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Item 1A. Risk Factors

2026-03-30 compared with 2025-03-26 · 154 added, 419 removed, 1685 unchanged (25% of the section changed)

business is subject to numerous risks and uncertainties, many of which are beyond our control, including those highlighted in the section

titled “ Risk Factors ” immediately following this summary.

These risks include, among others, the following:

Related to Our Business

operate a clinical-stage biopharmaceutical company with a limited operating history, which may make it difficult to evaluate its

current business and predict its future success and viability.

executive officers lack experience with the clinical development of therapeutic products for FDA marketing approval.

need additional capital which may not be available when needed or on commercially acceptable terms, thereby casting substantial doubt

on our ability to continue as a going concern.

Raising additional capital may cause dilution to our stockholders, restrict our operations

or require us to relinquish rights to our product candidates.

To the extent outstanding loan conversion rights associated with our

existing indebtedness are exercised, there will be dilution to our stockholders.

and liabilities could limit the cash flow available for our operations, including under Scienture LLC’s outstanding secured

convertible debt, expose us to risks that could adversely affect our business, financial condition, and results of operations.

to the significant resources required to develop our product pipeline, and depending on our ability to access capital, we must prioritize

the development of certain product candidates over others and we may fail to expend our limited resources on product candidates or

indications that may have been more profitable or for which there is a greater likelihood of success.

acquisitions and investments in new businesses and new products, services, and technologies is inherently risky, and could disrupt

our ongoing businesses.

business is highly dependent on the success of certain product candidates.

If we are unable to successfully complete clinical development,

obtain regulatory approval for or commercialize one or more of our product candidates, or if we experience delays in doing so, our

business will be materially harmed.

are dependent upon our current management, who may have conflicts of interest.

Our ability to develop product candidates and our

future growth depends on attracting, hiring and retaining key personnel and recruiting additional qualified personnel.

may seek to collaborate with third parties and may not be able to implement these collaborations on commercially acceptable terms,

The success of certain of our product candidates may depend in significant part on the success of such collaborations.

third-party manufacturing partners may be unable to increase the scale of production or product yield of our product candidates,

resulting in increased manufacturing costs and delays in commercialization of our products.

Furthermore, changes in methods of manufacturing

our product candidates could result in additional costs or delays.

growth depends in part on the success of our strategic relationships with third parties.

Some of these third parties may be located

outside of the United States.

in methods of product candidate manufacturing or formulation may result in additional costs or delay.

may be subject to lawsuits.

successful development of Scienture LLC’s pharmaceutical products involves a lengthy and expensive process and is highly uncertain.

Related to Our Legal and Regulatory Requirements

are subject, directly or indirectly, to federal and state healthcare, fraud, abuse false claims, and other laws and regulations as

well as health data privacy and security laws and regulations, contractual obligations and self-regulatory schemes.

If we are unable

to comply, or have not fully complied, with such laws, we could face investigations and substantial penalties.

Furthermore, it may

be difficult and costly for us to comply with the extensive government regulations to which our business is subject.

may be unable to obtain regulatory approval for our product candidates under applicable regulatory requirements.

The denial or delay

of any such approval would delay commercialization of our product candidates and adversely impact our business and results of operations.

if we obtain regulatory approval for any of our product candidates, we will be subject to ongoing regulatory requirements, which

may result in significant additional expenses.

Additionally, our product candidates, if approved, could be subject to labeling and

other restrictions, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated

problems with our product candidates.

intend to use certain regulatory pathways to seek regulatory approval of several of our product candidates.

If the FDA concludes

that our marketing applications no longer qualify for these regulatory pathways, then our applications may not be accepted by the

FDA for review and approval of our products may be delayed.

may seek priority review designation for our product candidates.

We might not receive such designation, and even if we do, such designation

may not lead to faster regulatory review or approval.

may seek orphan drug designation from the FDA for our product candidates.

We may be unable to obtain such designation or, if obtained,

to maintain the benefits associated with orphan drug status, including the potential for non-patent market exclusivity.

regulatory authorities approve generic versions of our products, or do not grant our products a sufficient period of market exclusivity

before approving a generic version, our ability to generate revenue may be adversely affected.

if we obtain FDA approval for a product candidate in the United States, we may never obtain approval for or successfully commercialize

that candidate outside of the United States, which would limit our ability to realize a product’s full market potential.

if we are able to commercialize any of our product candidates, the third-party payor coverage and reimbursement status of newly-approved

products are uncertain.

Failure to obtain or maintain adequate coverage and reimbursement for our product candidates could limit

our ability to market those products and decrease our ability to generate revenue.

are developing a drug-device combination product, which may result in additional regulatory risks.

third party collaborators and service providers are, or may become, subject to a variety of stringent and evolving privacy and data

security laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to privacy

and data security.

Any actual or perceived failure to comply with such obligations could expose us to significant fines or other

penalties and otherwise harm our business and operations.

FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

legislative reform measures may have a negative impact on our business and results of operations.

funding for the FDA and other government agencies, including from government shutdowns, or other disruptions to these agencies’

operations, could hinder such agencies’ ability to hire and retain key leadership and other personnel, prevent new products

and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal

business functions on which the operation of our business may rely.

