What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-15 · 397 added, 388 removed, 737 unchanged (52% of the section changed)

3 unchanged sentences

Consolidated Balance Sheets

of March 31, 2026 and December 31, 2025

of June 30, 2026 and December 31, 2025

June 30, 2026

December 31, 2025

Current assets:

4 unchanged sentences

Total current assets

Restricted cash

Property, plant and equipment, net

9 unchanged sentences

Warrant liability

Note payable, net of debt discount - current portion

Development agreement liability - current portion

Total current liabilities

Note payable, net of debt discount

Development agreement liability

6 unchanged sentences

0 shares issued and

outstanding as of both March 31, 2026 and December 31, 2025

outstanding as of both June 30, 2026 and December 31, 2025

Series B preferred stock, $ 0.00001 par value;

787,754 shares authorized;

15,759 shares issued and

outstanding as of both March 31, 2026 and December 31, 2025

15,759 shares issued and outstanding as of both June

30, 2026 and December 31, 2025

Series C preferred stock, $ 0.00001 par value;

1,000 shares authorized;

0 shares issued and

outstanding as of both March 31, 2026 and December 31, 2025

0 shares issued and outstanding as of both June 30, 2026

and December 31, 2025

Series X preferred stock, $ 0.00001 par value;

9,211,246 shares authorized;

0 shares issued and

outstanding as of both March 31, 2026 and December 31, 2025

0 shares issued and outstanding as of both June 30,

2026 and December 31, 2025

Preferred stock

2 unchanged sentences

41,064,146 and 40,630,815 shares issued and outstanding as of

March 31, 2026 and December 31, 2025, respectively 1,015,000 and 1,015,000 shares unvested as of March 31, 2026 and December 31,

2025, respectively

June 30, 2026 and December 31, 2025, respectively 1,448,331 and 1,015,000 shares unvested as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

8 unchanged sentences

Consolidated Statements Of Operations

the Three Months Ended March 31, 2026 and 2025

Three Months Ended

the Three and Six Months Ended June 30, 2026 and 2025

Cost of sales

5 unchanged sentences

General and administrative

Research and development

Total operating expenses

and development

operating expenses

Operating loss

1 unchanged sentence

( 5,157,906 )

( 6,209,232 )

( 8,729,223 )

Non-operating income (expense):

Change in fair value of warrant liability

Change in fair value of derivative liability

Loss on conversion of note payable

Change in fair value of warrant

Change in fair value of derivative

Loss on conversion of note

Loss on disposition of subsidiaries

Interest income

Interest expense

( 1,324,277 )

Total non-operating expense

Benefit (provision) for income taxes

( 1,562,667 )

( 1,055,347 )

(provision) for income taxes

$ ( 2,822,371 )

$ ( 6,720,573 )

$ ( 6,224,635 )

$ ( 9,784,570 )

Net loss per common share

4 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

the Three and Six Months Ended June 30, 2026 and 2025

Stockholders’

at December 31, 2024

Balances at December

$ 118,111,007

$ ( 39,038,973 )

stock issued for services

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

line of commitment shares issued

of note payable into common stock

compensation expense

Common stock issued for services

Common stock issued for cash

pursuant to ELOC agreement, net of offering costs

Equity line of commitment shares

Conversion of note payable

into common stock

Stock-based compensation expense

( 3,063,997 )

at March 31, 2025

Balances at March 31, 2025

( 42,102,970 )

Common stock issued for services

Equity line of commitment shares

Stock-based compensation expense

( 6,720,573 )

at December 31, 2025

( 6,720,573 )

at June 30, 2025

$ 126,683,845

$ ( 48,823,543 )

Balances at December 31, 2025

$ 150,671,215

compensation expense

$ ( 80,551,237 )

Stock-based compensation expense

( 3,402,264 )

at March 31, 2026

( 3,402,264 )

Balances at March 31, 2026

( 83,953,501 )

shares issued for services

Stock-based compensation expense

( 2,822,371 )

at June 30, 2026

$ 150,876,988

$ ( 86,775,872 )

$ 150,876,988

$ ( 86,775,872 )

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

2 unchanged sentences

Consolidated Statements of Cash Flows

The Three Months Ended March 31, 2026 and 2025

Three Months Ended

The Six Months Ended June 30, 2026 and 2025

Six Months Ended

Cash flows from operating activities:

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Loss on conversion of note payable

Loss on disposition of subsidiaries

Stock-based compensation

6 unchanged sentences

Prepaid expenses and deposits

Other receivables

Deferred offering costs

Lease liability

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Proceeds from loan payable, related party

Proceeds from issuance of note payable, net of issuance costs

Gross proceeds from issuance of common stock

Repayment of development liability

Net cash (used in) provided by financing

Net change in cash

( 3,119,255 )

Cash at beginning of period

Cash at end of period

Net cash provided by financing activities

Net change in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Reconciliation of cash, cash equivalents and restricted cash

Beginning of period:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash at beginning of period

End of period:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash at end of period

Supplemental disclosure of cash flow information:

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Equity line of commitment shares issued as offering costs

Issuance of note receivable in exchange for other receivables

Original issue discount and transaction expenses withheld from note payable principal

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

1 – ORGANIZATION AND BASIS OF PRESENTATION

September 20, 2024, the Company changed its legal name from “TRxADE HEALTH, Inc.” to “Scienture Holdings,

Inc.” As of the date of these financial statements, the Company’s primary operating subsidiary is Scienture, LLC

(f/k/a Scienture, Inc.) (“ Scienture ”).

Scienture was acquired in July 2024.

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.

a New York based branded, specialty pharmaceutical research company which is engaged in the research and development of branded pharmaceutical

The intellectual property application process was initiated in November 2019 and the product development activities commenced

in January 2020.

Scienture also plans to foray into commercialization of innovative and branded pharmaceutical products in the US market.

