Superlatus together with various

1 unchanged sentence

became rights and obligations of the Buyer.

The shares of Series B Preferred

Stock issued in connection with the Superlatus Acquisition remain outstanding.

The shares of Series B

Preferred Stock issued in connection with the Superlatus Acquisition remain outstanding.

In January 2025, Eat Well

Investment Group, Inc., a Canadian company (“ Eat Well ”) holding 11,643.84

shares of the Series B Preferred Stock, filed a complaint against the Company in the United States District Court

for the Middle District of Florida alleging, among other things, that the Company is responsible for paying certain consideration to

Eat Well in connection with Superlatus’ acquisition of Eat Well in June 2023 prior to the Company’s acquisition of

Ultimately, Eat Well is seeking $ 8.5

million to be delivered in the form Company common stock, $ 1.15

million in unpaid principal and accrued interest under a legacy note made by Superlatus in favor of Eat Well, $ 350,000

in cash consideration owed by Superlatus to Eat Well, $ 755,000

in unpaid principal and accrued interest on ten promissory notes made by Sapientia, Inc., a subsidiary of Superlatus, in favor of

Eat Well, and certain other damages.

There can be no assurance that an amicable resolution will be obtained.

The Company intends to

vigorously defend itself in the litigation.

Investment Group, Inc., a Canadian company (“ Eat Well ”) holding 11,643.84 shares of the Series B Preferred

Stock, filed a complaint against the Company in the United States District Court for the Middle District of Florida alleging, among other

things, that the Company is responsible for paying certain consideration to Eat Well in connection with Superlatus’ acquisition

of Eat Well in June 2023 prior to the Company’s acquisition of Superlatus.

Ultimately, Eat Well is seeking $ 8.5 million to be delivered

in the form Company common stock, $ 1.15 million in unpaid principal and accrued interest under a legacy note made by Superlatus in favor

of Eat Well, $ 350,000 in cash consideration owed by Superlatus to Eat Well, $ 755,000 in unpaid principal and accrued interest on ten

promissory notes made by Sapientia, Inc., a subsidiary of Superlatus, in favor of Eat Well, and certain other damages.

There can be no

assurance that an amicable resolution will be obtained.

The Company intends to vigorously defend itself in the litigation.

Kesin Pharma Corporation

Scienture entered into an

exclusive license and commercial agreement (the “ Kesin Agreement ”) with Kesin Pharma Corporation (“ Kesin ”)

whereby Scienture granted the exclusive license rights to commercialize SCN-102 in 2022 and SCN-104 in 2023 to Kesin for use in the United

States of America.

March 2024, the parties terminated the Kesin Agreement, and the parties agreed that Scienture would pay Kesin a total gross amount

of $ 1,285,000 upon

commercialization of product via a royalty arrangement.

The royalty agreement requires that if the

full $1,285,900 has not been repaid within two years of the earlier of (i) commercial launch or (ii) 120 days from FDA approval,

then interest will accrue prospectively at a rate of 8% annually on the unpaid balance.

Accordingly, Scienture recorded a $1,285,000

termination fee liability.

As of June 30,

2025, the entire amount is outstanding.

August 2024, Kesin demanded immediate payment of the full amount under the Kesin Termination Agreement, alleging the full amount is payable

in connection with the consummation Scienture’s business combination with the Company.

Scienture disputed that the

amount is payable, and the parties entered into discussions to resolve the issue.

March 11, 2025, Kesin filed a complaint against Scienture in the United States District Court for the Eastern District of New York

seeking payment of the disputed $ 1.285 million.

There can be no assurance that an amicable resolution will be obtained.

intends to vigorously defend itself in the litigation.

As previously disclosed

in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2025, and the Quarterly Reports on Form 10-Q filed

with the SEC on May 12, 2025, and August 12, 2025, Scienture entered into an exclusive license and commercial agreement (the

“ Kesin Agreement ”) with Kesin Pharma Corporation (“ Kesin ”) whereby Scienture

granted the exclusive license rights to commercialize SCN-102 in 2022 and SCN-104 in 2023 to Kesin for use in the United States of

In March 2024, the parties

terminated the Kesin Agreement, and the parties agreed that Scienture would pay Kesin a total gross amount of $ 1,285,000 upon commercialization

of product via a royalty arrangement.

The royalty agreement requires that if the full $1,285,900 has not been repaid within two years

of the earlier of (i) commercial launch or (ii) 120 days from FDA approval, then interest will accrue prospectively at a rate of 8% annually

on the unpaid balance.