Related to Our Technology and Intellectual Property

may not be able to protect our intellectual property and trade secret rights throughout the world.

If our efforts to protect our

intellectual property rights are inadequate, we may not be able to compete effectively in our market.

depend on in-licensed intellectual property.

If we fail to comply with our obligations under intellectual property licenses with

third parties, we could lose license rights that are important to our business.

we or our licensors are unable to obtain and maintain patent protection for our product candidates, or if the scope of the patent

protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to our

product candidates, and our ability to successfully commercialize our product candidates may be adversely affected.

we do not intend to seek patent protection for one of our products, SCN-106.

and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements

imposed by governmental patent agencies.

Our patent protection could be reduced or eliminated for non-compliance with these requirements.

patents covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO.

to patent law in the United States and in foreign jurisdictions could diminish the value of our patents in general, thereby impairing

our ability to protect our product candidates.

we do not obtain patent term extension for our current product candidates, our business may be materially harmed.

may become involved in lawsuits to protect or enforce our intellectual property rights, which could be distracting, expensive, time

consuming, and unsuccessful.

may be subject to claims challenging the inventorship or ownership of our intellectual property or asserting that we violated intellectual

property rights of others, the outcome of which would be uncertain.

These claims could be extremely costly to defend, could require

us to pay significant damages and limit our ability to operate, and could distract our personnel from normal responsibilities.

patents and patent applications could be challenged in the recently created Unified Patent Court for the European Union.

use, or the use by our third party collaborators and service providers, of new and evolving technologies, such as artificial intelligence

(“AI”) and machine learning (“ML”), may result in spending additional resources and present new risks and

challenges that can impact our business, including by posing security and other risks to our sensitive data.

As a result, we may

be exposed to reputational harm, other adverse consequences, and liability.

our trademarks and trade names are not adequately protected then we may not be able to build name recognition in our markets of interest

and our business may be adversely affected.

Related to Our Common Stock

may not be able to comply with Nasdaq’s continued listing standards.

common stock has in the past been a “penny stock” under SEC rules, and may be subject to the “penny stock”

rules in the future.

It may be more difficult to resell securities classified as “penny stock.”

exercise of outstanding warrants, options and other securities that are exercisable into shares of our common stock will be dilutive

to our existing stockholders.

have not historically paid or declared any dividends on our common stock and do not expect to pay or declare cash dividends in the

future on a regular basis, if at all.

common stock price is likely to be highly volatile because of several factors, including a limited public float.

may not be sufficient liquidity in the market for our securities in order for investors to sell their shares.

The market price of

our common stock may continue to be volatile.

may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of additional shares

of our common stock.

should be aware that there are substantial risks for an investment in our common stock.

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hold a clinical-stage biopharmaceutical company with a limited operating history.

Scienture LLC was formed in 2019 and its operations

to date have been limited to organizing and staffing its company, business planning, raising capital, identifying and developing its

product candidates for the treatment of central nervous system (“CNS”) and cardiovascular (“CVS”) diseases, securing

intellectual property rights, and planning and undertaking preclinical studies and clinical trials.

Scienture LLC has not yet demonstrated

an ability to generate revenues, obtain regulatory approvals, manufacture any product on a commercial scale or arrange for a third party

to do so on its behalf or conduct sales and marketing activities necessary for successful product commercialization.

Scienture LLC’s

limited operating history as a company makes any assessment of its future success and viability subject to significant uncertainty.

LLC will encounter risks and difficulties frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields,

and Scienture LLC has not yet demonstrated an ability to successfully overcome such risks and difficulties.

If Scienture LLC does not

address these risks and difficulties successfully, its business will suffer.

Scienture LLC was formed in 2019 and its

operations to date have been limited to organizing and staffing its company, business planning, raising capital, identifying and

developing its product candidates for the treatment of central nervous system (“CNS”) and cardiovascular

(“CVS”) diseases, securing intellectual property rights, and planning and undertaking preclinical studies and clinical

Scienture LLC has not yet demonstrated an ongoing ability to generate revenues, obtain regulatory approvals, manufacture any

product on a commercial scale or arrange for a third party to do so on its behalf or conduct sales and marketing activities

necessary for successful product commercialization.

Scienture LLC’s limited operating history as a company makes any

assessment of its future success and viability subject to significant uncertainty.

Scienture LLC encounters risks and

difficulties frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields, and Scienture LLC has not

yet demonstrated an ability to successfully overcome such risks and difficulties.

If Scienture LLC does not address these risks and

difficulties successfully, its business will suffer.

success of our business depends primarily upon its ability to identify, develop, and commercialize product candidates, including our

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effect on our financial condition.

We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to

increase as we continue our research and development of, and seek regulatory approvals for, our product candidates.