Scienture’s assets in development are across therapeutics areas and indications and cater to different market segments.

mission is to identify, develop and bring to market innovative technology-based products to address unmet medical needs.

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

Disposition of Legacy Subsidiaries

Company also previously owned 100 % of Softell Inc.

September 20, 2024, in connection with the Company’s acquisition of Scienture, LLC (f/k/a Scienture, Inc.)

(“ Scienture ”), the Company changed its legal name from “TRxADE HEALTH, Inc.” to

“Scienture Holdings, Inc.” As of the date of these financial statements, the Company’s only operating subsidiary

is Scienture, a New York based branded, specialty pharmaceutical research company, which was acquired in July 2024.

late 2019, Scienture has engaged in the research and development of branded pharmaceutical products across therapeutics areas and

indications and cater to different market segments.

Scienture’s mission is to identify, develop and bring to market innovative

technology-based products to address unmet medical needs.

Its targeted portfolio consists of short term and long-term opportunities

with efficient development, regulatory, and go to market strategies.

Company also owns all outstanding equity interests of SCNX Holdings, LLC, which was formed in connection with the issuance of certain

secured promissory notes to Streeterville Capital, LLC.

See Note 9 – Debt for more information.

of Legacy Subsidiaries

Company previously owned all ownership interests of Softell Inc.

(f/k/a Trxade Inc.) (“Softell”), Integra Pharma Solutions, LLC (“IPS”),

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& IPS Entities

October 4, 2024, the Company and Softell entered into an Assignment and Assumption of Membership Interests, pursuant to which the Company transferred, and Softell accepted, 100 % of the membership interests of IPS.

IPS became a wholly-owned subsidiary of Softell.

October 4, 2024, the Company and Softell entered into an Assignment and Assumption of Membership Interests, 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.

April 8, 2025, the Company entered into a Membership Interest Purchase Agreement with Tollo Health, Inc.

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

Chief Operating Officer, each had a beneficial interest in Tollo as of June 30, 2025.

Chief Operating Officer, each had a beneficial interest in Tollo as of the date that Tollo acquired IPS.

In August 2025, Integral Health, including its

subsidiary IPS, were acquired by third parties.

Therefore, at March 31, 2026 and December 31, 2025, Integral Health and Tollo was no

longer considered a related party.

April 8, 2025, the Company also entered into a Stock Purchase Agreement with Tollo, pursuant to which

Tollo agreed to purchase and the Company agreed to sell all issued and outstanding shares of common stock of Softell.

Therefore, at June 30, 2026 and December 31, 2025, Integral Health and Tollo are no

longer considered related parties.

April 8, 2025, the Company also entered into a Stock Purchase Agreement with Tollo, pursuant to which Tollo agreed to purchase and the

Company agreed to sell all issued and outstanding shares of common stock of Softell.

Health Entities

April 8, 2025, the Company also entered into a Stock Purchase Agreement with Tollo, pursuant to which Tollo

agreed to purchase and the Company agreed to sell all issued and outstanding shares of common stock of Bonum Health, Inc.

April 8, 2025, the Company also entered into a Stock Purchase Agreement with Tollo, pursuant to which Tollo agreed to purchase and the

Company agreed to sell all issued and outstanding shares of common stock of Bonum Health, Inc.

November 2025, the Company dissolved Bonum Health, LLC.

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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.

Note 3 for further detail on the dispositions.

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

Significant estimates for the three

months ended March 31, 2026 and 2025 include the valuation of intangible assets, including goodwill, and gain (losses) on dispositions.

Significant estimates for the six

months ended June 30, 2026 and 2025 include the valuation of intangible assets, including goodwill, and gain (losses) on dispositions.

Value of Financial Instruments

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See Note 11 – Warrants for the significant unobservable inputs used in the valuation

and a roll-forward of the warrant liability for the three months ended March 31, 2026.

and a roll-forward of the warrant liability for the six months ended June 30, 2026.

and Cash Equivalents

Company’s cash equivalents include U.S.

Treasury Bills with original maturities of three months or less from the date of purchase.

These instruments are classified as held-to-maturity and are recorded at amortized cost, which includes the initial investment cost and

the accretion of any purchase discounts.

The Company recognizes interest income over the life of the Treasury Bills using the effective

interest method.

Due to the short-term nature of these investments, the carrying value approximates fair value, and no unrealized gains

or losses are recognized in the consolidated statements of operations or within accumulated other comprehensive income.

of June 30, 2026, cash and cash equivalents of $ 8,188,140 consisted of U.S.

Treasury Bills with an amortized cost of $ 5,980,048 , comprising

a $ 2,000,000 face value T-Bill maturing July 14, 2026 and a $ 4,000,000 face value T-Bill maturing August 13, 2026, both acquired on May

13, 2026, and cash on deposit of $ 2,207,937 .

As of December 31, 2025, cash and cash equivalents of $ 6,662,008 consisted of U.S.

Bills with an amortized cost of $ 5,479,786 , comprising a $ 1,500,000 face value T-Bill maturing January 15, 2026 and a $ 4,000,000 face

value T-Bill maturing February 12, 2026, and cash on deposit of $ 1,182,066 .

These instruments were purchased at a discount and are being

accreted to face value over their respective holding periods using the effective interest method.

Interest income accreted on these instruments

is reported within interest income in the consolidated statements of operations and was $ 39,251 for the six months ended June 30, 2026.

Concentration

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Deposits are insured to Federal Deposit Insurance Corporation

During the three months ended March 31, 2026, two customers accounted for 76.5 % of revenue and during the three months ended

March 31, 2025, no sales to customers represented greater than 10% of revenue.

During the three and six months ended June 30, 2026, two customers accounted for 83.64 % and 81.94 % of revenue, respectively,

and during the three and six months ended June 30, 2025, no sales to customers represented greater than 10% of revenue.