Accordingly, Scienture recorded a $1,285,000 termination fee liability.

As of September 30, 2025, the entire amount

is outstanding.

In August 2024, Kesin demanded

immediate payment of the full amount under the Kesin Termination Agreement, alleging the full amount is payable in connection with the

consummation Scienture’s business combination with the Company.

Scienture disputed that the amount is payable, and the parties

entered into discussions to resolve the issue.

On March 11, 2025, Kesin

filed a complaint against Scienture in the United States District Court for the Eastern District of New York seeking payment of the

disputed $ 1.285

The case was voluntarily dismissed on October 1, 2025.

The Company and Kesin entered into a Settlement Agreement and

Release on October 27, 2025, whereby Kesin agreed to unconditionally release and discharge the Company from all actions related to

the complaint in exchange for the Company paying $ 1.285 million plus 8% interest from March 13, 2025, and legal fees and costs related to the complaint according to a payment

schedule through December 2026 (see Note 15).

Company entered into a lease agreement for the period of October 2018 to November 2023.

6 unchanged sentences

No incentives were included in the lease.

On April 30, 2025, the

Company completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo.

In connection with the transaction,

the Company derecognized subsidiary’s operating lease right-of-use assets of $ 142,138

and operating lease liability of $ 158,687

(see Note 1).

As such, the Company recognized a gain of $ 16,548

on disposition of related IPS lease.

April 30, 2025, the Company completed the sale of its subsidiaries, IPS, Softell and Bonum Health, Inc., to Tollo.

In connection with

the transaction, the Company derecognized subsidiary’s operating lease right-of-use assets of $ 142,138 and operating lease liability

of $ 158,687 (see Note 1).

As such, the Company recognized a gain of $ 16,548 on disposition of related IPS lease.

July 25, 2024, the Company entered into and closed the Scienture Merger.

Pursuant to the Scienture Merger Agreement, the Company

acquired right of use asset value of $ 61,578 and right of use liability of $ 61,886 on the acquisition date together with all the assets

and liabilities of Scienture.

Pursuant to the Scienture Merger Agreement, the Company acquired

right of use asset value of $ 61,578 and right of use liability of $ 61,886 on the acquisition date together with all the assets and liabilities

of Scienture.

table below reconciles the fixed component of the undiscounted cash flows for and the total remaining years to the lease liabilities

recorded in the consolidated balance sheet as of June 30, 2025.

recorded in the consolidated balance sheet as of September 30, 2025.

balance sheet information related to leases are as follows:

OF BALANCE SHEET INFORMATION RELATED TO LEASES

September 30,

Weighted-average remaining lease term (in years)

8 unchanged sentences

Long-term lease obligations

the three months ended June 30, 2025, and 2024, total operating lease expense was $ 22,795 and $ 12,841 , respectively, which is included

the three months ended September 30, 2025, and 2024, total operating lease expense was $ 8,906 and $ 28,034 , respectively, which is included

in general and administrative expenses in the unaudited condensed consolidated statements of operations.

the six months ended June 30, 2025, and 2024, total operating lease expense was $ 59,197 and $ 25,681 , respectively, which is included

the nine months ended September 30, 2025, and 2024, total operating lease expense was $ 68,103 and $ 53,715 , respectively, which is included

in general and administrative expenses in the unaudited condensed consolidated statements of operations.

14 – SEGMENT REPORTING

used to identify the Company’s reportable segments include the organizational structure of the Company and the financial

information available for evaluation by the chief operating decision-maker (the “ CODM ”) in making

decisions about how to allocate resources and assess performance.

The Company’s operating segments have been broken out based

on similar economic and other qualitative criteria.

The Company operates all reporting segments in one geographical area (the United

Company’s chief operating decision-makers are its co-Chief Executive Officers, who make resource allocation decisions and

assess performance based on financial information presented on an aggregate basis.

There are no segment managers who are held

accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding

Accordingly, as of June 30, 2025, the Company has a single reportable segment and operating segment

The key measures of segment profit

or loss reviewed by our CODM are operating costs.

These metrics are reviewed and monitored by the CODM to manage and forecast cash.

CODM also reviews operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements

used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information

available for evaluation by the chief operating decision-maker (the “ CODM ”) in making decisions about how to

allocate resources and assess performance.

The Company’s operating segments have been broken out based on similar economic and

other qualitative criteria.

