What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-26 compared with 2024-04-22 · 1269 added, 1070 removed, 367 unchanged (86% of the section changed)

STATEMENTS AND SUPPLEMENTAL DATA

OF CONTENTS TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (Firm ID:

Report of the Independent Registered Public Accounting Firm (MaloneBailey,

LLP, Houston, Texas, Firm ID:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

of TRxADE HEALTH Inc.

Stockholders of Scienture Holdings, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of TRxADE Health, Inc.

(the Company) as of December 31, 2023, and the related

consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively

referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended then ended,

in conformity with accounting principles generally accepted in the United States of America.

have audited the accompanying consolidated balance sheet of Scienture Holdings, Inc.

(the Company) as of December 31, 2024 and 2023,

and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years

then ended, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of

its operations and its cash flows for the each of the years ended then ended, in conformity with accounting principles generally

accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

28 unchanged sentences

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

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,

providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

value of acquired intangible assets

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

combination - Fair value of acquired intangible assets

of the matter

discussed in Note 1 and Note 3 to the consolidated financial statements, on July 31, 2023, the Company acquired Superlatus, Inc.

discussed in Note 1 and Note 3 to the consolidated financial statements, on July 25, 2024, the Company acquired Scienture, Inc.

transaction accounted for as a business combination.

2 unchanged sentences

The acquisition-date fair value of the acquired technology was $76.4 million.

identified the evaluation of the acquisition-date fair value of the acquired technology as a critical audit matter.

A high degree of

subjective auditor judgment was required to evaluate the key assumptions within the discounted cash flows model used to estimate the

acquisition-date fair value of the acquired technology, specifically the revenue growth rate, margin, and discount rate.

There was limited

observable market information related to these assumptions and the estimated acquisition-date fair value of the acquired technology was

sensitive to minor changes in such assumptions.

identified the determination of the fair values of the identifiable intangible assets as a critical audit matter.

The Company’s

estimation of the acquisition date fair values of certain identifiable intangible assets is complex, requires management’s judgment

and involves the use of significant estimates and assumptions, including selection of the appropriate valuation methodology, revenue

growth rates, forecasted expenses, royalty rates, and discount rates.

Auditing these elements involved especially challenging and subjective

auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized

skill or knowledge needed.

We Addressed the Matter in our Audit

following are the primary procedures we performed to address this critical audit matter:

evaluated the Company’s revenue growth rate and margin assumptions by comparing them to the pre-acquisition budget and the

Company’s historical financial results.

evaluated the discount rate used by comparing it to a discount rate that was developed using publicly available market data for comparable

compared the revenue growth rate, margin, to those of comparable entities

validated the mathematical accuracy of the management’s calculations.

of the Matter

reflected in the Company’s consolidated financial statements at December 31, 2023, the Company impaired all goodwill as of December

As disclosed in Notes 1 to the consolidated financial statements, goodwill is tested for impairment at least

annually or more frequently if indicators of impairment require the performance of an interim impairment assessment.

As a result of these

assessments, management concluded that there was an impairment to goodwill for the year ended December 31, 2023, in the amount of $5.1

management’s impairment tests of goodwill is complex and highly judgmental due to the significant measurement uncertainty in determining

the fair values of the reporting units.

In particular, the fair value estimates of the reporting units were sensitive to changes in significant

assumptions such as discount rates, revenue growth rates, operating margins, estimated spending on capital expenditures, terminal growth

rates, and comparable company specific information.

These assumptions are affected by current and expected future market or economic

We Addressed the Matter in our Audit

audit procedures related to the selection of the discount rates used and forecasts of future net sales, operating margins, operating

expenses, and other market and economic data of the reporting units, involved:

an understanding of the Company’s process and related controls to evaluate goodwill for impairment.

the reasonableness of managements forecasts of future net sales, operating margins, and operating expenses by comparing the forecasts

to historical results, marketing plans relevant economic factors, and other comparable company and industry information.

We have served as the Company’s auditor since 2023

San Diego, California

April 22, 2024

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

on the Financial Statements

have audited the accompanying consolidated balance sheet of TRxADE HEALTH, INC.

(the “Company”) as of December 31, 2022,

and the related statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then

ended, in conformity with accounting principles generally accepted in the United States of America.

Concern Matter

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

As discussed in Note

2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises

substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described

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

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

MaloneBailey, LLP

www.malonebailey.com

have served as the Company’s auditor from 2013 to 2023.

the reasonableness of projected revenue growth rates and forecasted expenses through:

evaluating historical performance of the acquired entity, and (ii) assessing financial projections

against market trends, industry metrics and peer-group/guideline companies.

personnel with specialized knowledge and skill with valuation to assist in:

(i) assessing

the reasonableness of royalty rates and discount rates incorporated into the various valuation

models, and (ii) assessing the appropriateness of various valuation models utilized by management

to determine the fair values of the intangible assets.

have served as the Company’s auditor since 2023

Diego, California

March 26, 2025

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Balance Sheets

1 unchanged sentence

Current assets:

Accounts receivable, net

Prepaid assets

Notes receivable

Accounts receivable,

Prepaid expenses

Notes receivable - related

Other receivables

Current assets of discontinued operations

Deferred offering costs

assets of discontinued operations

Total current assets

Property, plant and equipment, net

Intangible assets and capitalized software, net

Security deposits

Intangible assets, net

Operating lease right-of-use assets

Noncurrent assets of discontinued operations

Liabilities and Shareholders’ Equity

Deferred tax asset

Noncurrent assets of discontinued

$ 104,853,805

LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

Current liabilities:

2 unchanged sentences

Other current liabilities

Loan payable, related party

Convertible note, net of

debt discount - current portion

Contingent funding liabilities

Lease liabilities – current portion

Notes payable – current portion

Operating lease liability - current

Warrant liability

Purchase price payable

Current liabilities of discontinued operations

liabilities of discontinued operations

Total current liabilities

Long Term Liabilities

Lease liabilities – net of current portion

Notes payable

Total Liabilities

Stockholders’ Equity

Convertible notes, net of debt discount

Derivative liability

Operating lease liability - net of current portion

Development agreement liability

Deferred tax liability

Noncurrent liabilities

of discontinued operations

Commitments and contingencies (Note 15)

Stockholders’ equity (deficit):

Series A preferred stock, $ 0.00001 par value;

9,211,246 shares authorized;

none issued and outstanding as of December 31, 2023 and December 31, 2022

0 and 9,211,246 shares authorized;

0 shares issued and outstanding as of December 31, 2024 and 2023, all respectively

Series B preferred stock, $ 0.00001 par value;

787,754 shares authorized;

15,759 outstanding as of December 31, 2023, and none as December 31, 2022

15,759 shares issued and outstanding as of both December 31, 2024 and 2023

Series C preferred stock, $ 0.00001 par value;

1,000 shares authorized;

290 issued and outstanding as of December 31, 2023, and none as of December 31, 2022

0 and 290 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Series X preferred stock, $ 0.00001 par value;

9,211,246 shares authorized;

0 and 0 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Preferred stock, value

1 unchanged sentence

shares authorized;

905,008 , and 626,247 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

8,750,582 and 905,008 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital

Retained deficit

Accumulated deficit

( 39,038,973 )

( 33,245,940 )

Total TRxADE Health, Inc stockholders’ equity

Non-controlling interest in subsidiary

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

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

stockholders’ equity

liabilities and stockholders’ equity

$ 104,853,805

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Statements Of Operations

Ended December 31, 2024 and 2023

Years Ended December 31,

Cost of sales

Operating expenses:

Loss on inventory investment

Wage and salary expense

3 unchanged sentences

General and administrative

Total operating expenses

Research and development

operating expenses

Operating loss

1 unchanged sentence

( 4,396,451 )

Nonoperating Income (Expense)

Change in fair value of warrant liability

Non-operating income (expense):

Change in fair value of

warrant liability

Change in fair value of

derivative liability

Impairment of investment

( 2,500,000 )

Interest income

Goodwill impairment

Loss on disposal of asset

( 2,798,968 )

Gain on disposal of asset

Interest expense

( 1,335,631 )

Total nonoperating income (expense)

( 1,143,223 )

Net loss from continuing operations

Total non-operating expense

( 4,077,861 )

( 4,086,413 )

Net loss on discontinued operations

Net loss from continuing operations

( 18,778,876 )

( 8,482,864 )

Benefit / (provision)

for income taxes

Net loss from continuing operations, net of tax

( 18,244,480 )

( 8,482,864 )

Net loss attributable to TRxADE Health, Inc.

Net income (loss) from

discontinued operations, net of tax

( 9,360,710 )

Net income (loss)

$ ( 17,843,574 )

Net loss attributable to non-controlling interests

Net loss per common share from continuing operations

Net loss per common share from discontinued operations

Net loss attributable to common stockholders

Net income (loss) per common share from discontinued

Net income (loss) per common share

Weighted average common shares outstanding

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

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Statements of Changes in Stockholders’ Equity

Ended December 31, 2023 and 2022

Preferred Stock

Series C Preferred

Non-controlling

Interest in Subsidiary

Stockholders’

Balance at December 31, 2021

at December 31, 2022

$ ( 19,719,536 )

Capital Contributions

Capital Distribution

Common stock issued for services

Common stock issued for placement, net issuance costs

Warrants exercised for cash

$ ( 420,269 )

stock issued for services

exercised for cash

Options expense

split rounding adjustment

issued pursuant to merger agreement

issued pursuant to securities purchase

( 17,843,574 )

Balance at December 31, 2022

at December 31, 2023

( 33,245,940 )

stock issued for services

of Series C preferred stock into common stock

of shares pursuant to Merger

of Series X preferred stock into common stock

( 6,826,753 )

line of commitment shares issued

of common shares in connection with convertible note

issued with convertible note

exercised for common shares

exercised for cash

dividends paid ($ 8 per share)

( 12,671,072 )

Common stock issued for services

Warrants exercised for cash

Options expense

Reverse split rounding adjustment

Disposition of assets

Shares issued pursuant to merger agreement

Shares issued pursuant to securities purchase agreement

( 12,671,072 )

dividends paid ($ 1.50 per share)

( 2,187,759 )

Balance at December 31, 2023

( 2,187,759 )

income (loss)

at December 31, 2024

$ 118,111,007

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

$ ( 39,038,973 )

$ 118,111,007

$ ( 39,038,973 )

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Statements of Cash Flows

Ended December 31, 2024 and 2023

Cash flows from operating activities:

Cash flows from operating

Net loss from continuing operations

$ ( 18,778,876 )

$ ( 8,482,864 )

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

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation expense

Change in fair value of

warrant liability

Change in fair value of

derivative liability

Options expense

Common stock issued for services

Bad debt expense

Loss on write-off of intangible asset

Loss on inventory investment

Common stock issued for

Impairment of investment

Amortization of debt discount

Amortization of right-of-use

Amortization of intangible

Goodwill impairment

Loss on inventory investments

Gain on sale of asset

Amortization of right-of-use assets

Amortization of intangible assets

Changes in operating assets and liabilities:

Accounts receivable, net

Prepaid assets and deposits

Prepaid expenses and deposits

Other receivables

Right-of-use assets

( 2,914,068 )

Lease liability

2 unchanged sentences

Purchase price payable

Current liabilities

Warrant liability

Net cash used in operating activities from continuing operations

cash (used in) provided by operating activities from continuing operations

( 13,286,163 )

Net cash used in operating activities from discontinued operations

cash used in operating activities from discontinued operations

( 5,870,449 )

Cash flows from investing activities:

Funds acquired through acquisitions

Proceeds from sale of fixed assets

Investment in capitalized software

Net cash (used in) investing activities from continuing operations

Net cash provided by investing activities from discontinued operations

Cash flows from financing activities:

Proceeds from the issuance of debt

Repayment of debt

cash used in operating activities

( 14,265,239 )