Receivable, net

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is not completed.

As of March 31, 2026, the Company has capitalized $ 47,384 in deferred offering costs.

Deferred offering costs were $ 47,384 as of March 31, 2026 and December 31, 2025, and $ 534,800 as of December 31,

During the three months ended March 31, 2025, the Company reclassified $ 534,800 of deferred offering costs to additional paid-in

capital upon the completion of equity offerings.

No such amounts were reclassified during the three months ended March 31, 2026.

Deferred offering costs were $ 0 as of June 30, 2026, $ 47,384 as of December 31, 2025, and $ 534,800 as of December 31,

During the six months ended June 30, 2025, the Company reclassified $ 1,587,001 of deferred offering costs to additional paid-in

capital upon the completion of equity offerings, and deferred offering costs were $ 554,586 as of June 30, 2025.

During the six months

ended June 30, 2026, the remaining $ 47,384 of deferred offering costs was written off to expense.

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

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

the year ended December 31, 2025, the Company performed its annual impairment assessment of goodwill and indefinite-lived intangible

assets and recognized aggregate impairment charges of $ 26,346,050 .

See Note 9 – Goodwill and Intangible Assets for a full description

of the impairment testing methodology, triggering events, valuation inputs, and results.

Intangible Assets

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

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amortization expense recognized from the commencement date through

March 31, 2026 was $ 907,692 .

June 30, 2026 was $ 1,361,539 .

Other three intangible assets are not amortized until commercialization.

8 unchanged sentences

the fair value less costs to sell.

the year ended December 31, 2025, the Company performed its annual impairment assessment of goodwill and indefinite-lived intangible

assets and recognized aggregate impairment charges of $ 26,346,050 .

See Note 9 – Goodwill and Intangible Assets for a full description

of the impairment testing methodology, triggering events, valuation inputs, and results.

of December 31, 2025, SCN-102 passed the ASC 360 undiscounted cash flow recoverability test, therefore, no impairment was recorded.

three other intangible assets failed their annual ASC 350 fair value tests, fair values determined via discounted cash flow analysis

were below carrying amounts, resulting in total impairment charges of $ 4,973,090 for the year ended December 31, 2025.

Company did not record an impairment charge for the three months ended March 31, 2026 and 2025.

See Note 8 – Goodwill and Intangible Assets for a full description of the impairment testing methodology and

results for the year ended December 31, 2025.

Company did not record an impairment charge for the three and six months ended June 30, 2026 and 2025.

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

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(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 March 31, 2026, we had 177,536 outstanding warrants and 19,899 stock options, each exercisable

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

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, 2026, we had 177,536

outstanding warrants and 19,005

stock options, each exercisable for shares of common stock, as well as 15,759

shares of Series B Preferred Stock outstanding and 1,448,331 unvested restricted shares of common stock.

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

1 unchanged sentence

Three Months Ended

Six Months Ended

$ ( 2,822,371 )

$ ( 6,720,573 )

$ ( 6,224,635 )

$ ( 9,784,570 )

Denominator for EPS – weighted average shares

Company’s provision for income taxes was $ 0 for the three months ended March 31, 2026 and 2025.

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.

Company’s provision for income taxes was $ 0 for the three and six months ended June 30, 2026 and 2025.

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.

Issued Accounting Pronouncements

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the circumstances.

2 – GOING CONCERN

2 – LIQUIDITY

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

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

of March 31, 2026, the Company had an accumulated deficit of $ 83,953,501 and cash and cash equivalents of $ 3,542,754 .

of March 31, 2026, the Company had cash and cash equivalents of $ 3,542,754 and current liabilities of approximately $ 2.8 million, resulting

in positive working capital of approximately $ 1.97 million.

Management believes that its existing cash on hand, combined with revenues

generated from the commercialization of ARBLI™ (SCN-102) and its planned financing activities, will be sufficient to fund the Company’s

operations and meet its obligations as they become due for at least twelve months from the date these financial statements are issued.

of June 30, 2026, the Company had an accumulated deficit of $ 86,775,872 , cash and cash equivalents of $ 8,188,140 and restricted cash

of $ 3,012,271 .

of June 30, 2026, the Company had cash and cash equivalents of $ 8,188,140 ,

restricted cash of $ 3,012,271

and current liabilities of approximately $ 3.0

million, resulting in positive working capital of approximately $ 6.2

Management believes that its existing cash on hand, combined with revenues generated from the commercialization of

ARBLI™ (SCN-102) and REZENOPY TM (SCN-110), and its planned financing activities, will be sufficient to fund the

Company’s operations and meet its obligations as they become due for at least twelve months from the date these financial

statements are issued.

In making this assessment, management considered the following:

(i) cash on hand of $ 3.5 million as of March 31, 2026, which management

believes is sufficient to fund current operating requirements over the next twelve months;

(ii) the Company’s ability to modulate

discretionary operating and development expenditures to align with available capital;

(iii) ongoing and planned commercialization of

ARBLI™ (SCN-102), which generated its initial revenues during the second half of 2025 and is expected to contribute increasing

revenues in 2026;

and (iv) management’s plans to access additional capital through equity or debt financing as needed to fund accelerated

pipeline development activities.

The Company’s ability to continue as a going concern is dependent upon the successful commercialization of

ARBLI™ (SCN-102) and its ability to raise additional capital as needed.

There can be no assurance that the Company’s operations

will generate positive cash flows, or that additional financing will be available on favorable terms, or at all.

If the Company is unable

to achieve planned commercial revenues or obtain additional financing, the Company may be required to delay, reduce, or eliminate certain

development programs or commercialization activities.

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern within one year after the date these condensed consolidated financial statements are issued.