We expect to continue to incur significant losses for the foreseeable future, and we expect these

losses to increase as we continue our research and development of, and seek regulatory approvals for, our product candidates.

anticipate that our expenses will increase substantially if, and as, we:

its product candidates through clinical development;

regulatory approvals for Scienture LLC’s product candidates that successfully complete clinical trials;

additional clinical, quality control, medical, scientific and other technical personnel to support the clinical development of Scienture

LLC’s product candidates;

an increase in headcount as Scienture LLC expands its research and development organization and market development and pre-commercial

our product candidates through clinical development;

regulatory approvals for our product candidates that successfully complete clinical trials;

additional clinical, quality control, medical, scientific and other technical personnel to support the clinical development of our product candidates;

an increase in headcount as we expand our research and development organization and market development and pre-commercial

planning activities;

any pre-commercial or commercial activities to establish sales, marketing and distribution capabilities, including in relation to

its product candidates;

our product candidates;

to identify, acquire and develop additional product candidates, including through business development efforts to invest in or in-license

other technologies or product candidates;

expands and protects its intellectual property portfolio;

milestone, royalty or other payments due under any future in-license or collaboration agreements;

milestone, royalty, interest or other payments due under any future financing or other arrangements with third parties.

expand and protect our intellectual property portfolio;

milestone, royalty, interest, or other payments due under any in-license, collaboration agreements;

financing agreements, or other arrangements with third parties.

Biopharmaceutical

product development entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail

to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and reimbursement and

become commercially viable, and therefore any investment in us is highly speculative.

Accordingly, you should consider our prospects,

factoring in the costs, uncertainties, delays and difficulties frequently encountered by companies in clinical development, especially

clinical-stage biopharmaceutical companies such as us.

Any predictions you make about our future success or viability may not be as accurate

as they would otherwise be if it had a longer operating history or a history of successfully developing and commercializing pharmaceutical

We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving Scienture

LLC’s business objectives.

product development entails substantial upfront capital expenditures and significant risk that any potential product candidate will

fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and

reimbursement and become commercially viable, and therefore any investment in us is highly speculative.

Accordingly, you should

consider our prospects, factoring in the costs, uncertainties, delays and difficulties frequently encountered by companies in

clinical development, especially clinical-stage biopharmaceutical companies such as us.

Any predictions you make about our future

success or viability may not be as accurate as they would otherwise be if we had a longer operating history or a history of

successfully developing and commercializing pharmaceutical products.

We may encounter unforeseen expenses, difficulties,

complications, delays and other known or unknown factors in achieving our business objectives.

Additionally,

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clinical trials in addition to those that we currently expect, or if there are any delays in establishing appropriate manufacturing arrangements

for or in completing its clinical trials or the development of any of our product candidates.

of our executive officers lack experience with the clinical development of therapeutic products for FDA marketing approval.

primary executive officers, including Suren Ajjarapu, Chairman of the Board, Chief Executive Officer, and Secretary, and Prashant Patel,

President, Chief Operating Officer, Interim Principal Financial/Accounting Officer and Director, lack experience in overseeing the clinical

development of therapeutic products for FDA marketing approval.

While Scienture LLC’s executive officers have extensive experience

in this regard, the lack of such experience at the executive level of the Company presents a risk that the Company may not effectively

oversee the operations of Scienture LLC and Scienture LLC’s comply with applicable laws, rules and regulations.

need additional capital which may not be available when needed or on commercially acceptable terms, thereby casting substantial doubt

on our ability to continue as a going concern.

Raising additional capital may cause dilution to our stockholders, restrict our operations

or require us to relinquish rights to our product candidates.

To the extent outstanding loan conversion rights associated with our existing

indebtedness are exercised, there will be dilution to our stockholders.

historical financial statements have been prepared under the assumption that we will continue as a going concern.

After the Company’s

disposed of Micro Merchant Systems, Inc.

(“MMS”), the Company had $3.5 million in cash.

The Company received $7.5 million

in May 2024 pertaining to the final payment of the MMS disposition.

As of December 31, 2024, the Company had an accumulated deficit of

$39.04 million.

We have limited financial resources, as of December 31, 2024, we had a cash balance of $308,096.

LLC’s activities of developing biopharmaceutical products, including conducting preclinical studies and clinical trials, is a very

for or in completing our clinical trials or the development of any of our product candidates.

need additional capital which may not be available when needed or on commercially acceptable terms.

Raising additional capital may cause

dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates.

Developing biopharmaceutical products, including conducting preclinical studies and clinical trials, is a very

time-consuming, expensive and uncertain process that takes years to complete.

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with research and development of product candidates, we are unable to predict the timing or amount of our working capital requirements.

such time, if ever, as we can generate substantial product revenue, we expect to finance our operations with existing cash, cash equivalents,

short-term investments, and any future equity or debt financings and upfront and milestone and royalty payments, if any, received under

any future licenses or collaborations.

While the Company believes that its cash as of the date of this Registration Statement will be

sufficient to meet its funding requirements during the next 12 months, this belief may prove to be wrong as we could utilize available

capital resources sooner than we expect.

We will eventually need to raise additional capital or secure debt funding to support on-going

such time, if ever, as we can generate substantial product revenue, we expect to finance our operations with existing cash, cash

equivalents, short-term investments, and any future equity or debt financings and upfront and milestone and royalty payments, if

any, received under any future licenses or collaborations.

While we believe that our cash as of the date of this Annual Report will

be sufficient to meet our funding requirements during the next 12 months, this belief may prove to be wrong as we could utilize

available capital resources sooner than we expect.

We will eventually need to raise additional capital or secure debt funding to

support on-going operations.

This may include raising additional financing on an opportunistic basis in the future.