( 2,225,192 )

Cash flows from investing

Cash received in acquisition

Acquisition of property and equipment

Investment in securities

( 2,500,000 )

Funds acquired through

Net cash used in investing

activities from continuing operations

( 2,379,024 )

Net cash provided by investing

activities from discontinued operations

cash provided by (used in) investing activities

Cash flows from financing

Repayment of contingent liability

( 1,246,346 )

( 1,043,107 )

Proceeds from issuance from debt

Repayment of debt

Proceeds from loan payable, related party

Proceeds from issuance of convertible notes,

net of issuance costs

Cash dividends paid

( 14,858,831 )

Proceeds from sale of future revenue

Proceeds from exercise of stock options

Proceeds from exercise of warrants

Proceeds from securities purchase agreement

Proceeds from issuance of common stock, net of issuance costs

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

Net cash (used in) financing activities from discontinued operations

Net decrease in cash

Proceeds from exercise of options

Net cash (used in)

provided by financing activities from continuing operations

( 12,974,770 )

Cash at beginning of the year

Cash at end of the period

Supplemental disclosure of cash flow information

Cash paid for interest, net

Cash paid for income taxes

Non-Cash Transactions

Net cash used in financing

activities from discontinued operations

cash (used in) provided by financing activities

( 12,979,770 )

Net change in cash

( 1,094,577 )

Cash at beginning of year

Cash at end of year

Supplemental disclosure

of cash flow information:

Cash paid for interest

Cash paid for taxes

Supplemental disclosure

of non-cash investing and financing activities:

Issuance of shares pursuant to Merger

Assets acquired in connection with Merger

Liabilities assumed in connection with Merger

Insurance premium financed

Warrants issued with convertible note

Issuance of common shares in connection with

converible debenture

Equity line of commitment shares issued as

offering costs

Derivative liability recognized in connection

with issuance of convertible note

Note issued as SOSRx contribution

Not cancelled from SORx agreement termination

Intangible asset contribution from non-controlling interest

Disposition of assets, related party

Issuance of note receivable

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

to Consolidated Financial Statements

the years ended December 31, 2023 and 2022

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

1 – ORGANIZATION AND BASIS OF PRESENTATION

(“ we ”, “ our ”, “ Trxade ”, and the “ Company ”)

owns as of December 31, 2023, 100 %

of Trxade, Inc.

and Integra Pharma Solutions, LLC, Bonum Health,

LLC, Superlatus, Inc.

and its wholly-owned subsidiaries, Sapientia Technologies, LLC (“Sapientia”), Superlatus Food

Service Holding Company, Superlatus PD Holding Company, and The Urgent Company, Inc.

On July 31, 2023, the Company completed a merger

transaction that resulted in with Superlatus, Inc.

becoming a wholly owned subsidiary of the Company (see “Merger”,

On September 27, 2023, the Company acquired The Urgent Company, Inc.

and its related subsidiaries (see Note 3).

the year ended December 31, 2023, Trxade, Inc., operated a web-based market platform that enables commerce among healthcare buyers and

sellers of pharmaceuticals, accessories and services.

Pharma Solutions, LLC (“IPS”, d.b.a.

Trxade Prime), is a licensed pharmaceutical wholesaler and sells brand, generic and

non-drug products to customers.

IPS customers include all healthcare markets including government organizations, hospitals, clinics and

independent pharmacies nationwide.

Specialty Pharmacy, LLC, (“CSP”) is an accredited independent retail pharmacy with a focus on a community-based model offering

home delivery services to patients.

Pharma Solutions, LLC (“APS”, d.b.a.

DelivMeds) is currently being rebranded and the consumer-based app is still being developed.

To date, the Company has not generated any revenue from this product.

January 20, 2023, the Company entered into Membership Interest Purchase Agreements to sell 100 % of the outstanding membership interests

of the Company’s subsidiaries, CSP and APS.

The Company will receive consideration in the amount of $ 125,000 for APS and $ 100,000

The Company also agreed to enter into a Master Service Agreement to operate the businesses prior to closing.

Additional amounts

owed to the Company as a result of this Master Service Agreement totaled $ 1,075,000 as of the closing date of August 22, 2023 (see Note

3 and Note 7).

Health, LLC (“Bonum Health”), was formed to hold certain telehealth assets acquired in October 2019.

The “Bonum Health

Hub” was launched in February 2020;

September 20, 2024, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Amended and Restated

Certificate of Incorporation to change the legal name of the Company from “TRxADE HEALTH, Inc.” to “Scienture Holdings,

Company owned, as of December 31, 2024, 100 % of Softell Inc.

(f/k/a Trxade Inc.), Integra Pharma Solutions, LLC, and Scienture, LLC

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

October 4, 2024, the Company and Softell Inc.

(f/k/a Trxade Inc.) (“Softell”) entered into an Assignment and Assumption of

Membership Interests (the “IPS Assignment Agreement”), pursuant to which the Company transferred, and Softell accepted, 100 %

of the membership interests of Integra Pharma Solutions, LLC (“IPS”).

As a result, IPS is now a wholly-owned subsidiary of

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

platform that enabled commerce among healthcare buyers and sellers of pharmaceuticals, accessories and services.

Softell’s current

primary operations are conducted through IPS.

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

IPS’ customers include all

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

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.

The Bonum Health mobile

application is available on a subscription basis, primarily as a stand-alone telehealth software application that can be licensed on

a business-to-business (B2B) model to clients as an employment health benefit for the clients’ employees.

LLC (“SOSRx”) was formed on February 15, 2022.

The Company entered into a relationship with Exchange Health, LLC (“Exchange

Health”), a technology company providing an online platform for manufacturers and suppliers to sell and purchase pharmaceuticals.

SOSRx, a Delaware limited liability company, was formed, which was owned 51 % by the Company and 49 % by Exchange Health.

SOSRx did not

generate material revenue and in February of 2023, the Company voluntarily withdrew from the joint venture agreement.

As part of the

voluntary withdrawal the Company has recorded a loss of $ 352,244 from disposal of assets, which is included in net loss on discontinued

operations in the audited consolidated statement of operations in the amount of for the year ended December 31, 2023.

July 14, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) with

Superlatus, Inc., a U.S.-based holding company of food products and distribution capabilities (“Superlatus”) and Foods Merger

Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”).

is a diversified food technology company with distribution capabilities and systems to optimize food security and population health via

innovative Consumer Packaged Goods (“CPG”) products, agritech, foodtech, plant-based proteins and alt-protein and includes

wholly-owned subsidiary, Sapientia, Inc.

(“Sapientia”), a food tech business.

July 31, 2023 (the “Closing Date”), the Company completed its acquisition of Superlatus in accordance with the terms and

conditions of the Merger Agreement (the “Merger”), pursuant to which the Company acquired Superlatus by way of a merger of

the Merger Sub with and into Superlatus, with Superlatus being a wholly owned subsidiary of the Company and the surviving entity in the

the terms of the Merger Agreement, at the closing of the Merger (the “Closing”), shareholders of Superlatus received in aggregate

136,441 shares of common stock of the Company, representing 19.99 % of the then total issued and outstanding common stock of the Company

after the consummation of the Merger and 306,855 shares of Company’s Series B Preferred Stock, par value $ 0.00001 per share (the

“Series B Preferred Stock”), with a conversion ratio of 100 shares of Series B Preferred Stock to one share of common stock.

At Closing, the value of the common stock was $ 7.30 per share, resulting in a total value of $ 225,000,169 .

Upon consummation of the Merger,

the Company continued to trade under the current ticker symbol “MEDS.”

a condition and inducement to Superlatus’ willingness to enter into the Merger Agreement, on June 28, 2023, Suren Ajjarapu and

Prashant Patel (the “Principal Stockholders”) entered into an agreement with TRxADE (the “Stock Swap Agreement”),

pursuant to which, TRxADE was to transfer all of the shares or membership interest of the operating subsidiaries currently owned by TRxADE

to Principal Stockholders, in exchange for Suran Ajjarapu to surrender 85,000 share of common stock of TRxADE and Prashant Patel to surrender

81,666 shares of the common stock of TRxADE (the “Stock Swap Transaction”).

The closing of the Stock Swap Transaction was

to take place simultaneously with the approval of TRxADE stockholders of the conversion of the Series B preferred stock into common stock.

As of the date of this filing, TRxADE stockholders have not approved the conversion.

connection with the Merger, effective one (1) business day immediately prior to the Closing Date (the “MEDS Rights Record Date”),

the Company issued to the shareholders of the Company as of the MEDS Rights Record Date, including the independent directors who are

entitled to certain amount of common stock of the Company in connection with their 2023 annual compensation and regardless of whether

the common stock has been issued or vest before the MEDS Rights Records Date (collectively, the “MEDS Rights Shareholders”)

a non-transferrable right to receive one share of common stock of the Company at no cost (the “MEDS Rights”), with seven

(7) MEDS Rights issued per share of common stock of the Company held as of the MEDS Rights Record Date, conditioned upon their execution

of a Registration Rights Agreement.

Such issuances will be made in reliance on the exemption from registration pursuant to Section 3(a)(9)

or Section 4(a)(2) of the Securities Act, Regulation D under the Securities Act promulgated thereunder, and corresponding provisions

of state securities or “blue sky” laws.

The MEDS Rights are not actionable or transferable until registration;

provided they

become transferable one year after the date of the Merger if no registration has occurred.

As of the date of this filing, no MEDS Rights

shares have been issued.

all of the closing conditions of the Merger Agreement were met.

The Company is in the process of determining a divestment and winddown plan for Softell and IPS.

On January 25, 2025,

the Company’s Board of Directors approved the preparation of a divestment and winddown plan for the winddown of each of Softell,

IPS, Bonum Health, Inc., and Bonum.

LLC (f/k/a Scienture, Inc.) (“Scienture”) is a New York based branded, specialty pharmaceutical research company which is

engaged in the research and development of branded pharmaceutical products.

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.

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.

July 14, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “Superlatus Merger Agreement”)

with Superlatus, Inc., a U.S.-based holding company of food products and distribution capabilities (“Superlatus”) and Foods

Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”).

July 31, 2023, the Company completed its acquisition of Superlatus in accordance with the terms and conditions of the Superlatus Merger

Agreement (the “Superlatus Merger”), pursuant to which the Company acquired Superlatus by way of a merger of the Merger Sub

with and into Superlatus, with Superlatus being a wholly owned subsidiary of the Company and the surviving entity in the Superlatus Merger.

the terms of the Superlatus Merger Agreement, at the closing of the Superlatus Merger, shareholders of Superlatus received an aggregate

of 136,441 shares of the Company’s common stock and 306,855 shares of the Company’s Series B Preferred Stock, par value $ 0.00001

per share (the “Series B Preferred Stock”).

Each share of Series B Preferred Stock is convertible into 100 shares of the

Company’s common stock.

At Closing, the value of the Company’s common stock was $ 7.30 per share, resulting in a total value

of $ 225,000,169 .

Upon consummation of the Superlatus Merger, the Company continued to trade under its former ticker symbol “MEDS”.

all of the closing conditions of the Superlatus Merger Agreement were met.

As a result, the Company entered into Amendment No.

1 to the Amended

and Restated Agreement and Plan of Merger (the “Amendment”) on January 8, 2024.

Under the terms of the Amendment, the merger

consideration to the shareholders of Superlatus was adjusted to the aggregate of 136,441 shares of common stock of the Company, representing

19.99 % of the total issued and outstanding common stock of the Company after the consummation of the Merger and 15,759 shares of Company’s

Series B Preferred Stock, par value $ 0.00001 per share (the “Series B Preferred Stock”), with a conversion ratio of 100 shares

of Series B Preferred Stock to one share of common stock.

At Closing, the value of the common stock was $ 7.30 per share, resulting in

a total value of $ 12,500,089 .