The condensed consolidated

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

(i) cash on hand of $ 8.2

million as of June 30, 2026, together with $ 3.0

million of restricted cash, which management believes is sufficient to fund current operating requirements over the next twelve

(ii) the Company’s ability to modulate discretionary operating and development expenditures to align with available

(iii) ongoing sales of ARBLI™ (SCN-102), which generated its initial revenues during the second half of 2025 and is

expected to contribute increasing revenues in 2026 and sales from the launch of REZENOPY TM (SCN-110) in August 2026;

(iv) management’s plans to access additional capital through equity or debt financing as needed to fund accelerated pipeline

development activities.

The Company’s ability to continue as a going concern is dependent upon the successful

commercialization of ARBLI™ (SCN-102) and REZENOPY TM (SCN-110) and its ability to raise additional capital as

There can be no assurance that the Company’s operations will generate positive cash flows, or that additional

financing will be available on favorable terms, or at all.

If the Company is unable to achieve planned commercial revenues or obtain

additional financing, the Company may be required to delay, reduce, or eliminate certain development programs or commercialization

While these conditions initially indicated substantial doubt about the Company’s ability to continue as a going

concern, management believes that its plans described above alleviate that doubt for at least one year after the date these

condensed consolidated financial statements are issued.

3 – ACQUISITIONS AND DISPOSITIONS

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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.

was finalized during the one-year measurement period following the acquisition date, which concluded on July 25,

July 25, 2024, the parties consummated the mergers contemplated by the Scienture Merger Agreement (together, the “Scienture Merger”)

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operations in the accompanying consolidated statements of operations.

For the three months ended March 31, 2026 and 2025, the results

of the discontinued operations for the three months ended March 31, 2026 and 2025 was $ 0 :

For the three and six months ended June 30, 2026 and 2025, the

results of discontinued operations were $ 0 .

4- RELATED PARTY TRANSACTIONS

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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 $ 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 .

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

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

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

Therefore, as of December 31, 2025,

Integral Health and Tollo is no longer considered a related party.

As of December 31, 2025, the note receivable was outstanding and the

Company recognized $ 250,000 in interest income during the year ended December 31, 2025, which was reclassified from note receivable,

related party to note receivable on the consolidated balance sheet.

As of March 31, 2026, the note receivable was outstanding and the

Company recognized $ 93,750 in interest income during the three months ended March 31, 2026

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

Suren Ajjarapu, the Company’s former

Chief Executive Officer, and Prashant Patel, the Company’s former President and Chief Operating Officer, each had a beneficial

interest in Tollo as of June 30, 2025.

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

Therefore, as of December 31, 2025, and June 30, 2026, Integral Health and Tollo are no longer considered related parties.

As of December 31, 2025, the note receivable was outstanding and the Company recognized $ 250,000

in interest income during the year ended December 31, 2025, which was reclassified from note receivable, related party to note

receivable on the consolidated balance sheet.

As of June 30, 2026, the note receivable was outstanding and the Company recognized

$ 93,750 and $ 187,500

in interest income during the three and six months ended June 30, 2026, respectively.

As of June 30, 2026, accrued interest

receivable on the note was $ 437,500 .

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

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

Officer, each had a beneficial interest in Tollo as of June 30, 2025.

In August 2025, Integral Health, including its subsidiary IPS,

were acquired by third parties.

Therefore, at March 31, 2026 and December 31, 2025, Integral Health and Tollo was no longer considered

a related party.

5 – REVENUE RECOGNITION

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Rebates and Distribution Service Fees.

Fees and rebates paid to wholesale distributors and group purchasing organizations under contractual arrangements.

Fees and rebates paid to wholesale distributors and group purchasing organizations under

contractual arrangements.

Estimated based on contracted rates and expected sales volumes.

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Accrued gross-to-net liabilities are included within accrued liabilities on the consolidated balance sheets.

disaggregated by product for the three months ended March 31, 2026 and 2025 is as follows:

disaggregated by product for the three and six months ended June 30, 2026 and 2025 is as follows:

OF DISAGGREGATED BY PRODUCT

Three Months Ended

ARBLI™ (SCN-102, Losartan Potassium Oral Suspension)

Pharmaceutical product resale

Total revenues

Six Months Ended

ARBLI™ (SCN-102,

Losartan Potassium Oral Suspension)

Pharmaceutical

product resale

6 – NOTES RECEIVABLE – RELATED PARTY

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

As of March 31, 2026 and December 31, 2025,

As of June 30, 2026 and December 31, 2025,

the outstanding balance of the Wood Sage Note was $ 0 .

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including its subsidiary IPS, were acquired by third parties.

Therefore, at March 31, 2026 and December 31, 2025, Integral Health and

Therefore, at June 30, 2026 and December 31, 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

1 unchanged sentence

7 – INVENTORY

value is determined using the weighted average cost method and is stated at the lower of cost or net realizable value.

As of March 31,

value is determined using the first-in, first-out method and is stated at the lower of cost or net realizable value.

As of June 30,

2026 and December 31, 2025, inventory was comprised of the following:

June 30, 2026

December 31, 2025

Finished goods

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Product Candidate

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.

received regulatory approval in March 2025.Product commercialization began in the third quarter of 2025.

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

expects SCN-106 to achieve regulatory approval in 2029, with product commercialization projected to begin in 2029.

expects SCN-107 to achieve regulatory approval in 2029, with product commercialization projected to begin in 2030.

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

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of the product technologies.

fair value of each product technology was determined using the MPEEM, an income approach

that isolates the cash flows attributable solely to the subject intangible asset by projecting revenues and operating costs, deducting

contributory asset charges (working capital at 4.0%, property and equipment at 12.9%), and discounting the resulting excess earnings

to present value using risk-adjusted discount rates.

fair value of each product technology was determined using the MPEEM, an income approach that isolates the cash flows attributable solely

to the subject intangible asset by projecting revenues and operating costs, deducting contributory asset charges (working capital at

4.0%, property and equipment at 12.9%), and discounting the resulting excess earnings to present value using risk-adjusted discount rates.