For example, we may seek to raise

equity capital or obtain additional capital in the near term due to favorable market conditions or strategic considerations even if we

believe we have sufficient funds for current or future operating plans.

For example, we

may seek to raise equity capital or obtain additional capital in the near term due to favorable market conditions or strategic

considerations even if we believe we have sufficient funds for current or future operating plans.

to secure additional financing may divert management from day-to-day activities, which may adversely affect our ability to develop product

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efforts or other operations.

September 2023, Scienture LLC entered into a Loan and Security Agreement dated September 8, 2023, by and between NV Finance LLC, a Nebraska

Limited Liability Company (“NVK”) and Scienture LLC (the “NVK Loan Agreement”) for a principal amount of $2,000,000.

The loan is due upon maturity, together with all unpaid interest expense, in September 2025.

The outstanding balance under the NVK debt

is convertible, at NVK’s option at any time, into common stock.

NVK is entitled to receive warrants to purchase shares of Scienture

LLC’s common stock.

Scienture LLC entered into a Consent and Waiver on July 25, 2024 (the “NVK Consent and Waiver”),

regarding the NVK loan in connection with the business combination with the Company.

Under the NVK Consent and Waiver, the warrants previously

granted to NVK were converted into 5.25% warrants on a fully diluted basis, equalling 500,526 shares of outstanding common stock of Scienture

LLC and placed in escrow.

Any such conversion by NVK will result in dilution to holders Conversely, should NVK not exercise its conversion

right prior to maturity of the loan, Scienture LLC would need to obtain additional financing to fund its cash payment obligations thereunder.

we raise additional capital through the sale of equity or convertible debt securities or we issue any equity or convertible debt securities

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may have an adverse effect on us.

matters, when considered in the aggregate, raise substantial doubt about our ability to continue as a going concern for a reasonable

period of time, which is defined as within one year after the date that our condensed financial statements are issued.

The financial

herein do not contain any adjustments to reflect the possible future effects on the classification of assets or the amounts and classification

of liabilities that might result from the outcome of this uncertainty.

The doubt regarding our potential ability to continue as a going

concern may adversely affect our ability to obtain new financing on reasonable terms or at all.

Additionally, if we are unable to continue

as a going concern, our stockholders may lose some or all of their investment in the Company.

and liabilities could limit the cash flow available for our operations, including under Scienture LLC’s outstanding secured convertible

debt, expose us to risks that could adversely affect our business, financial condition, and results of operations.

September 2023, Scienture LLC incurred $2 million of indebtedness under a Loan and Security Agreement dated September 8, 2023, by and

between NVK Finance LLC, a Nebraska Limited Liability Company (“NVK”) and Scienture LLC (the “NVK Loan Agreement”)

in connection with the business combination of NVK with Scienture LLC.

In the future, we may incur indebtedness to meet financing needs

or otherwise refinance existing indebtedness.

Indebtedness could have significant negative consequences for our security holders and

our business, results of operations, and financial condition by, among other things:

vulnerability to adverse economic and industry conditions;

our ability to obtain additional financing;

the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which would reduce the amount

of cash available for other purposes;

our flexibility to plan for, or react to, changes in our business;

us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.

LLC’s obligations under the NVK loan agreement are secured by a first priority security interest in all of Scienture LLC’s

assets, including its intellectual property rights.

Accordingly, Scienture LLC’s failure to perform its obligations under the NVK

loan agreement could result in NVK selling to foreclose on this collateral.

Our business may not generate sufficient funds, and we may

otherwise be unable to maintain sufficient cash reserves to pay amounts due under any indebtedness incurred.

to the significant resources required to develop our product pipeline, and depending on our ability to access capital, we must prioritize

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that may have been more profitable or for which there is a greater likelihood of success.

LLC’s lead product candidate, SCN-102, for the treatment of hypertension, was only recently approved by the FDA.

Its other product

candidates and programs are at various stages of development, and Scienture LLC has not yet initiated clinical trials for these other

candidates in our pipeline.

We seek to support Scienture LLC in rapidly advancing discovery and development of transformational medicines

for patients suffering from CNS and CVS diseases.

to the significant resources required for the development of our product candidates, we must decide which product candidates and indications

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such strategies and offerings will be successful and will not adversely affect our reputation, financial condition, and operating results.

To date we have taken losses and/or write-downs on several businesses, products, services, and technologies.

had $725,973 of loss on impairment of goodwill for the fiscal year ended December 31, 2020, in connection with the acquisition of

Community Specialty Pharmacy, LLC;

designed and invested resources into the “Bonum Health Hub”, a self-enclosed, free standing virtual examination room,

which was launched by the Company’s wholly-owned Bonum Health, LLC, in November 2019 and was expected to be operational in

however, the Company does not anticipate installations moving forward, and took a write off of the hubs purchased at

June 30, 2021 in the amount of $143,891, which was included under loss on inventory investments in the statement of operations for

the year ended December 31, 2021;

also used resources and funding to create a Health Passport application during 2020 and 2021, which was planned to store a user’s

health and vaccination status and allow confirmation thereof via a QR code;

however, we did not generate any revenue from this product

and the product was discontinued at the end of December 2021;

had $792,500 of loss on impairment of intangible assets related to our investment in the joint venture SOSRx, LLC formed in February

The subsidiary did not generate material revenue and in February of 2023 the Company voluntarily withdrew from the joint

venture agreement.