The Company operates all reporting segments in one geographical area (the United States).

Company’s chief operating decision-makers are its co-Chief Executive Officers, who make resource allocation decisions and assess

performance based on financial information presented on an aggregate basis.

There are no segment managers who are held accountable by

the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations.

as of September 30, 2025, the Company has a single reportable segment and operating segment structure.

key measures of segment profit or loss reviewed by our CODM are operating costs.

These metrics are reviewed and monitored by the CODM

to manage and forecast cash.

The CODM also reviews operating costs to manage, maintain and enforce all contractual agreements to ensure

costs are aligned with all agreements and budget.

15 – SUBSEQUENT EVENTS

In July 2025 Board approved

a capital raise by the Company in an aggregate amount of up to $ 3,000,000

pursuant to a form of Common Stock Purchase Agreement (the

“ Purchase Agreement ”).

The Purchase Agreement provides that the Company would issue and sell, and investors

would purchase, shares of the Company’s common stock, for a price per share of $ 1.59 .

Between July 18, 2025 and August 6, 2025, we entered into Purchase

Agreements with various investors, pursuant to which such investors purchased, and the Company sold, an aggregate of 754,716

shares of the Company’s common stock.

As of August 6, 2025, we have received approximately $ 1.3

million in aggregate proceeds, though the Company may continue to raise additional proceeds of up to the $ 3

million approved by the Board.

Equity Compensation Awards

On October 1, 2025, the Company

issued an aggregate of 1,200,898 shares of common stock to its officers and directors under the Plan as compensation.

Convertible Debenture – Arena

On October 3, 2025, the Company

entered into a letter agreement (the “ Arena Agreement ”) with the Arena Investors whereby the Company and the

Arena Investors agreed to amend Section 4(b) of the First Closing Debentures.

Specifically, the Company and the Arena Investors agreed

to revise the conversion price of the First Closing Debentures to $2.4861 per share.

In addition, each of the Arena Investors agreed to

convert the remaining amounts owed by the Company under the First Closing Debentures into shares of the Company’s common stock in

accordance with the revised terms of the Debentures (the “ Full Conversion ”).

All conditions to the Full Conversion

were subsequently met and, therefore, all Obligations (as defined in the Security Agreement dated November 25, 2024, by and among the

Company and the Arena Investors) under the Transaction Documents (as defined in the Arena SPA) have been deemed paid and automatically

and irrevocably released, satisfied and discharged in full (except those obligations of the Company under Section 5.10 of the Arena SPA

and Section 7 of the Registration Rights Agreement dated November 25, 2024, by and among the Company and the Arena Investors).

the First Closing Debentures, all other Transaction Documents, and all security interests, pledges and other liens of every type at any

time granted to or held by the Arena Investors were terminated and automatically and irrevocably released without further action by the

Arena Investors.

As a result, neither of the Arena Investors will have any obligation to make any credit extensions or financial accommodations

to the Company or any other obligations, duties, or responsibilities in connection therewith.

The Company issued an aggregate of 224,998

shares to the Arena Investors in connection with the Full Conversion and no longer has any outstanding payment or other obligations under the First Closing Debentures.

Convertible Debt

October 10, 2025, the Company and Scienture, LLC entered into a Second Amendment of Loan and Security Agreement (the

“ Second Amendment ”) to the NVK Loan.

Pursuant to the Second Amendment, the parties agreed to extend the maturity

date of the loan until December 8, 2025 (the “ New Maturity Date ”) and NVK agreed to waive any existing

Events of Default (as defined in the NVK Loan).

The parties acknowledged that as of September 30, 2025, the total outstanding

balance of the NVK Loan, inclusive of principal and interest, was $ 2,656,250

(the “ Outstanding Balance ”).

In the event Scienture, LLC elects to satisfy the NVK Loan prior to the New

Maturity Date, it will owe the Outstanding Balance plus an additional $791.67 per day (or $1,069.44 per day if there is an Event of

Default between September 30, 2025, and the applicable pay-off date).

consideration for NVK executing the Second Amendment, the Company agreed to (i) pay NVK a fee in the amount of $ 25,000 plus any associated

(ii) pay NVK a maturity extension fee of $ 25,000 on the New Maturity Date;

and (ii) issue 250,000 shares of the Company’s

common stock, par value $ 0.00001 per share, to NVK.

The Company also agreed to register the resale of the shares of common stock issued

As of October 15, 2025, the Company has fully repaid all amounts due under the NVK Loan and satisfied all obligations under the

Second Amendment.