A tax amortization benefit is included in each fair value indication.

reflect each asset’s market size, projected penetration, and net pricing assumptions, with a long-term growth rate of 4.8% applied

at terminal value, benchmarked to long-term U.S.

nominal GDP expectations.

Projections reflect each asset’s market size, projected penetration,

and net pricing assumptions, with a long-term growth rate of 4.8% applied at terminal value, benchmarked to long-term U.S.

expectations.

Key valuation inputs included:

a risk-free rate of 4.79% (20-year

a risk-free rate of 4.79% (20-year U.S.

Treasury yield as of December 31, 2025);

a market rate of return of 13.0% (10-year CAGR of S&P 500, 2016–2025);

beta of 0.98 (Damodaran pharmaceutical industry data);

rate of return of 13.0% (10-year CAGR of S&P 500, 2016–2025);

an unlevered beta of 0.98 (Damodaran pharmaceutical industry

and an effective tax rate of 26.7% (combined U.S.

federal rate of 21% and New

York state rate of 7.3%) .

federal rate of 21% and New York state rate of 7.3%).

Impairment – ASC 350

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within impairment loss in the consolidated statements of operations.

As of March 31, 2026 and December 31, 2025, no goodwill remains

on the consolidated balance sheet.

As of June 30, 2026 and December 31, 2025, no goodwill remains on

the consolidated balance sheet.

Assets – Classification and Annual Assessment

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Amortization expense recognized from commercialization

through December 31, 2025 was $ 453,846 and $ 453,846 during the three months ended March 31, 2026, resulting in a carrying amount of $ 22,692,308

as of March 31, 2026.

through December 31, 2025 was $ 453,846 , and $ 453,846 and $ 907,693 during the three and six months ended June 30, 2026, respectively,

resulting in a carrying amount of $ 22,238,461 as of June 30, 2026.

to the presence of impairment indicators as of December 31, 2025, the Company evaluated SCN-102 for recoverability under ASC 360-10-35.

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was determined to be recoverable and no impairment loss was recognized for this asset as of December 31, 2025.

following table summarizes the carrying amounts of intangible assets as of March 31, 2026 and December 31, 2025 (in thousands):

following table summarizes the carrying amounts of intangible assets as of June 30, 2026 and December 31, 2025 (in thousands):

OF INTANGIBLE ASSETS

March 31, 2026

SCN-102 – finite-lived (net of $454 amortization each in 2026 and 2025)

June 30, 2026

SCN-102 – finite-lived (net of amortization of $908 for the six months ended June 30, 2026 and nil for the six months ended June 30, 2025)

SCN-104 – indefinite-lived IPR&D

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impairment charges recognized on SCN-104, SCN-106, and SCN-107, and $ 453,846 of amortization expense recognized during the year ended

December 31, 2025 and $ 453,846 during the three months ended March 31, 2026, on SCN-102 following its commercialization.

December 31, 2025 and $ 907,693 during the six months ended June 30, 2026, on SCN-102 following its commercialization.

Estimated future

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three IPR&D assets will be reclassified from indefinite-lived to finite-lived and commence amortization upon commercialization:

is expected to launch in 2028, SCN-106 in 2029, and SCN-107 in 2029 or 2030.

Streeterville

October 14, 2025, the Company entered into a note purchase agreement with Streeterville Capital, LLC (“Streeterville”), providing

for the issuance of a senior secured promissory note in the aggregate principal amount of $ 3,911,111.11 (the “Streeterville Note”).

The Streeterville Note carried an original issue discount of $ 391,111.11 and an interest rate of 9 % per annum.

After deducting the original

issue discount and $ 20,000 in transaction costs, the Company received net proceeds of $ 3,500,000 , which were utilized to repay the outstanding

balance of the Scienture Convertible Debt and for general corporate purposes.

is expected to launch in 2028, SCN-106 in 2029, and SCN-107 in 2030.

2025 Streeterville Note

October 14, 2025, the Company entered into a note purchase agreement with Streeterville Capital, LLC (“ Streeterville ”),

providing for the issuance of a senior secured promissory note in the aggregate principal amount of $ 3,911,111.11

(the “ 2025 Streeterville Note ”).

The 2025 Streeterville Note carried an original issue discount of $ 391,111.11

and an interest rate of 9 %

After deducting the original issue discount and $ 20,000

in transaction costs, the Company received net proceeds of

$ 3,500,000 ,

which were utilized to repay the outstanding balance of the Scienture convertible debt and for general corporate purposes.

the year ended December 31, 2025, the 2025 Streeterville Note was fully repaid.

In connection with this repayment, the Company recognized

interest expense of $ 13,981 representing accrued interest through the date of payoff.

In connection with this repayment, the Company

recognized interest expense of $ 13,981

representing accrued interest through the date of payoff.

Additionally, the Company fully amortized the $ 391,111.11

original issue discount and the $ 20,000 in transaction costs, which were recognized as interest expense during the period.

31, 2026 and December 31, 2025, the Note had no outstanding balance, and there was no remaining unamortized debt discount or transaction

costs associated with this obligation.

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

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 (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 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.

debt discount recognized in connection with the note was $ 117,332 , with $ 42,755 amortized through December 31, 2024, and an additional

$ 28,931 amortized during the year ended December 31, 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 consolidated statements of operations.

original issue discount and the $ 20,000

in transaction costs, which were recognized as interest expense during the period.

As of June 30, 2026, and December 31, 2025, the

2025 Streeterville Note had no outstanding balance, and there was no remaining unamortized debt discount or transaction costs

associated with this obligation.