The asset impairment is reflected in the statement of operations for the year ended December 31, 2022 as impairment

of intangible asset.

Additionally, the Company contributed a cash investment of $275,000 in February of 2022 when the joint venture

was formed, the Company did not recover this investment as part of the withdrawal settlement;

recorded a loss of $875,250 in connection with CSP Test Kits purchased for our Community

Specialty Pharmacy that were later deemed inappropriate for distribution by the FDA.

inventory was written down and was recorded as loss on inventory investment in the statement

of operations during the year ended December 31, 2022;

the year ended December 31, 2023 we acquired Superlatus through a merger transaction, however, due to various complications with

the post-closing integration we elected to divest Superlatus in March 2024 for $1.

As a result of this divestiture, the Company recognized

a goodwill impairment loss of $5.1 million for the year ended December 31, 2023.

use of resources for new businesses and new products, services, and technologies, to the extent such new businesses and new products,

services, and technologies do not generate revenues or profits may take management’s focus and time away from more profitable endeavors,

may require the Company to take significant write-downs or write-offs, may take funding away from the Company’s other operations

or growth opportunities, which may ultimately be more profitable, and may have a material adverse effect on the Company’s cash

flows, liquidity and revenues, any or all of which may cause the value of the Company’s securities to decline in value or become

may require us to take significant write-downs or write-offs, may take funding away from our other operations

or growth opportunities, which may ultimately be more profitable, and may have a material adverse effect on our cash

flows, liquidity and revenues, any or all of which may cause the value of our securities to decline in value or become

business is highly dependent on the success of certain product candidates.

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will be materially harmed.

LLC has not completed the development of any product candidates.

Although Scienture LLC has initiated development for product candidates,

all of these candidates, other than SCN-102, remain in early-stage clinical or preclinical development.

Our future success and ability

to generate revenue from Scienture LLC’s product candidates is dependent on our ability to successfully develop, obtain regulatory

approval for and commercialize one or more of our product candidates.

Even though approved by the FDA, SCN-102 will require substantial additional

investment for commercialization, clinical development, regulatory review, and approval in one or more jurisdictions.

If any of Scienture

LLC’s product candidates encounters safety or efficacy problems, development delays, regulatory issues or other problems, our development

plans and business would be materially harmed.

may not have the financial resources to continue development of Scienture LLC’s product candidates, particularly if Scienture LLC

experience any issues that delay or prevent regulatory approval of, or its ability to commercialize, product candidates, including:

LLC’s inability to demonstrate to the satisfaction of the FDA or other comparable regulatory authorities that our product candidates

LLC has completed development of SCN-102, which received FDA regulatory approval in March 2025 and commenced commercialization in the

third quarter of 2025.

The remaining product candidates — SCN-104, SCN-106, and SCN-107 — remain in clinical or preclinical

Management expects SCN-104 and SCN-106 to achieve regulatory approval in 2027 or 2028, with commercialization projected

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

future success and ability to generate revenue from Scienture LLC’s product candidates is dependent on our ability to successfully develop,

obtain regulatory approval for, and commercialize one or more of our remaining product candidates.

If any of Scienture LLC’s product

candidates encounters safety or efficacy problems, development delays, regulatory issues, or other problems, our development plans and

business would be materially harmed.

may not have the financial resources to continue development of our product candidates, particularly if we experience any issues

that delay or prevent regulatory approval of, or our ability to commercialize, product candidates, including:

inability to demonstrate to the satisfaction of the FDA or other comparable regulatory authorities that our product candidates

are safe and effective;

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of our financial and other resources to complete the necessary clinical trials and preclinical studies;

or inconclusive results from Scienture LLC’s clinical trials, preclinical studies or

the clinical trials of others for product candidates similar to Scienture LLC, leading to

a decision or requirement to conduct additional clinical trials or preclinical studies or

abandon a program;

or inconclusive results from clinical trials, preclinical studies or the clinical trials of others for product

candidates similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies

or abandon a program;

product-related

adverse events experienced by subjects in Scienture LLC’s clinical trials, including unexpected toxicity results, or by individuals

using drugs or therapeutic biologics similar to Scienture LLC’s product candidates;

in submitting an Investigational New Drug (“IND”) application or other regulatory submission to the FDA or other comparable

regulatory authorities, or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial or

a suspension or termination, or hold, of a clinical trial once commenced;

imposed by the FDA or other comparable regulatory authorities regarding the scope or design of Scienture LLC’s clinical trials;

adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals

using drugs or therapeutic biologics similar to our product candidates;

in submitting an IND application or other regulatory submission to the FDA or other comparable regulatory authorities, or delays or failure in obtaining the necessary approvals from regulators to commence a

clinical trial or a suspension or termination, or hold, of a clinical trial once commenced;

imposed by the FDA or other comparable regulatory authorities regarding the scope or design of our clinical trials;

effectiveness of our product candidates during clinical trials;

than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from Scienture

LLC’s clinical trials;

in enrolling subjects in Scienture LLC’s clinical trials;

drop-out rates of subjects from Scienture LLC’s clinical trials;

supply or quality of product candidates or other materials necessary for the conduct of Scienture LLC’s clinical trials;

than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from our clinical trials;

in enrolling subjects in our clinical trials;

drop-out rates of subjects from our clinical trials;

supply or quality of product candidates or other materials necessary for the conduct of our clinical trials;

than anticipated clinical trial or manufacturing costs;