Streeterville

October 14, 2025, the Company entered into and closed on a note purchase agreement (the “ Purchase Agreement ”)

with Streeterville Capital, LLC, (the “ Lender ”), which provided for the issuance of a senior secured promissory

note in the principal amount of $ 3,911,111.11

(the “ Streeterville Note ”).

The Streeterville

Note carries an original issue discount of $ 391,111.11

and an interest rate of 9 % per annum, computed on the basis of a 360-day year comprise of twelve (12) thirty (30) day months, compounded

The Company agreed to pay $ 20,000

to the Lender to cover the Lender’s transaction costs,

resulting in the Company receiving net proceeds of $ 3,500,000 .

Upon receipt of the net proceeds, the Company repaid in full the remaining outstanding balance of the NVK Loan.

The Company intends to

utilize the remaining net proceeds from closing of the Purchase Agreement for working capital, debt repayment, capital expenditures,

product development, and other general corporate purposes.

Streeterville Note was to mature on the seven month anniversary of closing;

the Company fully repaid all outstanding balances and fulfilled all obligations under the Streeterville Note as of November 7, 2025.

ATM Program Increase

On September 19, 2025, the Company

entered into an Equity Distribution Agreement (the “ ATM Agreement ”) with Maxim Group LLC

Pursuant to the ATM Agreement, Maxim will act as the Company’s sole sales agent with

respect to the offer and sale from time-to-time of shares of the Company’s common stock, par value $ 0.00001 per share, having

an aggregate gross sales price of up to $ 18,792,009 through one or more “at-the-market” offerings (the “ ATM

Any Shares sold in connection with the ATM Program will be issued pursuant to a shelf registration

statement on Form S-3 (File No.

333-289198) (the “ Shelf Registration Statement ”) filed with the Securities

and Exchange Commission (the “ SEC ”) on August 1, 2025, and declared effective by the SEC on August 8,

2025, the prospectus contained in the Registration Statement, and a prospectus supplement dated September 19, 2025, and a prospectus

supplement dated October 24, 2025.

The Company has agreed to pay Maxim a commission of 3.0 % of the gross sales price of any Shares

sold in the offering.

The Company will also reimburse Maxim for certain specified expenses in connection with its services under the

As of the date of this prospectus supplement, we have sold 15,722,759

shares of our common stock under the ATM Sales Agreement and have received $ 15,568,236

in gross proceeds in connection with these sales.

The Company fully repaid the Streeterville Note utilizing proceeds received from

sales of its common stock under the ATM Program.

October 20, 2025, Scienture, LLC, a wholly owned subsidiary of Scienture Holdings, Inc.

(the “ Company ”), entered

into (i) an amendment to that certain Employment Agreement by and between Scienture, LLC and Dr.

Narasimhan Mani, the Company’s

President and Co-Chief Executive Officer (the “ Mani Employment Amendment ”);

and (ii) an amendment to that certain

Employment Agreement by and between Scienture, LLC and Dr.

Shankar Hariharan, the Company’s Executive Chairman and Co-Chief Executive

Officer (collectively, the “ Employment Amendments ”).

The Employment Amendments became effective on October

1, 2025, and were previously approved by the Compensation Committee of the Company’s Board of Directors (the “ Compensation

Committee ”).

to the Employment Amendments, Dr.

Mani’s annual base salary increased from $ 325,000 to $ 400,000 and Dr.

Hariharan’s annual

base salary increased from $ 175,000 to $ 400,000 , each subject to periodic review by the Compensation Committee.

Additionally, each of

the Employment Amendments modifies Scienture, LLC’s severance obligations to Dr.

Hariharan, respectively, in the event

of termination without Cause or for Good Reason (each as defined in Dr.

Mani’s and Dr.

Hariharan’s respective Employment

Kesin Pharma Corporation

March 11, 2025, Kesin filed a complaint against Scienture in the United States District Court for the Eastern District of New York seeking

payment of the disputed $ 1.285 million.

The case was voluntarily dismissed on October 1, 2025.

The Company and Kesin entered into a Settlement

Agreement and Release on October 27, 2025, whereby Kesin agreed to unconditionally release and discharge the Company from all actions

related to the complaint in exchange for the Company paying $ 1.285 million plus 8 % interest from March 13, 2025, and legal fees and costs

related to the complaint according to a payment schedule through December 2026.

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

What changed 10-Q

Item 1. Financial Statements