2026 Streeterville Notes

April 27, 2026, the Company issued to Streeterville a secured promissory note in the original

principal amount of $ 8,420,000 , including a $ 400,000 original issue discount (the “A-1 Note”), and a secured promissory note

in the original principal amount of $ 3,000,000 (the “B Note”).

The A-1 Note bears interest at 9 % per annum, the B Note bears

interest at 5 % per annum, and both notes mature on October 27, 2027 .

The Lender funded $ 8,000,000 in cash, of which $ 410,000 was paid

as a placement agent fee, and deposited $ 3,000,000 into a controlled deposit account held by SCNX Holdings, LLC, a newly formed wholly-owned

subsidiary of the Company (“SCNX Sub”).

Beginning December 27, 2026, the Lender may redeem up to $175,000 of A-1 Note principal

per calendar month, plus additional amounts based on trading volume in certain circumstances.

discount and issuance costs of $ 830,000 were recognized on the A-1 Note at issuance, comprising the $ 400,000 original issue discount,

$ 20,000 of transaction expenses and the $ 410,000 placement agent fee, and are being amortized to interest expense on a straight-line

basis over the 18-month term.

No discount or issuance costs were recognized on the B Note.

During each of the three and six months ended

June 30, 2026, the Company amortized $ 96,935 of debt discount and recognized stated interest expense of $ 132,875 on the A-1 Note and

$ 26,301 on the B Note.

As of June 30, 2026, unamortized debt discount was $ 733,066 , note payable, net of debt discount, was $ 1,118,349

current and $ 9,568,586 non-current based on the Lender’s monthly redemption rights, and accrued interest payable was $ 159,176 .

$ 3,000,000 held in the SCNX Sub deposit account is restricted until maturity of the B Note and is presented as non-current restricted

cash on the consolidated balance sheet.

Restricted cash was $ 3,012,271 as of June 30, 2026, and the Company recognized $ 13,200 of interest

income on the account during each of the three and six months ended June 30, 2026.

The notes are secured by a first-priority security

interest in substantially all assets of the Company and Scienture, LLC, together with guaranties, a pledge of the Company’s membership

interests in SCNX Sub and control of the deposit account, and contain customary covenants, trigger events and events of default.

an event of default, the outstanding balance becomes immediately due and payable and default interest accrues at the lesser of 18 % per

annum or the maximum rate permitted by law.

10 – STOCKHOLDERS’ EQUITY

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approval of such conversion.

of March 31, 2026 and December 31, 2025, there were 15,759 issued and outstanding shares of Series B Preferred Stock.

of June 30, 2026 and December 31, 2025, there were 15,759 issued and outstanding shares of Series B Preferred Stock.

of Series X Preferred Stock

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of the Series X Preferred Stock, a then new class of preferred stock.

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.

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

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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 December 31, 2025.

Global Ventures Stock Purchase Agreement

October 4, 2023, the Company entered into a Securities Purchase Agreement the “Hudson SPA”) with Hudson Global Ventures,

LLC (“Hudson”).

Under the terms of the Hudson SPA, the Company agreed to sell, and Hudson agreed to purchase, Two Hundred

Ninety ( 290 ) shares of Series C Preferred Stock (the “Purchased Shares”) at a price of $ 1,000 per share and a Warrant to

purchase up to 41,193 shares of Common Stock.

Additionally, pursuant to the Agreement, 40,000 shares of Common Stock were issued to Hudson

upon closing for a commitment fee.

The Company received $ 250,000 in exchange for the Purchased Shares, Common Stock, and Warrants, net

of issuance costs.

July 12, 2024, the Company converted 290 shares of Series C Preferred Stock into 52,158 shares of common stock at the election of the

Company did not issue any shares of common stock during the three-months ended March 31, 2026.

As such, there were no issued and outstanding shares of Series X Preferred Stock as of June 30, 2026, and December 31, 2025.

Other than the issuance of 433,331 restricted shares of common stock for services described below, the Company did

not issue any shares of common stock during the six months ended June 30, 2026.

During the year ended December 31, 2025,

2025, the Company issued an aggregate of 7,103,614

shares of common stock for net proceeds of $ 9,008,199 .

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 investors.

Direct Offering

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 with several institutional 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

September 19, 2025, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with Maxim Group LLC

(“Maxim”), acting as the sole sales agent for the offer and sale of the Company’s common stock, par value $ 0.00001

per share, through an “at-the-market” offering program (the “ATM Program”).

These shares are issued pursuant

to the Shelf Registration Statement on Form S-3 (File No.

333-289198), which was filed with the Commission on

August 1, 2025, and declared effective on August 8, 2025.

Under the terms of the ATM Agreement, the Company may sell shares having an

aggregate gross sales price of up to $ 18,792,009 , subject to a commission of 3.0 % of the gross sales price payable to Maxim, along with

the reimbursement of certain specified expenses.

the year ended December 31, 2025, the Company issued and sold an aggregate of 15,722,659 shares of common stock under the ATM Program.

These transactions resulted in aggregate net proceeds to the Company of $ 14,871,106 , after deducting the applicable sales commissions

and offering expenses.

This activity represents a significant increase from the 100 shares of common stock previously issued under the

program as of December 31, 2025.

The Company did not issue or sell shares under the ATM Program during the three months ended March 31, 2026.

of March 31, 2026 and December 31, 2025, the Company had 1,200,898 restricted shares of common stock outstanding under the option plans.

As of March 31, 2026 and December 31, 2025, 185,898 shares were vested.

The Company recorded stock-based compensation expense of $ 102,320

in the consolidated statements of operations for the three months ended March 31, 2026.

Unrecognized stock compensation outstanding on

these grants was $ 636,673 as of March 31, 2026.

the Company issued an aggregate of 7,103,614 shares of common stock for net proceeds of $ 9,008,199 .

of June 30, 2026 and December 31, 2025, the Company had 1,634,229

and 1,200,898 restricted shares of common stock outstanding, respectively.