FDA or comparable regulatory authority inspection and review of Scienture LLC’s clinical trial sites;

FDA or comparable regulatory authority inspection and review of our clinical trial sites;

of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise

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and changes in regulatory requirements, policies and guidelines, including the imposition of additional regulatory oversight around

clinical testing generally or with respect to Scienture LLC’s therapies in particular;

clinical testing generally or with respect to our therapies in particular;

interpretations of data by the FDA or other comparable regulatory authorities.

a material effect on 15

addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval

in one country does not guarantee regulatory approval in any other country.

Scienture LLC may in the future conduct one or more of its

clinical trials with one or more trial sites that are located outside the United States.

We may in the future conduct one or more clinical trials with one or more trial sites that are located outside the United States.

Although the FDA may accept data from clinical

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Involvement of

our officers and directors in other businesses may present a conflict of interest regarding decisions they make for the Company or with

respect to the amount of time available for the Company.

the specialized nature of CNV and CVS diseases and our approach, there is an inherent scarcity of experienced personnel in these fields.

As we continue developing product candidates, we will require personnel with medical, scientific, or technical qualifications specific

to each program.

The loss of any of our officers or directors, in particular our current management team consisting of Shankar Hariharan,

Narasimhan Mani, Rahul Surana, Suren Ajjarapu, or Prashant Patel, could have a materially adverse effect upon our business and future

Company holds, on behalf of and for the benefit of Mr.

Ajjarapu, a personal disability insurance policy providing for a $1,500,000 lump

sum benefit, payable to Mr.

Ajjarapu, in the event of Mr.

Ajjarapu’s disability.

The premiums on such policy will be paid by the

Company for so long as Mr.

Ajjarapu is employed by the Company.

The Company also holds a $4,000,000 key-man life insurance policy on

the life of Mr.

Ajjarapu, and a $1,500,000 lump sum disability insurance policy on Mr.

Ajjarapu, providing for the Company as beneficiary

of such policies.

The Company does not hold key-man life insurance policies for any other employees.

our officers and directors in other businesses may present a conflict of interest regarding decisions they make for us or with

respect to the amount of time available for us.

the specialized nature of CNS and CVS diseases and our approach, there is an inherent scarcity of experienced personnel in these

As we continue developing product candidates, we will require personnel with medical, scientific, or technical

qualifications specific to each program.

The loss of any of our officers or directors, in particular our current management team

consisting of Shankar Hariharan, Narasimhan Mani or Rahul Surana, could have a materially adverse

effect upon our business and future prospects.

our efforts to retain valuable employees, members of our team may terminate employment on short notice.

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that may be available for partnership or collaboration and whether such a partnership or collaboration could be more attractive than

the one with the Company for our product candidate.

the one with us for our product candidate.

If we elect to increase expenditures to fund development or commercialization activities

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successful, we cannot assure you that these relationships will result in increased customer use of our products or increased revenue.

do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates, and

we lack the resources and the capabilities to do so.

Our current strategy is to outsource all manufacturing of its product candidates

to third parties, including in jurisdictions outside of the United States such as China.

As such, we currently rely on third-party manufacturers

to provide all of the API and the final drug product formulation of all of our product candidates that are being used in our clinical

trials and preclinical studies.

If we were to need an alternate manufacturer, we would incur added costs and delays in identifying and

qualifying any such replacement.

In addition, we typically order raw materials, API and drug product and services on a purchase order

basis and do not enter into long-term dedicated capacity or minimum supply arrangements with any commercial manufacturer.

be able to timely secure needed supply arrangements on satisfactory terms, or at all.

Our failure to secure these arrangements as needed

could have a material adverse effect on our ability to complete the development of our product candidates or, to commercialize them,

We may be unable to conclude agreements for commercial supply with third-party manufacturers or may be unable to do so on

acceptable terms.

There may be difficulties in scaling up to commercial quantities and formulation of our product candidates, and the

costs of manufacturing could be prohibitive.

do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates,

and we lack the resources and the capabilities to do so.

Our current strategy is to outsource all manufacturing of our product

candidates to third parties, including in jurisdictions outside of the United States such as China.

As such, we currently rely on

third-party manufacturers to provide all of the Active Pharmaceutical Ingredients (“API”) and the final drug product formulation of all of our product candidates that are

being used in our clinical trials and preclinical studies.

If we were to need an alternate manufacturer, we would incur added costs

and delays in identifying and qualifying any such replacement.

In addition, we typically order raw materials, API and drug product

and services on a purchase order basis and do not enter into long-term dedicated capacity or minimum supply arrangements with any

commercial manufacturer.

We may not be able to timely secure needed supply arrangements on satisfactory terms, or at all.

failure to secure these arrangements as needed could have a material adverse effect on our ability to complete the development of

our product candidates or, to commercialize them, if approved.