Additionally, the shareholders of Superlatus agreed to surrender back to the Company 291,096 shares of

the Company’s Series B Preferred Stock.

In March 2024 the Company divested of its interest in Superlatus and, among other things,

the Stock Swap Transaction in not expected to occur.

Amended and Restated Agreement and Plan of Merger (the “Superlatus Amendment”) on January 8, 2024.

Under the terms of the

Superlatus Amendment, the merger consideration to the shareholders of Superlatus was adjusted to an aggregate of 136,441 shares of the

Company’s common stock and 15,759 shares of the Company’s Series B Preferred Stock, resulting in a total value of $ 12,500,089 .

Additionally, the shareholders of Superlatus agreed to surrender back to the Company 291,096 shares of the Company’s Series B Preferred

As described below, in March 2024, the Company divested of its interest in Superlatus.

July 25, 2024, the Company entered into and closed an Agreement and Plan of Merger (the “Scienture Merger Agreement”) with

MEDS Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub I”), MEDS Merger

Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Merger Sub II” and, together

with Merger Sub I, the “Merger Subs”), and Scienture.

Pursuant to the Scienture Merger Agreement, (i) Merger Sub I merged

with and into Scienture (the “First Merger”), with Scienture continuing as the surviving entity and a wholly owned subsidiary

of the Company, and (ii) Scienture merged with and into Merger Sub II (the “Second Merger” and, together with the First Merger

and all other related transactions, the “Scienture Merger”), with Merger Sub II continuing as the surviving entity.

In connection

with the transactions, the Company changed its name to “Scienture Holdings, Inc.” and Merger Sub II, as the surviving entity

of the Second Merger, changed its name to “Scienture, LLC”.

consideration for the Scienture Merger, at the effective time of the First Merger (the “Effective Time”), the shares of Scienture

common stock issued and outstanding immediately prior to the Effective Time were converted into the right to receive, in the aggregate,

(i) 291,536 shares of the Company’s common stock and (ii) 6,826,753 shares of the Company’s Series X Non-Voting Convertible

Preferred Stock (the “Series X Preferred Stock”), each share of which is convertible into one share of common stock.

LLC is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system

and cardiovascular diseases.

Scienture is developing a broad range of novel product candidates including new potential treatments for

hypertension, migraine, pain and thrombosis and other related disorders.

The intellectual property application process was initiated

in November 2019 and the product development activities commenced in January 2020.

Scienture’s assets in development are 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.

February 16, 2024, the Company, together with Softell and Micro Merchant Systems, Inc.

(“MMS”), entered into an asset purchase

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

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

Softell operated a web-based market platform

designed to enable trading among healthcare buyers and sellers of pharmaceuticals, accessories and services.

The purchase price paid

at closing was $ 22,660,182 .

Pursuant to the terms and conditions of the MMS APA, because MMS received $ 1,600,000 or greater in certain

collections from third parties resulting from any products or services sold, or provided, by the business assets and operations acquired

from Softell during the period ending on the four-month anniversary of the closing date, the Company was due an additional $ 7,500,000

payment from MMS.

The Company received the $ 7,500,000 in May 2024.

March 5, 2024, the Company entered into a Stock Purchase Agreement (the “Superlatus SPA”) with Superlatus Foods Inc.

Pursuant to the Superlatus SPA, the Company sold all of the issued and outstanding stock of Superlatus to the Buyer.

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

of the Superlatus SPA.

As a result of the transaction, Superlatus ceased to be a subsidiary of the Company, and the rights and assets

of Superlatus together with various liabilities and obligations that were specific to Superlatus became rights and obligations of the

Note 3 for further detail on the dispositions.

of Presentation and Principles of Consolidation

Company’s consolidated financial statements include the accounts of TRxADE HEALTH, INC., Trxade, Inc., Integra Pharma Solutions,

Inc., Bonum Health, LLC, Superlatus, Inc., Sapientia Technologies, LLC and The Urgent Company, Inc.

The accompanying consolidated financial

statements of TRxADE HEALTH, Inc.

have been prepared in accordance with accounting principles generally accepted in the United States

of America (“U.S.

Company’s consolidated financial statements include the accounts of Scienture LLC, TRxADE Health, Inc., Softell, Integra Pharma

Solutions, Inc., and Bonum Health.

The accompanying consolidated financial statements of the Company have been prepared in accordance

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

GAAP”) and the rules of the SEC.

All significant intercompany accounts and transactions have been eliminated.

significant intercompany accounts and transactions have been eliminated.

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

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differences between estimates and the actual results, future results of operations will be affected.

Significant estimates for the years ended December 31, 2023 and 2022 include the valuation of intangible assets, including goodwill.

Significant estimates for the years

ended December 31, 2024 and 2023 include the valuation of intangible assets, including goodwill, valuation of derivative liabilities

and gain (losses) on dispositions.

Value of Financial Instruments

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

Fair value is defined as the exchange price that would be

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

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

Valuation techniques used to measure fair value must maximize

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

Financial assets and liabilities carried at fair value are

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

observable and the last is considered unobservable:

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

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

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

or can be corroborated by observable market data.

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

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

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

fair value because of their short-term maturity.

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

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

Company’s derivative liability is a Level 3 liability measured at fair value on a recurring basis.

June 21, 2023, the Company executed a 1:15 reverse stock split for stockholders of record on that date .

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Issued Accounting Pronouncements

June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13,

“Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”).

ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration

of a broader range of reasonable and supportable information to inform credit loss estimates.

ASU 2016-13 is effective for fiscal years

beginning after December 15, 2022, including interim periods within those fiscal years.

The Company adopted ASU 2016-13 effective January

The Company determined that the update applied to trade receivables, but that there was no material impact to the consolidated

financial statements from the adoption of ASU 2016-13.

August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and

Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)”.

This ASU reduces the number of accounting models for convertible

debt instruments and convertible preferred stock and amends the guidance for the derivatives scope exception for contracts in an entity’s

own equity to reduce form-over-substance-based accounting conclusions.

In addition, this ASU improves and amends the related earnings

per share guidance.

This standard is effective for us on January 1, 2022, including interim periods within those fiscal years.

is either a modified retrospective method or a fully retrospective method of transition.

The adoption of ASU 2020-06 did not have a material

impact on the consolidated financial statements.

November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07 Segment Reporting (Topic 280):

to Reportable Segment Disclosures .

The new guidance requires enhanced disclosure of significant expenses that are regularly reported

to the chief operating decision maker and the nature of segment expense information used to manage operations.

The new guidance is effective

for all public companies for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning

after December 15, 2024.

Early adoption is permitted.

The Company adopted ASU 2023-07 on January 1, 2024.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures .

The new guidance

requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative

The new guidance is effective for public companies for annual reporting periods beginning after December 15, 2024, and for

non-public companies for annual reporting periods beginning after December 15, 2025, with early adoption permitted for both.

will adopt the new standard in annual reporting period beginning after December 15, 2025, and is currently evaluating the impacts of

the new guidance on its disclosures within the consolidated financial statements.

Concentration

of Credit Risks and Major Customers

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

Company places its cash and cash equivalents with financial institutions.

Deposits are insured to Federal Deposit Insurance Corp limits.

During years ended December 31, 2024 and 2023, no sales to customers represented greater than 10 % of revenue.

Receivable, net

January 1, 2023, the Company adopted ASU 2016-13 “ Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses

on Financial Instruments” and its related amendments using the prospective method.

The new standard requires the use of a current

expected credit loss impairment model to develop and recognize credit losses for financial instruments at amortized cost when the asset

is first originated or acquired, and each subsequent reporting period.

Measurement of Credit

Losses on Financial Instruments” and its related amendments using the prospective method.

The new standard requires the use

of a current expected credit loss impairment model to develop and recognize credit losses for financial instruments at amortized cost

when the asset is first originated or acquired, and each subsequent reporting period.

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

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

Company had an account receivable with a single customer, GSG PPE, LLC (“GSG”), for the amount of $ 630,000 , which was past

The Company had obtained a Note Receivable which was due on September 30, 2021 and remained unpaid.

The Company did not believe

the amount to be collectible without legal actions, and therefore, recorded bad debt expense reflected on the consolidated statement

of operations during the year ended December 31, 2021.

The note was not paid pursuant to its terms and the Company had filed a suit to

collect on the note and the personal guaranty securing the note.

The Company settled the lawsuit in June of 2022.

During the years

ended December 31, 2023, and 2022, there was a bad debt recovery from the GSG lawsuit of $ 32,074 and $ 98,841 respectively.

Receivables, net

Company’s other receivables balance is from one vendor.

On May 20, 2022, effective as of May 18, 2022, Community Specialty Pharmacy,

LLC (“CSP”) entered into an agreement to acquire COVID-19 testing kits from a third-party vendor for an aggregate of $ 1,200,000 ,

of which $ 875,000

was paid on May 23, 2022.

The Company received

the COVID-19 testing kits in July 2022.

On August 18, 2022, the Company was informed by the vendor that the vendor had received a letter

from the U.S.

Food and Drug Administration (“FDA”) that the COVID-19 test kits were misbranded under Section 502(o) of the

Federal Food, Drug, and Cosmetic Act (“FDC Act”) (21 USC 352(o)) and adulterated under Section 501(f) of the FDC Act (21

Furthermore, the vendor informed the Company that the letter from the FDA also stated that because of the FDA’s prohibition

on the distribution of adulterated and/or misbranded devices applies to all parties along the distribution chain, the FDA was advising

the vendor against furthering the distribution of the COVID-19 test kits in interstate commerce.

The company wrote the amount off as

a loss of inventory as of December 31, 2022.

As of December 31, 2023, and December 31, 2022, the balance of this receivable was $ 0 .

August 22, 2023, the Company completed the sale of CSP and APS (see Note 3).

The net balance due to the Company from these entities,

in excess of the Note Receivable (see Note 6), was $ 370,608 as of December 31, 2023.

of December 31, 2024 and 2023, other receivables are $ 4,138,770 and $ 1,224,702 .

As of December 31, 2024, other receivables primarily

consist of short-term advances to related parties including Wellgistics Health, Inc.

(f/k/a Danam Health Inc.) and Tollo Health, Inc.

Offering Costs

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

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

The deferred offering costs are charged to additional

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

As of December 31, 2024 and 2023, the Company has $ 534,800 and $ 0 , respectively, capitalized deferred offering costs.

Financial Instruments

Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded

at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes pricing model to value the derivative

instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments

should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

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

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

Assets and Goodwill

Company tests indefinite-lived intangible assets for impairment on an annual basis or whenever events or changes occur that would more-likely-than

not reduce the fair value of the indefinite-lived intangible asset below its carrying value between annual impairment tests.

Any indefinite-lived

intangible asset assessment is performed at the Company level.

The Company recognized a goodwill impairment loss of $ 5,129,115 for the year ended December 31, 2023.

The goodwill resulted from the acquisition of Superlatus and was subsequently determined to be impaired based on the facts and circumstances surrounding

the sale of Superlatus on March 5, 2024.

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

acquisition (see Note 3).

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

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

In accordance with

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

when indicators of potential impairment exist.

Goodwill is tested for impairment at the reporting unit level.

The Company’s reporting

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

For purposes of impairment

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

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

unit is less than its carrying value.

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

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

financial performance of the reporting units.

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

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

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

Under the quantitative impairment test, the estimated fair

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

If the carrying value of the reporting unit including

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

to that reporting unit.

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

of December 31, 2024, management performed a qualitative impairment assessment of our reporting units, of which there were no indications

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

a quantitative goodwill test was not required, and no goodwill impairment was recognized during the year ended December 31, 2024.

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

The product technologies represent a broad

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

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

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

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

These assets should be

amortized over their expected remaining economic life.