As of June 30, 2026 and December 31, 2025, 185,898

shares were vested.

During the three months ended June 30, 2026, the Company issued 433,331 restricted shares of common stock to

certain executive officers of the Company and Scienture, LLC for services rendered, with an aggregate grant date fair value of

These shares vest in June 2029 ( 333,332 shares) and June 2030 ( 99,999 shares), and the related stock-based compensation

expense recognized during the three and six months ended June 30, 2026 was nominal.

The Company recorded stock-based compensation

expense of $ 103,457

and $ 205,777

in the consolidated statements of operations for the three and six months ended June 30, 2026, respectively.

Unrecognized stock

compensation outstanding on these grants was $ 706,549

as of June 30, 2026.

Compensation Awards

independent member of the Company’s board of directors 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 of directors), 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 of directors 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.

equal to $ 55,000 in value on April 1st of each year (or such date thereafter as the awards are approved by the board of directors), 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 of directors 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.

11 – WARRANTS

connection with a note (see Note 9 – Debt), 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.

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.

Warrant liability

of March 31, 2026, the Company remeasured the fair value of warrants outstanding at $ 0 .

connection with a note (see Note 9 – Debt), in August 2024 the Company issued 76,923 warrants to purchase common stock.

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

of June 30, 2026, the Company remeasured the fair value of warrants outstanding at $ 0 .

In connection with the remeasurement of warrants,

a gain of $ 10,910 was recognized during the three months ended March 31, 2026, as the change in fair value of warrant liability.

no gain or loss was recognized during the three months ended June 30, 2026 and a gain of $ 10,910 was recognized during the six months

ended June 30, 2026, as the change in fair value of warrant liability.

Company classifies its outstanding warrant liability within Level 3 of the fair value hierarchy, as the fair value is determined using

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The following assumptions were used to estimate the fair value of the

warrant liability as of March 31, 2026:

warrant liability as of June 30, 2026:

OF FAIR VALUE OF WARRANT LIABILITY

Three Months Ended

Six Months Ended

June 30, 2026

Expected stock price

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Expected dividend yield

in the fair value of the warrant liability, which is measured on a recurring basis using Level 3 inputs, for the three months ended March

in the fair value of the warrant liability, which is measured on a recurring basis using Level 3 inputs, for the six months ended June

30, 2026, were as follows:

OF CHANGE IN WARRANT LIABILITY

Warrant Liability

Outstanding as of December 31, 2025

Change in fair value

Outstanding as of March 31, 2026

Company’s outstanding and exercisable warrants, as of March 31, 2026, are presented below:

Outstanding as of June 30, 2026

Company’s outstanding and exercisable warrants, as of June 30, 2026, are presented below:

OF OUTSTANDING AND EXERCISABLE WARRANTS

Number Outstanding

Weighted Average Exercise Price

Contractual Life

Weighted Average

Exercise Price

Contractual Life In Years

Intrinsic Value

Warrants outstanding as of December 31, 2025

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Warrants exercised

Warrants outstanding as of March 31, 2026

Warrants exercisable as of March 31, 2026

Warrants outstanding as of June 30, 2026

Warrants exercisable as of June 30, 2026

Plan allows for and the Company maintains stock option award agreements under which certain employees may be awarded option grants based

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Stock as such common stock existed on July 24, 2024.

compensation cost related to stock options granted was $ 0 and $ 437 for the three months ended March 31, 2026, and 2025, respectively.

compensation cost related to stock options granted was $ 0 for both the three and six months ended June 30, 2026, and $ 162,438 and $ 162,874

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

September 17, 2025, the Company cancelled 2,000,000 stock options and granted the related option holders 2,000,000 shares of common stock.

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Total stock-based compensation cost as a result of this transaction was $ 1,512,995 .

following table represents stock option activity for the three-month period ended March 31, 2026:

following table represents stock option activity for the six-month period ended June 30, 2026:

OF STOCK OPTION ACTIVITY

Exercise Price

Life in Years

Number Outstanding

Weighted-Average Exercise Price

Weighted-Average Contractual Life in Years

Intrinsic Value

Options outstanding as of December 31, 2025

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Options exercised

Options outstanding as of March 31, 2026

Options exercisable as of March 31, 2026

Options outstanding as of June 30, 2026

Options exercisable as of June 30, 2026

13 – COMMITMENTS AND CONTINGENCIES

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and $ 89,848 of accrued interest.

During the three months ended March 31, 2026, the Company made aggregate payments of $ 217,534 , consisting

During the six months ended June 30, 2026, the Company made aggregate payments of $ 431,209 , consisting

of $ 400,000 of principal and $ 31,209 of accrued interest.

As of March 31, 2026, the remaining outstanding balance of $ 685,000 is presented

on the consolidated balance sheet as classified as current (Development agreement liability – current portion).

As of June 30, 2026, the remaining outstanding balance of $ 485,000 is presented

as a current liability on the consolidated balance sheet under Development agreement liability – current portion.

OF DEVELOPMENT AGREEMENT LIABILITY

Development Agreement Liability

March 31, 2026

June 30, 2026

December 31, 2025

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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 March 31, 2026.

recorded in the consolidated balance sheet as of June 30, 2026.

balance sheet information related to leases are as follows:

OF BALANCE SHEET INFORMATION RELATED TO LEASES

June 30, 2026

December 31, 2025

Weighted-average remaining lease term (in years)

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Long-term lease obligations

the three months ended March 31, 2026, and 2025, total operating lease expense was $ 6,772 and $ 36,402 , respectively, which is included

the three months ended June 30, 2026, and 2025, total operating lease expense was $ 6,967 and $ 22,795 , respectively, which is included

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

the six months ended June 30, 2026, and 2025, total operating lease expense was $ 13,739 and $ 59,197 , respectively, which is included

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

15 – SEGMENT REPORTING

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all reporting segments in one geographical area (the United States).