We may be unable to conclude agreements for commercial supply with

third-party manufacturers or may be unable to do so on acceptable terms.

There may be difficulties in scaling up to commercial

quantities and formulation of our product candidates, and the costs of manufacturing could be prohibitive.

of the third-party manufacturers we rely on have only recently begun working with us and have limited or no experience manufacturing

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possible misappropriation of our proprietary information, including our trade secrets and know-how.

we do not maintain its key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing

we do not maintain our key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing

capabilities, which could delay or impair our ability to obtain regulatory approval for our product candidates.

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Additionally, it is possible further tariffs

may be imposed that could affect imports of any Active Pharmaceutical Ingredients (“APIs”) used in our product candidates

may be imposed that could affect imports of any APIs used in our product candidates

in the future, or our business may be adversely impacted by retaliatory trade measures taken by China or other countries, including restricted

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could result in the expenditure of significant financial and managerial resources.

August 2022 and April 2023, Scienture LLC entered into exclusive license and commercial agreements with Kesin Pharma Corporation (“Kesin”),

a related party, pursuant to which Scienture LLC granted the exclusive license rights to commercialize two of its potential products,

SCN-102 and SCN-104, to Kesin for use in the United States.

In March 2024, Scienture LLC and Kesin agreement to terminate those agreements

and agreed that Scienture LLC would pay Kesin a total gross amount of $1.3 million upon commercialization of either SCN-102 or SCN-104

via a royalty arrangement.

This agreement also requires that if the full $1.3 million has not been repaid within two years of the earlier

of i) commercial launch of a product or ii) 120 days after FDA approval of a product, then interest will accrue prospectively at a rate

of 8% annually on the unpaid balance.

In August 2024, Kesin demanded immediate payment of the full amount under this agreement, alleging

it is payable in connection with the consummation Scienture LLC’s business combination with the Company.

We have disputed that

the amount is now payable, and we have been in discussions to resolve the issue.

However, on March 11, 2025, Kesin filed a complaint against

Scienture LLC in the United States District Court for the Eastern District of New York seeking payment of the disputed $1.285 million.

We intend to vigorously defend ourself in this matter.

can be no assurance that an amicable resolution will be obtained and the litigation arising from this matter could be costly and may

divert management’s attention from the day-to-day operations of our business.

We would have to obtain financing to fund any amounts

payable under this agreement.

successful development of Scienture LLC’s pharmaceutical products involves a lengthy and expensive process and is highly uncertain.

development of Scienture LLC’s pharmaceutical products involves a lengthy and expensive process, is highly uncertain, and is dependent

successful development of our pharmaceutical products involves a lengthy and expensive process and is highly uncertain.

development of our pharmaceutical products involves a lengthy and expensive process, is highly uncertain, and is dependent

on numerous factors, many of which are beyond our control.

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patients who fail the trial screening process, slow enrollment in clinical trials, patients dropping out of trials, patients lost

to follow-up, length of time to achieve trial endpoints, additional time requirements for data analysis or New Drug Application (“NDA”)

or similar foreign application preparation, discussions with the FDA or other comparable regulatory authority, FDA or other comparable

to follow-up, length of time to achieve trial endpoints, additional time requirements for data analysis or NDA or similar foreign application preparation, discussions with the FDA or other comparable regulatory authority, FDA or other comparable

regulatory request for additional preclinical or clinical data (such as long-term toxicology studies) or unexpected safety or manufacturing

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the submission of safety and other post-marketing information and reports and registration, and will need to continue to comply (or ensure

that our third-party providers comply) with current Good Manufacturing Practices (“cGMPs”) and Good Clinical Practices (“GCPs”)

for any clinical trials that we conduct post-approval.

that our third-party providers comply) with current cGMPs and GCPs for any clinical trials that we conduct post-approval.

In addition, there is always the risk that we, a regulatory authority or a third

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at the federal and state level might also require us to make costly system purchases /or modifications from time to time.

For more information,

see “ Scienture’s Business–Government Regulation–Other Healthcare Laws.

also may be subject to extensive, and frequently changing, local, state and federal laws and regulations relating to healthcare fraud,

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of any such approval would delay commercialization of our product candidates and adversely impact our business and results of operations.

We have not prepared or submitted an NDA or submitted similar filings to comparable foreign regulatory authorities

for product candidates other than SCN-102.

An NDA or other similar

regulatory filing requesting approval to market a product candidate must include extensive preclinical and clinical data and supporting

information to establish that the product candidate is safe, effective, pure and potent for each desired indication.

The NDA or other

similar regulatory filing must also include significant information regarding the chemistry, manufacturing and controls for the product .

An NDA or other similar regulatory filing requesting approval to market a product candidate must include extensive

preclinical and clinical data and supporting information to establish that the product candidate is safe, effective, pure and potent

for each desired indication.

The NDA or other similar regulatory filing must also include significant information regarding the chemistry,

manufacturing and controls for the product.

research, testing, manufacturing, labeling, approval, sale, marketing and distribution of pharmaceutical products are subject to extensive

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products that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future.

information, see “ Scienture’s Business–Government Regulation– Pharmaceutical Coverage, Pricing, and Reimbursement .”

is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.