The product technology assets will remain unamortized, subject to potential

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

At that point,

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

of Long-Lived Assets

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

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

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

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

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

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

the fair value less costs to sell.

Company did not record an impairment charge for the years ended December 31, 2024 and 2023.

Company accounts for investments that it does not control using the cost method, equity method or fair value method, as applicable.

in companies in which the Company owns less than a 20% equity interest and where it does not exercise significant influence over the

operating and financial policies of the investee are accounted for using the cost method of accounting.

The Company periodically reviews

the carrying value of these investments to determine if there has been an other-than-temporary decline in fair value below carrying value.

A variety of factors are considered when determining if a decline in fair value below carrying value is other-than-temporary, including,

among others, the financial condition and business prospects of the investee, as well as the Company’s investment intent.

method investments are carried at cost, which approximates or is less than fair value.

Dividends received by the Company are recognized

in equity (losses) earnings of affiliates, net of tax on the consolidated statements of operations.

February 29, 2024, Softell entered into a Subscription Agreement (the “Subscription Agreement”) with Lafayette Energy Corp.,

a Delaware corporation (“Lafayette”).

Pursuant to the Subscription Agreement, Softell will, in two equal tranches, invest

a total of up to $ 5,000,000 in Lafayette in exchange for up to 2,000,000 shares of Lafayette’s Series A Convertible Preferred Stock,

with the second tranche becoming payable only upon Softell’s receipt of notice that Lafayette has successfully drilled its first

oil and gas well and produced at least one hundred (100) barrels of oil.

of December 31, 2024, the Company evaluated the financial condition and business prospects of Lafayette, and determined there was an

other-than-temporary decline in fair value below carrying value.

As such, the Company recognized an impairment of $ 2,500,000 .

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

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

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

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

Stock option forfeitures are recognized at the

date of employee termination.

Effective January 1, 2019, the Company adopted ASU 2018-07 for the accounting of share-based payments granted

to non-employees for goods and services.

Company accounts for its leases under ASC 842, Leases.

Under this guidance, arrangements meeting the definition of a lease are classified

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

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

borrowing rate.

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

over the lease term.

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

rent expense over the lease term.

For finance leases, interest on the lease liability and the amortization of the right of use asset

results in front-loaded expense over the lease term.

Variable lease expenses are recorded when incurred.

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

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

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

& Development Expenses

and development costs are expensed in the period incurred in accordance with ASC 730, Research and Development.

These expenses consist

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

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

(loss) Per Common Share

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

common shares outstanding.

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

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

common shares had been issued and if the additional common shares were dilutive.

The dilutive effect of the Company’s options

and warrants is computed using the treasury stock method.

As of December 31, 2023, we had 218,729

outstanding warrants to purchase shares of common stock and 26,229

options to purchase shares of common stock.

As part of the termination of the White Lion deal, White Lion was issued 50,000

shares of stock per the agreement on March 1, 2023.

Armistice Capital executed its pre-funded warrants on January 4, 2023, and

purchased 601,740

shares ( 40,116 shares after the effect of the 1:15 reverse stock split on June 21, 2023, see Note 13) of stock with a purchase price

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 December 31, 2024, we had 238,594 warrants to purchase shares of common stock, 15,759 shares of

Series B preferred stock and 23,930 options to purchase shares of common stock, all outstanding

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

OF BASIC AND DILUTIVE INCOME (LOSS) PER SHARE

For the Years Ended

SCHEDULE OF BASIC AND DILUTIVE LOSS PER SHARE

Net loss from continuing operations

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$ ( 8,482,864 )

Net loss attributable to noncontrolling interest

Net loss from continuing operations available to common stockholders

( 13,720,546 )

( 1,965,673 )

Net loss from discontinued operations

( 4,123,028 )

$ ( 1,506,426 )

Numerator for basic and diluted EPS - income available to common stockholders

Net income (loss) on discontinued

( 9,360,710 )

Net income (loss)

$ ( 17,843,574 )

Denominator for EPS – weighted average shares

Net loss per common share attributable to common stockholders

Net loss per common share from continuing operations

Net loss per common share from discontinued operations

Company’s provision for income taxes was $ 0

for the year ended December 31, 2023, and $ 0

for the year ended December 31, 2022, respectively.

The income tax provisions for the twelve-month 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.

Net income (loss) per common share from discontinued

Net income (loss)

Company’s benefit / (provision) for income taxes was $ 534,396 and $ 0 for the years ended December 31, 2024 and 2023, respectively.

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.

2 – GOING CONCERN

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financial statements are issued.

In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No.

2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions

or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after

the date that the financial statements are issued.

of December 31, 2023, the Company had an accumulated deficit of $ 33,245,940 .

The Company has limited financial resources.

As of December

31, 2023, the Company had a working capital deficit of $ 8,803,293 and a cash balance of $ 151,908 .

The Company will need to raise additional

capital or secure debt funding to support on-going operations.

The sources of this capital are expected to be the sale of equity and

debt, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders.

If the Company is unable to access additional capital moving forward, it may hurt the Company’s ability to grow and to generate

future revenues, financial position, and liquidity.

These factors raise substantial doubt about the ability of the Company to continue

as a going concern.

Unless Management is able to obtain additional financing, it is unlikely that the Company will be able to meet its

funding requirements during the next 12 months.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

In accordance with Financial Accounting Standards Board, or the FASB, ASU No.

2014-15, Presentation

of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered

in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial

statements are issued.

of December 31, 2024, the Company had an accumulated deficit of $ 39,038,973 and $ 308,096 in cash.

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

any businesses or assets we acquire.

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

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

If we are unable to access additional

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

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

Unless management is able to obtain

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

The financial

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

3 – ACQUISITIONS AND DISPOSITIONS

July 31, 2023, the Company entered into the Merger Agreement (see Note 1) with Superlatus (“Seller”) whereby the Company

acquired 100 % of the stock of the Seller (the “Acquisition”).

Company evaluated the Scienture Merger Agreement pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations .

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

contribute to the ability to create outputs.

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

financial statements from the date of acquisition.

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

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

of the acquisition.

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

the Company believes may arise from the acquisition.

The purchase price allocation is preliminary and could be significantly revised

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

of tangible assets and related deferred tax assets and liabilities.

The Company will finalize its valuation and the allocation of the

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

July 25, 2024, the Company issued 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock pursuant to the Scienture

Merger Agreement.

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

The fair value was determined by the

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

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

The Company also applied a discount

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

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

OF PURCHASE PRICE ALLOCATION

Purchase consideration:

X preferred stock

purchase consideration

Purchase price allocation:

Operating lease right-of-use

Intangible assets - product

Prepaid expenses

Accounts payable

Accrued liabilities

( 1,198,134 )

Loan payable, related party

Lease liability

Development agreement liability

( 1,285,000 )

Long-term convertible notes

( 2,000,000 )

tax liability

( 13,524,213 )

Accounts payable and other current liabilities

Purchase price payable

Notes payable

assets acquired

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

assets that do not qualify for separate recognition.

The goodwill is not deductible for tax purposes.

results of Scienture have been included in the consolidated financial statements since the date of acquisition.

Scienture’s revenue

and net loss included in the consolidated financial statements since the acquisition date through December 31, 2024 were $ 0 and a loss

of $ 3,509,597 , respectively.

Pro Forma Financial Information

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

as of January 1, 2023.

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

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

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

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

The pro forma information does not give effect to any

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

SCHEDULE OF PRO

FORMA FINANCIAL INFORMATION

Net loss from continuing operations

$ ( 23,525,452 )

$ ( 9,698,339 )

Net loss from continuing operations per share

July 31, 2023, the Company entered into the Superlatus Merger Agreement (see Note 1) with Superlatus whereby the Company acquired 100 %

of the stock of Superlatus in the Superlatus Merger.

Superlatus includes a wholly-owned subsidiary, Sapientia.

Consideration

for the Acquisition consisted of (i) 136,441 shares of the Company’s common stock at a fair value of $ 7.30 per share, representing

19.99 % of the total issued and outstanding share of the Company’s common stock at Closing, and (ii) 306,855 shares of the Company’s

Series B Preferred Stock, a new class of the Company’s non-voting convertible preferred stock with a conversion ratio of 100 to

The total fair value of the common stock and Series B Preferred Stock on the Closing Date was $ 225,000,169 (“Purchase Price”).

On January 8, 2024, the Company entered into Amendment No.

1 to the Agreement and Plan of Merger (the “Amendment”).

the terms of the Amendment, the merger consideration to the shareholders of Superlatus was adjusted to an aggregate of 136,441 shares

of common stock of the Company, representing 19.99 % of the total issued and outstanding common stock of the Company after the consummation

of the Merger and 15,759 shares of Company’s Series B Preferred Stock, par value $ 0.00001 per share, with a conversion ratio of

100 shares of Series B Preferred Stock to one share of common stock.

The total fair value of the common stock and Series B Preferred

Stock on the Closing Date was adjusted to $ 12,500,089 (“Amended Purchase Price”).

Additionally, the shareholders of Superlatus

agreed to surrender back to the Company 291,096 shares of the Company’s Series B Preferred Stock previously received before the

Consideration for the

Superlatus Merger consisted of (i) 136,441 shares of the Company’s common stock at a fair value of $ 7.30 per share and (ii) 306,855

shares of the Company’s Series B Preferred Stock, each share of which is convertible into 100 shares of common stock.

fair value of the common stock and Series B Preferred Stock on the closing date was $ 225,000,169 (the “Purchase Price”).

On January 8, 2024, the Company entered into the Superlatus Amendment.

Under the terms of the Superlatus Amendment, the merger consideration

to the shareholders of Superlatus was adjusted to an aggregate of 136,441 shares of the Company’s common stock and 15,759 shares

of the Company’s Series B Preferred Stock.

The total fair value of the common stock and Series B Preferred Stock on the closing

date was adjusted to $ 12,500,089 (the “Amended Purchase Price”).

Additionally, the shareholders of Superlatus agreed to surrender

back to the Company 289,731 shares of the Company’s Series B Preferred Stock received before the Superlatus Amendment.

acquisition of Superlatus was accounted for as a business combination using the acquisition method pursuant to FASB ASC Topic 805.

3 unchanged sentences

valuation expert assisted the Company in determining these fair values.

The Amended Purchase Price allocation as of the acquisition date is presented as follows:

Amended Purchase Price allocation as of the acquisition date is presented as follows:

OF PURCHASE PRICE ALLOCATION

July 31, 2023

Purchase consideration:

Common Stock, at fair value

Series B Preferred Stock, at fair value

Total purchase consideration

Common Stock,

at fair value

B Preferred Stock, at fair value

purchase consideration

Purchase price allocation:

2 unchanged sentences

Assets acquired

Accounts payable and other current liabilities

Accounts payable and other

current liabilities

Purchase price payable

Notes payable

( 1,905,000 )

1 unchanged sentence

( 2,538,548 )

Net assets acquired

assets acquired

Urgent Company, Inc.

September 27, 2023, the Company entered into an Asset Purchase Agreement (“APA”) with The Urgent Company, Inc.

September 27, 2023, the Company entered into an Asset Purchase Agreement (the “TUC APA”) with The Urgent Company, Inc.

and its wholly owned subsidiaries, pursuant to which, the Company was assigned certain inventory and property and equipment and assumed

certain operating leases for consideration of $ 4,400,000 in promissory notes (“Purchase Price”, see Note 11).

This acquisition

is expected to enhance the Company’s production of sustainable food products and enable the expansion of market share.

certain operating leases for consideration of $ 4,400,000 in promissory notes (see Note 11).

Subsequent to December 31, 2023, we divested

our interest in TUC.

transaction was accounted for as an asset acquisition pursuant to FASB ASC Topic 805.