Company’s chief operating decision-makers are its co-Chief Executive Officers (the “ CODM ”), 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 CODM for any planning, strategy and key decision-making regarding operations.

Accordingly, as

of March 31, 2026, the Company has a single reportable segment and operating segment structure.

The Company operates entirely within

the United States.

Company’s chief operating decision-makers are its co-Chief Executive Officers (together, the

“ CODM ”), 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 CODM for any planning, strategy and

key decision-making regarding operations.

Accordingly, as of June 30, 2026, the Company has a single reportable segment and

operating segment structure.

The Company operates entirely within the United States.

key measures of segment profit or loss reviewed by the CODM are total revenues, gross profit, total operating expenses (including research

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research and development expenses (SCN-102:

$ 0 for the three months ended March 31, 2026);

for the three months ended June 30, 2026, and SCN-102:

for the six months ended June 30, 2026);

wage and salary expense of $ 411,411

professional fees of $ 932,552 ;

accounting and legal expense of $ 326,178 .

Other segment items not separately disclosed include technology expense of $ 15,763 , general

and administrative expense (including stock-based compensation) of $ 1,074,865 , and depreciation and amortization of $ 454,346 .

following table presents key financial information for the Company’s 1 single

reportable segment for the three months ended March 31, 2026 and 2025:

and $ 831,419 ;

professional fees of $ 963,752 and

$ 1,896,304 ;

and accounting and legal expense of $ 117,815

and $ 443,993 ,

in each case for the three and six months ended June 30, 2026, respectively.

Other segment items not separately disclosed include technology

expense of $ 7,139 and

general and administrative expense (including stock-based compensation) of $ 368,790

and $ 1,443,654 ,

and depreciation and amortization of $ 461,571

and $ 929,585 ,

in each case for the three and six months ended June 30, 2026, respectively.

following table presents key financial information for the Company’s single reportable segment for the three and six months ended

June 30, 2026 and 2025:

OF SEGMENTAL FINANCIAL INFORMATION

Three Months Ended

Six Months Ended

Cost of sales

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( 8,729,223 )

( 2,822,371 )

( 6,720,573 )

( 6,224,635 )

( 9,784,570 )

Total assets (at period end)

16 – SUBSEQUENT EVENTS

Streeterville

Capital Secured Note Financing

April 27, 2026, the Company entered into and closed a Note Purchase Agreement (the “Streeterville Purchase Agreement”)

with Streeterville Capital, LLC (the “Lender”) pursuant to which the Company issued two secured promissory notes:

Secured Promissory Note A-1 in the original principal amount of $ 8.42

million (the “A-1 Note”), which carries an original issue discount of $ 400,000 ,

and (ii) a Secured Promissory Note B in the original principal amount of $ 3.0

million (the “B Note”).

The Company also agreed to reimburse $ 20,000

of Streeterville’s transaction costs.

Maxim Group LLC acted as placement agent.

closing, Streeterville funded $ 8.0

million in cash directly to the Company and deposited an additional $ 3.0

million into a deposit account at Lakeside Bank held by SCNX Holdings, LLC, a newly formed Utah wholly-owned subsidiary of the

Company (“SCNX Sub”), subject to a Deposit Account Control Agreement among SCNX Sub, Streeterville, and Lakeside Bank.

Company intends to use the net proceeds for working capital, commercialization expenses, portfolio and product development expenses,

and other general corporate purposes.

A-1 Note bears interest at 9 % per annum, and the B Note bears interest at 5 % per annum;

both notes mature 18 months from issuance.

note may be prepaid in whole or in part at any time, subject to a 115 % prepayment premium if prepayment is made in connection with third-party

eight months after closing, the Lender may redeem (i) up to $175,000 per calendar month and (ii) up to 10% of the daily dollar trading

volume of the Company’s common stock when the stock trades more than 20% above the “Minimum Price” as defined under

Nasdaq Rule 5635(d), with redemption amounts payable in cash within four trading days of notice.

time the outstanding balance of the A-1 Note is reduced by $ 1.0 million, the Company has the right to exchange $ 1.0 million of the B

Note for a new note on substantially the same terms as the A-1 Note pursuant to Section 3(a)(9) of the Securities Act of 1933.

notes contain customary “Major Trigger Events” and “Minor Trigger Events,” including non-payment, insolvency,

bankruptcy, covenant breach, loss of DWAC eligibility, unauthorized reverse stock splits, and unsatisfied money judgments in excess of

Upon the occurrence of a trigger event, Streeterville may increase the outstanding balance by 15% per Major Trigger Event or 5%

per Minor Trigger Event, subject to an aggregate cap of 25%.

Uncured trigger events become Events of Default, in which case the outstanding

balance becomes immediately due and payable and default interest accrues at the lesser of 18 % per annum or the maximum rate permitted

Company’s obligations under the Streeterville Purchase Agreement are secured by (i) the Deposit Account Control Agreement,

(ii) a guaranty from Scienture, LLC and SCNX Sub, (iii) security agreements granting Streeterville a first-priority security

interest in substantially all assets of the Company and Scienture, LLC, (iv) an intellectual property security agreement covering

Scienture, LLC’s intellectual property, and (v) a pledge by the Company of all of its membership interests in SCNX Sub.

Streeterville Purchase Agreement contains affirmative and negative covenants, including requirements to maintain SEC reporting

status and national exchange listing, restrictions on additional liens, restrictions on Restricted Issuances (as defined in the

Purchase Agreement), and limitations on subsidiary indebtedness and equity issuances.

Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date these condensed consolidated

financial statements were issued and determined that there have been no events or transactions requiring recognition or disclosure in

these condensed consolidated financial statements.

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