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post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

more information, see “ Scienture’s Business– Other Regulatory Requirements–Healthcare Reform .”

policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems

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parties, we could lose license rights that are important to our business.

LLC is a party to a Feasibility Study and Animal Trial Material Manufacturing Agreement with Innocore Technologies, B.V.

(“Innocore”),

as amended on December 2, 2022 (the “Innocore License”), an exclusive and royalty-bearing intellectual property license agreement.

LLC is a party to the Innocore License, an exclusive and royalty-bearing intellectual property license agreement.

In connection with our efforts to expand our pipeline of product candidates, we expect to enter into additional license agreements in

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may not be able to comply with Nasdaq’s continued listing standards.

is no guarantee that we will be able to maintain our listing on Nasdaq for any period of time by perpetually satisfying Nasdaq’s

continued listing requirements.

Our failure to continue to meet these requirements may result in our securities being delisted from Nasdaq.

At times, including during our 2023 and 2024 fiscal years, we have received deficiency notices from Nasdaq regarding our inability to

comply with various of the continued listing rules (including stockholders’ equity requirements, publicly held share requirements,

and timely filing requirements).

For example, the Company received a written notice from the Listing Qualifications department of Nasdaq

on January 3, 2025, indicating that the Company (i) was not in compliance with Nasdaq Listing Rule 5620(a), due to the Company not holding

an annual meeting of stockholders in 2024 within one year of the Company’s 2023 fiscal year end and (ii) had until February 18,

We have taken steps to attempt to regain compliance with Nasdaq Listing Rule 5620(a), including by scheduling a 2024 annual

meeting of stockholders for March 10, 2025, and filing a proxy statement for such meeting with the SEC on January 27, 2025, as amended

on February 18, 2025.We timely submitted a plan to Nasdaq proposing to regain compliance by holding the 2024 annual meeting of stockholders

on March 10, 2025.

On February 24, 2025, Nasdaq notified us that it has accepted our plan and determined to grant us an extension to

regain compliance with Nasdaq Listing Rule 5620(a) until March 10, 2025, the date that we will hold the 2024 annual meeting of stockholders.

the Company believes it will be able to timely regain compliance with Nasdaq’s continued listing requirements, there can be no

assurance that the Company will be able to regain compliance with Nasdaq Listing Rule 5620(a) or will otherwise be able to

maintain compliance with other Nasdaq listing criteria.

If our common stock were to be delisted from Nasdaq, it would likely reduce the

liquidity of our common stock, and, among other things, may decrease the attractiveness of our common stock to the investment community,

and make it more difficult for us to issue equity securities for capital raising purposes or for acquisitions.

is no guarantee that we will be able to maintain our listing on Nasdaq for any period of time by perpetually satisfying

Nasdaq’s continued listing requirements.

Our failure to continue to meet these requirements may result in our securities being

delisted from Nasdaq.

At times, we have received deficiency notices from Nasdaq regarding our inability to comply with various of

the continued listing rules (including stockholders’ equity requirements, publicly held share requirements, and timely filing

requirements).

For example, on October 14, 2025, we received a written notice from the Listing Qualifications department of

Nasdaq indicating that we were not in compliance with Nasdaq Listing Rule 5450(a)(1), as the minimum bid price of our common stock

had been below $1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”).

notice had no immediate effect on the listing or trading of our common stock on Nasdaq.

According to the notice, we have 180

calendar days, or until April 13, 2026 (the “Initial Compliance Period”), to regain compliance with the Minimum Bid

Price Requirement.

To regain compliance, the minimum bid price of our common stock must meet or exceed $1.00 per share for a minimum

of ten consecutive business days during the Initial Compliance Period.

the event we do not regain compliance with the Minimum Bid Price Requirement during the Initial Compliance Period, we may be eligible

for an additional 180-calendar day compliance period (the “Additional Compliance Period”) if, at that time, we meet the continued

listing requirement for the market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market,

with the exception of the bid price requirement.

Additionally, we would need to provide written notice of our intention to cure the deficiency

during the Additional Compliance Period, including by effecting a reverse stock split, if necessary.

Our failure to regain compliance

during the Initial Compliance Period or the Additional Compliance Period, if applicable, could result in delisting.

we believe we will be able to timely regain compliance with Nasdaq’s continued listing requirements, there can be no assurance

that we will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be able to maintain compliance with

other Nasdaq listing criteria.

If our common stock were to be delisted from Nasdaq, it would likely reduce the liquidity of our

common stock, and, among other things, may decrease the attractiveness of our common stock to the investment community, and make it

more difficult for us to issue equity securities for capital raising purposes or for acquisitions.

common stock has in the past been a “penny stock” under SEC rules, and may be subject to the “penny stock” rules

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to our existing stockholders.

of the date of this Registration Statement, we had outstanding various warrants, stock options and other securities that are exercisable

of the date of this Annual Report, we had outstanding various warrants, stock options and other securities that are exercisable

into shares of our common stock.

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business assets and not paid from cash generated in our operations.

The Company has not historically paid or declared any dividends on

We have not historically paid or declared any dividends on

our common stock or preferred stock.

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existing management.

all of the foregoing reasons and others set forth herein, an investment in our securities involves a high degree of risk.

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-K

Item 1A. Risk Factors