2 unchanged sentences

respective relative fair value as of the date of the transaction.

following summarizes the relative fair values of the assets acquired as of the acquisition date based on the allocation of

following summarizes the provisional relative fair values of the assets acquired as of the acquisition date based on the allocation of

the cost of the asset acquisition:

OF FAIR VALUES OF ASSETS ACQUIRED

September 27, 2023

consideration:

purchase consideration

Promissory note

Total purchase consideration

Allocation of cost of assets acquired:

Property and equipment

of cost of assets acquired:

and equipment

assets acquired

Net assets acquired

and Divestitures

on, February 1, 2023, the Company, Exchange Health and SOSRx, entered into a Voluntary Withdrawal and Release Agreement, which was replaced

in its entirety, corrected, and became effective on February 4, 2023 (as replaced and corrected, the “Release Agreement”).

part of the Release Agreement, a note payable to Exchange Health was forgiven in the amount of $ 500,000 and $ 15,000 in accounts payable

Effective February 4, 2023, the operations of SOSRx were discontinued and operations were shut down.

As a result of this,

the assets and liabilities of SOSRx have been reflected as assets and liabilities of discontinued operations in the Company’s consolidated

balance sheets.

As of December 31, 2023 and December 31, 2022 as follows:

SCHEDULE OF FINANCIAL STATEMENTS OF DISCONTINUED OPERATIONS

Accounts receivable

Total assets of discontinued operations

Accounts payable

Total liabilities of discontinued operations

terms of the Release Agreement qualify the transaction as a discontinued operation in accordance with U.S.

As a result, operating

results and cash flows related to the SOSRx operations have been reflected as discontinued operations in the Company’s consolidated

statements of operations, consolidated statements of cash flows and consolidated statements of shareholders’ equity.

Pharma Solutions, LLC and Community Specialty Pharmacy, LLC

August 22, 2023, the Company and Wood Sage, LCC (“Wood Sage”) entered into a Membership Interest Purchase Agreement, pursuant

to which the Company sold 100 % of the membership interest in Alliance Pharma Solutions, LLC (“ASP MIPA”) for consideration

of a $ 125,000 promissory note (“ASP Sale Price”) and a Membership Interest Purchase Agreement, pursuant to which the Company

sold 100 % of the membership interest in Community Specialty Pharmacy, LLC (“CSP MIPA”) in exchange for a $ 100,000 promissory

note (“CSP Sale Price”).

divestiture of APS and CSP represented an intended strategic shift in the Company’s operations and will allow the Company to become

focused on food technology As a result, the results of APS and CSP were classified as discontinued operations in our condensed statements

of operations and excluded from both continuing operations and segment results for the years ended December 31, 2023 and 2022.

August 22, 2023, the Company and Wood Sage, LLC (“Wood Sage”) entered into (i) a Membership Interest Purchase Agreement (the

“APS MIPA”), pursuant to which the Company sold its 100 % membership interest in Alliance Pharma Solutions, LLC (“APS”)

for consideration of a $ 125,000 promissory note (the “APS Sale Price”) and (ii) a Membership Interest Purchase Agreement

(the “CSP MIPA”), pursuant to which the Company sold 100 % of the membership interest in Community Specialty Pharmacy, LLC

(“CSP”) in exchange for a $ 100,000 promissory note (the “CSP Sale Price”).

As a result, the results of APS and

CSP were classified as discontinued operations in our consolidated statements of operations and excluded from both continuing operations

and segment results for the year ended December 31, 2023.

part of recognizing the business as held for sale in accordance with U.S.

13 unchanged sentences

Prepaid assets

Intangible assets and capitalized software, net

Intangible assets and capitalized software,

Accounts payable

1 unchanged sentence

Net assets sold

results of operations from discontinued operations for the years ended December 31, 2023 and 2022, have been reflected as discontinued

operations in the consolidated statements of operations and consist of the following:

February 16, 2024, the Company, together with Softell and MMS, entered into the MMS APA under which MMS agreed to purchase for cash substantially

all of the assets of Softell.

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

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

Subject to the terms and conditions of the MMS APA, because MMS received $ 1,600,000

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

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

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

The Company received the payment in May 2024.

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

As of February 16, 2024, the Company no longer

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

The components of the disposition are as follows:

OF BUSINESS ACQUISITIONS ASSETS AND LIABILITIES

Cash received from MMS

Other receivable from

Fair value of consideration received

fair value of consideration received

Carrying amount

of assets and liabilities

Accounts receivable, net

Prepaid expenses

Property, plant and equipment, net

Intangible assets, net

Operating lease right-of-use assets

Purchase price payable

Accounts payable

Accrued liabilities

Other current liabilities

Lease liability, current

Notes payable, current portion

Lease liability, net of

current portion

Notes payable

carrying amount of assets and liabilities

Gain on disposition

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

of operations.

March 5, 2024, the Company entered into the Superlatus SPA with the Buyer.

Pursuant to the Superlatus SPA, the Company sold all of the

issued and outstanding stock of Superlatus to the Buyer.

The $ 1.00 purchase price for the stock was delivered to the Company at the closing,

which occurred simultaneously with the execution of the Superlatus SPA.

As a result of the transaction, Superlatus ceased to be a subsidiary

of the Company, and the rights and assets of Superlatus together with various liabilities and obligations that were specific to Superlatus

became rights and obligations of the Buyer.

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

As of March 5, 2024, the Company no longer

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

The components of the disposition are as follows:

OF BUSINESS ACQUISITIONS ASSETS AND LIABILITIES

Fair value of consideration

fair value of consideration received

Carrying amount

of assets and liabilities

Property, plant and equipment, net

Intangible assets, net

Operating lease right-of-use assets

Purchase price payable

Accounts payable

Accrued liabilities

Notes payable, current portion

( 6,480,000 )

Lease liability - current

Lease liability - net of current portion

Notes payable

carrying amount of assets and liabilities

Loss on disposition

$ ( 2,083,742 )

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

of operations.

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

operations in the accompanying consolidated statements of operations for the years ended December 31, 2024 and 2023.

of December 31, 2024, we had $ 8,145

of the current assets from discontinued operations,

comprised of accounts receivable and $ 5,346

of current liabilities from discontinued operations,

comprised of accounts payable of $ 5,211 and

accrued liabilities of $ 135 .

results of the discontinued operations for the years ended December 31, 2024 and 2023 consist of the following:

OF DISCONTINUED OPERATIONS

ended December 31,

Cost of sales

Gross profit (loss)

( 3,872,135 )

Operating expenses:

Impairment of intangible asset

Wage and salary expense

Professional fees

Accounting and legal expense

Technology expense

General and administrative

Total operating expense

Operating income (loss) from discontinued operations

Total operating expenses

Operating income (loss)

( 5,224,547 )

Other income (expense)

Gain (loss) on asset sale

Total other income (expense)

Net income (loss) from discontinued operations

( 3,337,513 )

Non-operating income (expense):

Goodwill impairment

( 5,129,116 )

Gain (loss) on dispositions

( 2,083,742 )

Interest expense

Total non-operating income (expense)

( 2,083,742 )

( 5,191,801 )

( 6,023,197 )

Provision for income taxes

Net income (loss) on

discontinued operations

$ ( 152,670 )

$ ( 2,083,742 )

$ ( 10,416,348 )

$ ( 410,280 )

$ ( 706,587 )

$ ( 9,360,710 )

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

and Bonum Health, LLC, and have presented the results

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

4- RELATED PARTY TRANSACTIONS

April 1, 2023 and July 1, 2023 the Company entered into a relationship with Scietech, LLC (“Scietech”) in an independent

contractor agreement to consult on increasing sales on the IPS and Trxade Inc.

The agreement was for an annual fee of $ 400,000

to be split equally between IPS and Trxade Inc.

A 31 % investor in Scietech is the spouse of the interim CFO, Prashant Patel, which qualifies

as a related party.

The company was chosen because they were the most qualified to perform the desired qualifications.

February 15, 2022, the Company entered into a relationship with Exchange Health, a technology company providing an online platform for

manufacturers and suppliers to sell and purchase pharmaceuticals.

In connection therewith, SOSRx was formed in February 2022, which is

owned 51 % by the Company and 49 % by Exchange Health.

On February 15, 2022, the Company contributed cash to SOSRx in the amount of $ 325,000 ,

issued a promissory note to SOSRx in the amount of $ 500,000 , which was immediately assigned to Exchange Health (the “Promissory

Note”), and agreed to make an earn out payment of up to $ 400,000 , payable, at the Company’s discretion, in cash or common

stock of the Company, based on SOSRx achieving certain revenue targets of SOSRx (the “Earn Out Payments”);

and entered into

a Distribution Services Agreement with SOSRx (the “Distribution Agreement”).

Exchange Health contributed $ 792,000 in software

and contracts which was recorded as an intangible asset on the balance sheet of SOSRx.

The intangible asset was determined to be impaired

and was written off on December 31, 2022.

December 31, 2023, total related party debt was $ 0 .

and effective on, February 1, 2023, the Company, Exchange Health and SOSRx, entered into a Voluntary Withdrawal and Release Agreement,

which was replaced in its entirety and corrected on February 4, 2023, and effective February 4, 2023 (as replaced and corrected, the “Release

Pursuant to the Release Agreement, the Company voluntarily withdrew as a member of SOSRx pursuant to the terms of

the Operating Agreement of SOSRx, which provided that the Company would withdraw from SOSRx if certain revenue targets were not met,

which targets have not been met.

pursuant to the Release Agreement, (a) the Company agreed to the termination of its interests in SOSRx and its withdrawal as a member

thereof for no consideration (the “Withdrawal”);

(b) the Promissory Note, and all of the Company’s obligations under

such Promissory Note were terminated;

and (c) the parties agreed that no Earn Out Payments will be due.

The Release Agreement also (i)

provides that all accumulated losses of SOSRx through December 20, 2022, will be allocated 51% to the Company and 49% to Exchange Health;

(ii) provides for a total of approximately $15,000 in outstanding invoices owed by the Company to SOSRx to be waived;

(iii) includes

certain indemnification obligations of SOSRx and Exchange Health;

(iv) requires SOSRx to pay certain pre-agreed outstanding invoices

(v) includes mutual releases of the Company and SOSRx and Exchange Health;

and (vi) includes customary representations and

warranties of the parties.

Health and Tollo Health

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

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

Wellgistics prepaid $ 250,000 prior to the

execution date.

The Wellgistics Note did not accrue interest.

As of December 31, 2023, the balance of the Wellgistics Note was $ 50,000 .

The Wellgistics Note was fully paid off in February 2024.

of December 31, 2024, other receivables include a $ 3,923,770 receivable from Wellgistics and $ 215,000 receivable from Tollo Health.

advances are unsecured, non-interest bearing and due on demand.

Note 7 for detail on the note receivable from Wood Sage.

Wellgistics Health and Tollo Health have common ownership and management with the Company.

February 29, 2024, the Company’s wholly owned subsidiary, Softell, entered into the Subscription Agreement with Lafayette.

to the Subscription Agreement, Softell will, in two equal tranches, invest a total of up to $ 5,000,000 in Lafayette in exchange for up

to 2,000,000 shares of Lafayette’s newly created Series A Convertible Preferred Stock, with the second tranche becoming payable

only upon Softell’s receipt of notice that Lafayette has successfully drilled its first oil and gas well and produced at least

one hundred (100) barrels of oil.

As of December 31, 2024, the Company determined Lafayette’s investment to be impaired and recognized

an impairment of $ 2,500,000 .

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

The loans are unsecured,

non-interest bearing and due on demand.

The loans were still outstanding as of December 31, 2024.

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

The loans are unsecured,

non-interest bearing and due on demand.

The loans were outstanding as of December 31, 2024.

5 – REVENUE RECOGNITION

Company derives revenue from two primary sources—product revenue and service revenue.

Company derives revenue from one primary source—product revenue.

revenue consists of shipments of:

of pharmaceutical products to pharmacies;

Revenues for our products are recognized and invoiced when the product is shipped to the customer.

revenue consists primarily of:

fees from the facilitation of buyer generated purchase orders to suppliers, billed monthly;

service fees associated with providing vendors of pharmaceutical products with data analysis of their catalogues and branding of

their products or company to the Company’s registered buyers, billed monthly or as a one-time fee;

Software-as-a-Service

(“SaaS”) fees for a platform for virtual healthcare provider visits, billed monthly.

for the Company’s services that are billed monthly are recognized and invoiced when the at the beginning of the month.

for our products are recognized and invoiced when the product is shipped to the customer.

for one-time services are recognized at the point in time when services are rendered.

terms for products and services are generally 0 to 60 days and the Company has no contract assets or liabilities.

following table presents disaggregated revenue by major product and service categories during the years ended December 31, 2023,

OF DISAGGREGATED REVENUE

Years ended December 31,

Product revenues

Pharmaceutical product resale

Packaged food resale

Total product revenue

Service revenues

Transaction fee income

Data service fee income

SaaS fee income

Total service revenue

Total revenues

Payment terms for products and services are generally

0 to 60 days and the Company has no contract assets or liabilities.

Revenues for the years ended December 31, 2024 and 2023 were $ 136,643 and

$ 1,363,830 , respectively.

6 – INVENTORY

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

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

As of December

31, 2024 and 2023, inventory was comprised of the following:

As of December 31,

Raw materials

Finished goods

7 – NOTES RECEIVABLE

expenses and other current assets included $ 750,000 in deposits for future inventory was written off during the year ended December 31,

7 – NOTES RECEIVABLE – RELATED PARTY

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

LLC and entered into the APS MIPA and CSP MIPA for the Company to sell APS and CSP and entered into a Master Service Agreement (“Wood

The Wood Sage Note bears no interest and is due and payable within thirty days of a change in control, as defined by

the Wood Sage Note, of the borrower.

As of December 31, 2023, the outstanding balance of the Wood Sage Note was $ 1,300,000 .

8 – INTANGIBLE ASSETS

of December 31, 2023, intangible assets, net consisted of the following:

OF INTANGIBLE ASSETS NET

Developed technology

$ ( 814,790 )

December 31, 2023

December 31, 2022

Amortization expense

Total Amortization Expense

9 – OTHER CURRENT LIABILITIES

of December 31, 2023 and December 31, 2022, other current liabilities consisted of the following:

OF OTHER CURRENT LIABILITIES

Insurance refunds payable

Deferred revenue

Other payables

Other current liabilities

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

As of both December 31, 2024 and 2023, the outstanding balance

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

8 – GOODWILL AND INTANGIBLE ASSETS

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

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

The identified intangible assets were determined to be product

technologies, and were valued accordingly by each product candidate:

OF INTANGIBLE ASSETS WERE DETERMINED TO BE PRODUCT TECHNOLOGIES

Product Candidate

expects SCN-102 to achieve regulatory approval in late 2024, with product commercialization projected to begin in 2025.

expects SCN-104 to achieve regulatory approval in late 2025 or early 2026, with product commercialization projected to begin in 2026.

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

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

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

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

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

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

The MPEEM utilized revenue and cash flow projections

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

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

and 3% contributory asset charge rate.

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

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

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

of each of the product technologies.

of December 31, 2024, the Company has not begun amortizing any of the product technology intangible assets.

9 – CONTINGENT FUNDING LIABILITIES

December 13, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 150,000

to purchase $ 214,500 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 7,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

As of December 31, 2023, the balance of the payable balance is $ 144,231 .

(the “December Receivables Agreement”).

Pursuant to the December Receivables Agreement, the third party agreed to fund the

Company $ 150,000 to purchase $ 214,500 of future receivables.

The Company also paid $ 7,500 as a one-time origination fee in connection

with the December Receivables Agreement.

This agreement was fully paid off in February 2024.

November 22, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 275,000

to purchase $ 393,250 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 13,750 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

As of December 31, 2023, the balance of the payable balance is $ 222,115 .

(the “November Receivables Agreement”).

Pursuant to the November Receivables Agreement, the third party agreed to fund the

Company $ 275,000 to purchase $ 393,250 of future receivables.

The Company also paid $ 13,750 as a one-time origination fee in connection

with the November Receivables Agreement.

This agreement was fully paid off in February 2024.

October 25, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 1,200,000

to purchase $ 1,728,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 60,000 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

As of December 31, 2023, the balance of the payable balance is $ 880,000 .

June 27, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 1,250,000

to purchase $ 1,800,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 62,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

This agreement was fully paid off in October 2023.

March 14, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 875,000

to purchase $ 1,224,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 42,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

This agreement was fully paid off in June 2023.

September 14, 2022, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future

receivables (the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company

$ 275,000 to purchase $ 396,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the

receivables of Trxade Inc.

The Company also paid $ 15,000 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes

customary events of default.

This agreement was fully paid off in January 2023.

June 27, 2022, the Company entered into a non-recourse funding agreement with a third-party funder for the purchase and sale of future

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 550,000 to purchase $ 792,000 of future

Under the funding agreement, the third-party receives a priority interest in the receivables of Trxade Inc.

also paid $ 27,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables Agreement also allows for

the third-party funder to file UCCs securing their interest in the receivables and includes customary events of default.

This agreement

was fully paid off in January 2023.

(the “October Receivables Agreement”).

Pursuant to the October Receivables Agreement, the third party agreed to fund the

Company $ 1,200,000 to purchase $ 1,728,000 of future receivables.

The Company also paid $ 60,000 as a one-time origination fee in connection

with the October Receivables Agreement.

This agreement was fully paid off in February 2024.

Company’s relationship with the funding source meets the criteria in ASC 470-10-25 – Sales of Future Revenues or Various

12 unchanged sentences

as an adjustment to the effective yield.

As of December 31, 2023, and December 31, 2022, the total contingent funding liability was $ 1,246,346

As of December 31, 2024, and 2023, the total contingent funding liability was

$ 0 and $ 1,246,346 respectively, and the effective interest rate was approximately 0 % and 31 %, respectively.

This rate represents the discount

rate that equates the estimated future cash flows with the fair value of the debt and is used to compute the amount of interest to be

recognized each period.

This rate represents the

discount rate that equates the estimated future cash flows with the fair value of the debt and is used to compute the amount of interest

to be recognized each period.

Any future payments made to the funding source will decrease the contingent funding liability balance accordingly.

11 – NOTES PAYABLE

November 17, 2023, the Company issued promissory notes to Moku Foods, Inc.

(the “Moku Foods November 2023 Note”) in the amount

of $ 50,000 .

The promissory note accrues interest at 11.5 % per annum, compounded monthly and is payable upon demand at any time after

November 30, 2023.

As of December 31, 2023, the balance of the Moku Foods October 2023 Note is $ 50,000 .

The Company has accrued interest

of $ 945 as of December 31, 2023.

October 16, 2023, the Company issued promissory notes to Moku Foods, Inc.

10 – CONVERTIBLE DEBT AND NOTES PAYABLE

Debenture – Arena

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

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

Under the Securities Purchase Agreement, the Company will issue 10 % original issue discount secured convertible debentures (“Debentures”)

in a principal amount of up to $ 12,222,222 , divided into up to three separate tranches that are each subject to certain closing conditions.

The conversion price per share of each Debenture is equal to 92.5 % of the lowest daily VWAP (as defined in the Debentures) of the Company’s

shares of common stock during the five trading day period ending on the trading day immediately prior to delivery or deemed delivery

of the applicable conversion notice, subject to adjustments related to the trading price of the Company’s common stock.

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

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

The First Closing Debentures

were sold to the Arena Investors for a purchase price of $ 3,000,000 , representing an original issue discount of ten percent ( 10 %).

convertible debenture will be matured eighteen months from the date first closing.

First Closing Debentures contain customary events of default.

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

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

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

to limited exceptions set forth in the First Closing Debentures, the First Closing Debentures prohibit the Company and, as applicable,

its subsidiaries from incurring any new indebtedness that is not subordinated to the Arena Investors and, as applicable, any subsidiary’s

obligations in respect of the First Closing Debentures until the First Closing Debentures are paid in full.

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

to each Arena Investor participating in the First Closing its pro rata portion of the 55,000 shares of common stock (the “SPA Commitment

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

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

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

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

Company agreed, pursuant to a Security Agreement, dated November 25, 2024 (the “Security Agreement”), to grant the Arena

Investors a security interest in all of its assets to secure the prompt payment, performance, and discharge in full of all of the Company’s

obligations under the Debentures.

In addition, the Company’s wholly-owned subsidiary, Scienture, LLC, entered into a Guarantee

Agreement, dated November 25, 2024 (the “Guarantee”), with the Arena Investors, pursuant to which it agreed to guarantee

the prompt payment,

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

unless there is an Event of Default, in which case Default Interest shall accrue and be paid instead of PIK Interest.

The PIK Interest

shall be added to the outstanding principal amount of this Debenture on a monthly basis as additional principal obligations hereunder

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

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

The Company will not issue additional debentures to represent

the PIK Interest.

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

accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and

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

the year ended December 31, 2024, the Company accrued $ 33,333 in interest expense pertaining to the Arena debentures.

a result of the debentures, the Company recognized an aggregate debt discount of $ 3,333,333 .

Through December 31, 2024, $ 869,692

of the debt discount was amortized to interest expense.

At December 31, 2024, the outstanding balance of the debentures, including

the outstanding principal of $ 3,333,333 less

the unamortized discount of $ 2,721,058 ,

was $ 612,275 .

The following is a summary of the Arena Debentures:

OF THE ARENA DEBENTURES

Convertible debenture - Arena Principal

Original issuance discount

Other issuance costs

Fair value of shares issued

Derivative liability recognized as debt discount

( 2,477,217 )

Excess debt discount amortization at issuance

Amortization of debt discount

Arena note, net of unamortized

debt discount, at December 31, 2024

Company evaluated the terms of the conversion features of the debentures as noted above in accordance with ASC Topic No.

815 - 40, Derivatives

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

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

The notes contain an indeterminate

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

Therefore, the Company bifurcated the conversion

feature and accounted for it as a separate derivative liability.

Upon issuance of the convertible debenture, the Company recognized a

derivative liability at a fair value of $ 2,477,217 , which is recorded as a debt discount and will be amortized over the life of the debentures.

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

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

The valuation of the derivative liability uses assumptions

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

The Company assesses these assumptions

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

the fair value of the contingent consideration liability related to updated assumptions and estimates are recognized within the statements

of operations.

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

OF DERIVATIVE LIABILITY TABLE TEXT BLOCK

Risk-free interest rate

Expected term (in years)

Expected volatility

Expected dividend yield

following is a summary of the derivative liability:

OF THE DERIVATIVE LIABILITY LIABILITY

Outstanding as of December 31, 2023

Issuance of embedded derivative

Change in fair value

Outstanding as of December 31, 2024

Convertible Debt

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

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

The debt accrues interest at a per annum rate equal to the Prime

Rate (as defined in the NVK Loan Agreement) plus 7 percent and the prime rates are adjusted quarterly.

As of December 31, 2024, the interest

rate was 15.50 %.

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

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

The principal is

entirely repayable on the maturity date in September 2025 and interest shall be paid monthly following a Qualified Financing (as defined

in the NVK Loan Agreement).

The NVK debt is convertible into common stock of Scienture at a fully-diluted Scienture valuation of $ 60,000,000 .

The balance of the NVK debt upon the Scienture Merger and at December 31, 2024 was $ 2,000,000 .

Interest expense on the NVK debt was $ 231,639

for the year ended December 31, 2024.

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

Company will be 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 shall be 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

During the year ended December 31, 2024, the Company incurred $ 43,200 in interest expense pertaining to the note.

issuance date of these financial statements, the note is still outstanding and the parties are working on an extension.

connection with the note, 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.

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 , of which $ 42,755 was amortized through December 31, 2024.

payable, net of unamortized discount of $ 74,577 , was $ 285,423 as of December 31, 2024.

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

OF THE COMPANY’S DEBT

debt discount

of December 31, 2024

debt discount

Convertible debenture - Arena

$ ( 2,721,058 )

August 2024 note

Scienture convertible

( 2,795,635 )

Current maturity of debt

long-term debt

$ ( 2,721,058 )

November 17, 2023, the Company issued a promissory note to Moku Foods, Inc.

(the “Moku Foods November 2023 Note”) in the

amount of $ 50,000 .

The promissory note accrues interest at 11.5 % per annum, compounded monthly and is payable upon demand at any time

after November 30, 2023.

As of December 31, 2023, the balance of the Moku Foods November 2023 Note was $ 50,000 .

The Company has accrued

interest of $ 945 as of December 31, 2023.

On March 5, 2024, the Company entered into the Superlatus SPA, whereby the Company sold its

entire interest in Superlatus to Superlatus Foods, Inc.

thereby transferring all assets and liabilities.

October 16, 2023, the Company issued a promissory note to Moku Foods, Inc.

(the “Moku Foods October 2023 Note”) in the amount

2 unchanged sentences

October 31, 2023.

As of December 31, 2023, the balance of the Moku Foods October 2023 Note is $ 150,000 .

As of December 31, 2023, the balance of the Moku Foods October 2023 Note was $ 150,000 .

The Company has accrued interest

of $ 4,300 as of December 31, 2023.

September 27, 2023, the Company issued promissory notes to Perfect Day, Inc.

On March 5, 2024, the Company entered into the Superlatus SPA, whereby the Company sold its entire

interest in Superlatus to Superlatus Foods, Inc.

thereby transferring all assets and liabilities.

September 27, 2023, the Company issued a promissory note to Perfect Day, Inc.

(the “Perfect Day Note”) in the amount of $ 4,400,000

4 unchanged sentences

in control, as defined in the agreement.

September 14, 2023, the Company issued a promissory note to Danam Health, Inc.

(the “Danam Note”) in the amount of $ 300,000 .

On March 5, 2024, the Company entered into the Superlatus SPA, whereby the Company sold its

entire interest in Superlatus to Superlatus Foods, Inc.

thereby transferring all assets and liabilities.

September 14, 2023, the Company issued a promissory note to Wellgisitcs (the “Wellgistics Note”) in the amount of $ 300,000 .

The Company received a deposit of $ 200,000 on September 14, 2023, and an additional deposit of $ 100,000 on October 13, 2023.

The Wellgisitcs

Note accrues interest at 0 % per annum and is due and payable no later than 30 days after a change in control of borrower, as defined

in the note agreement.

As of December 31, 2023, the balance of the Danam Note is $ 50,000 .

As of December 31, 2023, the balance of the Wellgistics Note was $ 50,000 .

The Wellgistics Note was fully paid

off in February 2024.

June 16, 2023, the Company issued a secured debenture to Eat Well Investment Group, Inc.

5 unchanged sentences

as of October 31, 2023.

The Eat Well June 2023 matured on December 31, 2023 .

As of December 31, 2023, the balance of the Eat Well June

2023 Note is $ 1,150,000 .

The Eat Well June 2023 Note matured on December 31, 2023 .

As of December 31, 2023, the balance of the Eat Well

June 2023 Note was $ 1,150,000 .

The Company has accrued interest of $ 23,063 as of December 31, 2023.

As of the date of this filing, the parties

are working on an amendment for an extension.

On March 5, 2024, the Company entered

into the Superlatus SPA, whereby the Company sold its entire interest in Superlatus to Superlatus Foods, Inc.

thereby transferring all

assets and liabilities.

February 8, 2023, Sapientia, a wholly-owned subsidiary of Superlatus, entered into a Loan Agreement with Eat Well Investment Group, Inc.

2 unchanged sentences

at a rate of 1.87 % per annum, and matures February 7, 2025 .

As of December 31, 2023, the balance of the Eat Well February 2023 Note is

As of December 31, 2023, the balance of the Eat Well February 2023 Note was

The Company has accrued interest of $ 418 as of December 31, 2023.

September 14, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well September 2022

Note”) in the amount of $ 50,000 .

The Eat Well September 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum,

and matures September 13, 2024 .

As of December 31, 2023, the balance of the Eat Well September 2022 Note is $ 50,000 .

The Company has

accrued interest of $ 1,212 as of December 31, 2023.

July 26, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well July 26, 2022 Note”)

in the amount of $ 35,000 .

The Eat Well July 26, 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures July

As of December 31, 2023, the balance of the Eat Well July 26, 2022 Note is $ 35,000 .

The Company has accrued interest of $ 938

as of December 31, 2023.

July 12, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well July 12, 2022 Note”)

in the amount of $ 25,000 .

The Eat Well July 12, 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures July

As of December 31, 2023, the balance of the Eat Well July 12, 2022 Note is $ 25,000 .

The Company has accrued interest of $ 688

as of December 31, 2023.

March 15, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well March 2022 Note”)

in the amount of $ 100,000 .

The Eat Well March 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures March

As of December 31, 2023, the balance of the Eat Well March 2022 Note is $ 100,000 .

The Company has accrued interest of $ 3,361

as of December 31, 2023.

February 1, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well February 2022 Note”)

in the amount of $ 100,000 .

The Eat Well February 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures February

As of December 31, 2023, the balance of the Eat Well February 2022 Note is $ 100,000 .

The Company has accrued interest of $ 3,576

as of December 31, 2023.

January 20, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well January 2022 Note”)

in the amount of $ 20,000 .

The Eat Well January 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures January

As of December 31, 2023, the balance of the Eat Well January 2022 Note is $ 20,000 .

The Company has accrued interest of $ 728

as of December 31, 2023.

December 24, 2021, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well December 2021 Note”)

in the amount of $ 100,000 .

The Eat Well December 2021 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matured December

As of December 31, 2023, the balance of the Eat Well December 2021 Note is $ 100,000 .

The Company has accrued interest of $ 3,776

as of December 31, 2023.

As of the date of this filing, the parties are working on an amendment for an extension.

November 10, 2021, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well November 2021 Note”)

in the amount of $ 50,000 .

The Eat Well November 2021 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matured November

As of December 31, 2023, the balance of the Eat Well November 2021 Note is $ 50,000 .

The Company has accrued interest of $ 2,001

as of December 31, 2023.

As of the date of this filing, the parties are working on an amendment for an extension.

August 18, 2021, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well August 2021 Note”)

in the amount of $ 250,000 .

The Eat Well August 2021 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matured August

As of December 31, the balance of the Eat Well August 2021 Note is $ 250,000 .

The Company has accrued interest of $ 11,079 as

of December 31, 2023.

As of the date of this filing, the parties are working on an amendment for an extension.

following table summarizes notes payable balances as of December 31, 2023:

NOTES PAYABLE BALANCES

Current Portion

Non current Portion

Payable Total

Accrued Interest

Perfect Day Notes

Moku Foods November 2023 Note

Moku Foods October 2023 Note

Eat Well June 2023 Note

Eat Well February 2023 Note

Eat Well September 2022 Note

Eat Well July 26, 2022 Note

Eat Well July 12, 2022 Note

Eat Well March 2022 Note

Eat Well February 2022 Note

Eat Well January 2022 Note

Eat Well December 2021 Note

Eat Well November 2021 Note

Eat Well August 2021 Note

NOTE 12 – INCOME TAXES

provision for income taxes on income from operations for fiscal 2023 and 2022 consists of the following:

OF PROVISION FOR INCOME TAXES

(loss) before income taxes for the years ended December 31, 2023 and 2022 consisted of the following:

(LOSS) BEFORE INCOME TAXES

the year ended December 31,

( 17,843,574 )

( 3,909,868 )

a result of the full net valuation allowance position, the Company did not recognize any U.S.

federal income tax expense or tax benefit

on any components of continuing or discontinued operations.

OF DEFERRED TAX ASSETS AND LIABILITIES

operating Losses

Deferred Tax Assets

Tax Liabilities

to Use Assets

Deferred Tax Liabilities

( 5,936,557 )

( 4,030,755 )

Deferred Taxes

Company has established a valuation allowance equal to the full amount of the deferred tax asset primarily due to uncertainty in the

utilization of the net operating loss carry forwards.

estimated net operating loss carry forwards of approximately $ 24,893,624 will be available based on the new carryover rules in section

172(a) passed with the Tax Cuts and Jobs Acts.

On March 5, 2024, the Company entered into the Superlatus

SPA, whereby the Company sold its entire interest in Superlatus to Superlatus Foods, Inc.

thereby transferring all assets and liabilities.

11 – STOCKHOLDERS’ EQUITY

Designation of Series C Preferred Stock

Effective October 4, 2023, the Company filed a Certificate

of Designation, Preferences, Rights and Limitations of the Series C Preferred Stock with the Secretary of the State of Delaware which

designated 1,000 shares of the Company’s authorized and unissued preferred stock as convertible Series C Preferred Stock at a par

value of $ 0.00001 per share.

of Series X Preferred Stock

July 25, 2024, the Company revoked the authorization to issue shares of the Company’s Series A Preferred Stock, par value $ 0.00001

per share (the “Series A Preferred Stock”).

Concurrently with revoking the Company’s authority to issue Series A Preferred

Stock, the Company authorized the issuance of up to 9,211,246 shares of the Series X Preferred Stock, a 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, at the Effective Time of First Merger, the shares of Scienture common stock issued and outstanding immediately

prior to the Effective Time were converted into the right to receive, in the aggregate, (i) 291,536 shares of the Company’s common

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

common stock.

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

of Series C Preferred Stock

October 4, 2023, the Company filed a Certificate of Designation, Preferences, Rights and Limitations of the Series C Preferred Stock

with the Secretary of the State of Delaware which designated 1,000 shares of the Company’s authorized and unissued preferred stock

as convertible Series C Preferred Stock at a par value of $ 0.00001 per share.

Global Ventures Stock Purchase Agreement

On October 4, 2023, the Company entered into a Securities Purchase Agreement

(“Agreement”, or “SPA”) with Hudson Global Ventures, LLC (“Hudson”).

Under the terms of the Agreement,

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.

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

of Series B Preferred Stock

6 unchanged sentences

the Nasdaq Listing Rule 5550(a)(2) to have the price of the stock above $ 1 .

Equity Compensation Awards

September 1, 2022, the Board of Directors and Compensation Committee of the Company, with the approval of each of the following officers,

agreed to reduce the annual cash compensation payable to Suren Ajjarapu, the Company’s Chief Executive Officer;

Prashant Patel,

the Company’s President and Chief Operating Officer and Janet Huffman, the Company’s former Chief Financial Officer, in an

effort to conserve cash.

lieu of the reduced cash salary payable to each officer, the Board and Compensation Committee agreed to issue such officers shares of

the Company’s common stock equal to the amount of reduced cash salary, divided by the closing sales price of the Company’s

common stock on the NASDAQ Capital Market on August 31, 2022, the date approved by the Board of Directors.

The total amount of shares

of common stock issued on August 31, 2022, to the officers was 5,460 .

shares of common stock issuable to the officers vested at the rate of 1/4th of such shares on each of September 30, 2022, October 31,

2022, November 30, 2022, and December 31, 2022, subject to each applicable Officer’s continued service to the Company on such dates

and subject to the restricted stock award agreements entered into as evidence of such awards.

certain employees of the Company agreed to reduce their cash salaries by an aggregate of $ 37,000 in consideration for an aggregate of

2,126 shares of the Company’s restricted common stock, with the same vesting terms as the officer shares discussed above.

on August 31, 2022, the Board of Directors approved the issuance of 3,635 shares of common stock of the Company to each independent member

of the Board of Directors, for services rendered to the Company during fiscal 2022, which shares were valued at $ 63,250 , based on the

closing sales price of the Company’s common stock on the date approved by the Board of Directors.

The shares vested at the rate

of 1/4th of such shares immediately on the grant date, and 1/4th of such shares on each of October 1, 2022, January 1, 2023, and April

1, 2023, subject to each applicable independent director’s continued service to the Company on such dates.

the year ended December 31, 2024, the Company issued 490,698 shares of common stock for services.

The fair value of shares issued for

services was $ 4,598,294 and was included in general and administrative expenses in the consolidated statements of operations.

the year ended December 31, 2024, a warrant holder exercised a warrant and acquired 28,487 shares of common stock for $ 16,567 in proceeds

(see Note 13).

the year ended December 31, 2024, an options holder exercised an option and acquired 2,371 shares of common stock for $ 9,840 in proceeds

(see Note 14).

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

July 25, 2024, the Company issued 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock pursuant to the Scienture

Merger Agreement.

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

August 2024, the Company issued 28,571 shares of common stock pursuant to the exercise of warrants.

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

Note Commitment Shares

additional consideration for the Purchaser’s execution and delivery of this Agreement, (i) concurrently with the execution and

delivery of this Agreement on the First Closing Date (as defined below), the Company shall cause the Transfer Agent, to issue to each

Purchaser participating in the first Closing or its designee on the First Closing Date its pro rata portion of 55,000 of the shares of

Common Stock being issued as Commitment Shares in connection with the First Closing, and (ii) in connection with any Closing following

the First Closing, the Company shall cause its Transfer Agent to issue to each Purchaser participating in such Closing or its designee

a certain number of Commitment Shares.

The aggregate number of Commitment Shares owing to each Purchaser in connection with any Closing

following the First Closing will be agreed among the Company and the Purchasers participating in such Closing, and shall be set forth

in an allocation table prior to such Closing (each a “Commitment Shares Allocation Table.”) For the avoidance of doubt, all

of the Commitment Shares issuable in connection with the First Closing on the First Closing Date shall be fully earned as of the First

Closing Date regardless of whether a Subsequent Closing shall occur (see Note 10).

this connection, the Company issued to each Arena Investor participating in the First Closing its pro rata portion of 55,000 shares of

the Company’s common stock.

The fair value of shares issued was $ 420,200 was recognized as a debt discount, which was amortized

to interest expense in full as commitment shares in connection with first closing was fully earned as of first closing date.

Line of Credit

November 25, 2024, the Company entered into a purchase agreement (“ELOC Agreement”) with Arena Business Solutions Global

SPC II, Ltd (the “Investor”).

Under the ELOC Agreement, the Company has the right, but not the obligation, to direct the

Investor to purchase up to $ 50,000,000 in shares of the Company’s common stock (the “ELOC Shares”) upon satisfaction

of certain terms and conditions contained in the ELOC Agreement, including, without limitation, and additional shares to be sold to the

Investor from time to time under the ELOC Agreement.

The term of the ELOC Agreement began on the date of execution and ends on the earlier

of (i) the first day of the month following the 36-month anniversary of the execution date, (ii) the date on which the Investor shall

have purchased the maximum amount of ELOC Shares, or (iii) the effective date of any written notice of termination delivered pursuant

to the terms of the ELOC Agreement (the “Commitment Period”).

consideration for the Investor’s execution and delivery of the ELOC Agreement, the Company agreed to issue to the Investor, as

a commitment fee:

(i) 70,000 shares of the Company’s Common Stock (“Initial Commitment Fee Shares”) and (ii) in two

separate tranches, a number of additional shares of common stock (“Additional Commitment Fee Shares” and, together with the

Initial Commitment Fee Shares, the “Commitment Fee Shares”) equal to (a) with respect to the first tranche, 500,000 divided

by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding the effectiveness

of the initial registration statement on which the Commitment Fee Shares are registered (the “Effectiveness Date”) and (b)

with respect to the second tranche, 500,000 divided by the simple average of the daily VWAP of our common stock during the five (5) trading

days immediately preceding the two (2) month anniversary of the Effectiveness Date.

The Additional Commitment Fee Shares shall be subject

to a true-up after each issuance pursuant to the terms of the ELOC Agreement.

consideration for the Investor’s execution and delivery of the ELOC Agreement, the Company issued to the Investor, as a commitment

fee, 70,000 shares of the Company’s common stock on November 25, 2024.

The fair value of shares issued was $ 534,800 and was included

in deferred offering costs in the consolidated balance sheets.

Cash Dividend

March 6, 2024, the Company announced the declaration of a special cash dividend of eight dollars ($ 8.00 ) per share of common stock, payable

to stockholders of record as of March 18, 2024, with the dividend being paid on March 22, 2024.

The special dividend of $ 12,671,072 (in

the aggregate) was paid using a portion of the proceeds from the closing of the sale of certain assets to MMS.

July 9, 2024, the Company announced the declaration of a special cash dividend of one dollar and fifty cents ($ 1.50 ) per share of common

stock, payable to stockholders of record as of July 19, 2024, with the dividend being paid on July 22, 2024.

The special dividend of

$ 2,187,759 was paid using a portion of the proceeds received in May 2024 in connection with the sale of certain assets to MMS.

Compensation Awards

independent member of the Company’s board of directors (the “Board”) is to receive an annual grant of restricted common

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

and valued on such same date, based on the closing sales price on such date (or the first business day thereafter), which restricted

stock awards will vest at the rate of 1/4th of such awards over the following four calendar quarters, subject to such directors continued

service to the Company.

on August 13, 2023, the Board approved the issuance of 24,444 shares of common stock of the Company to each of Mr.

(who each at the time of issuance were members of the Board) for services rendered to the Company during fiscal 2023, which shares were

valued at $ 110,000 .

The Board also approved the issuance of 14,056 shares of common stock of the Company to Jeff Newell (who, at the

time of issuance was a member of the Board) for services rendered during fiscal 2023, which were valued at $ 63,250 based on the most

recent close price of the Company’s common stock on the date approved by the Board.

The shares vest at the rate of 1/4th of such

shares immediately on the grant date, and 1/4th of such shares on each of October 1, 2023, January 1, 2024 and April 1, 2024, subject

to each applicable independent director’s continued service to the Company on such dates.

Additionally, the Board approved 10,000

shares with immediate vesting to each Board member to recognize the significant additional work for various financing, sales, acquisitions,

operations restructuring.

of the awards discussed above were issued under the Company’s Second Amended and Restated 2019 Equity Incentive Plan (the “Plan”)

and all restricted stock awards discussed above were evidenced by Restricted Stock Grant Agreements.

Company’s board of directors and stockholders approved an amendment to the Plan increasing the available shares under the Plan

to 5,000,000 shares of the Common Stock as such common stock existed on July 24, 2024.

12 – PREFUNDED AND PRIVATE PLACEMENT WARRANTS

October 4, 2022 the Company entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional

investor (the “Purchaser”) which provided for the sale and issuance by the Company of (i) the Company’s common stock

(the “Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) and (iii) warrants (the “Private

Placement Warrants” and, together with the Shares and the Pre-Funded Warrants, the “Securities”).

The Private Placement

Warrants were sold in a concurrent private placement (the “Private Placement”).

Simultaneously

with the closing of the stock placement, the investor pre-purchased 40,116 Private Warrants at a purchase price of $ 17.25 per warrant.

The Pre-Funded Warrants are immediately exercisable into one share of common stock per warrant, have an exercise price of $ 0.00015 per

share, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

On January 4, 2023, the investor

exercised the 40,116 warrants for a purchase price of $ 6.02 .

The investor was issued the shares on this date.

Each Private Warrant has

an exercise price of $ 22.50 per share, will be exercisable following Stockholder Approval, which was obtained in December 2022, and will

expire on the fifth anniversary of the date on which the Private Warrants become exercisable.

The Private Warrants contain standard adjustments

to the exercise price including for stock splits, stock dividend, rights offerings and pro rata distributions, and include full ratchet

anti-dilutive rights in the event the Company issues shares of Common Stock or Common Stock equivalents within fifteen months of the

initial exercise date, with a value less than the then exercise price of such Private Warrants, subject to certain customary exceptions,

and further subject to a minimum exercise price of $ 3.48 per share.

The Private Warrants also include certain rights upon ‘fundamental

transactions’ as described in the Private Warrants, including allowing the holders thereof to require that the Company re-purchase

such Private Warrants at the Black Scholes Value of such securities.

October 4, 2022 the Company entered into a securities purchase agreement (the “2022 SPA”) with an institutional investor

(the “Purchaser”) which provided for the sale and issuance by the Company of (i) the Company’s common stock, (ii) pre-funded

warrants (the “Pre-Funded Warrants”) and (iii) warrants (the “Private Placement Warrants” and, together with

the shares of common stock and the Pre-Funded Warrants, the “Securities”).

January 4, 2023, the investor exercised the Pre-Funded Warrants for a purchase price of $ 6.02 .

The investor was issued the shares on

Each Private Placement Warrant has an exercise price of $ 22.50 per share and is exercisable following the stockholder approval

obtained in December 2022, and will expire on the fifth anniversary of the date on which the Private Placement Warrants became exercisable.

The Private Placement Warrants contain standard adjustments to the exercise price including for stock splits, stock dividend, rights

offerings and pro rata distributions, and include full ratchet anti-dilutive rights in the event the Company issues shares of Common

Stock or Common Stock equivalents within fifteen months of the initial exercise date, with a value less than the then exercise price

of such Private Placement Warrants, subject to certain customary exceptions, and further subject to a minimum exercise price of $ 3.48

The Private Placement Warrants also include certain rights upon ‘fundamental transactions’ as described in the

Private Placement Warrants, including allowing the holders thereof to require that the Company re-purchase such Private Placement Warrants

at the Black Scholes Value of such securities.

13 – WARRANTS

the year ended December 31, 2023, 41,193

warrants were granted, and none

During the year ended December 31, 2023, 40,116

prefunded warrants and 1,795

granted warrants to purchase shares of common stock were exercised for a total purchase price of $ 1,621 .

See Note 13 for further description.

the year ended December 31, 2024, 28,487 warrants to purchase shares of common stock were exercised for a total purchase price of $ 16,567

(see Note 11).

connection with a note (see Note 10), in August 2024 the Company issued 76,923 warrants to purchase common stock.

The warrants have an

exercise price of $ 9.36 per share, are immediately exercisable and have a term of 5 years.

In August 2024, the holder exercised 28,571

warrants for shares of commons stock on a cashless basis.

Company uses the Black-Scholes pricing model to estimate the fair value of stock-based awards on the date of the grant.

was no compensation cost related to the warrants for the years ended December 31, 2023, and 2022, respectively.

following table summarizes the assumptions used to estimate the fair value of the outstanding warrants during the years ended December

31, 2023, and 2022.

SUMMARY OF ASSUMPTIONS USED TO ESTIMATE FAIR VALUE OF WARRANTS GRANTED

Expected dividend yield

Weighted-average expected volatility

Weighted-average risk-free interest rate

Warrants, measurement input

Expected life of warrants

cost related to the warrants for the year ended December 31, 2024, and 2023 was $ 71,332 and $ 0 , respectively.

of December 31, 2024 and 2023, the Company remeasured the fair value of warrants outstanding at $ 919,935 and 736,953 , respectively.

connection with remeasurement of warrants, a loss of $ 182,982 and $ 148,420 was recognized during the years ended December 31, 2024 and

2023, respectively, as the change in fair value of warrant liability.

Company’s outstanding and exercisable warrants, as of December 31, 2024 and 2023, are presented below:

SCHEDULE OF OUTSTANDING AND EXERCISABLE WARRANTS

Exercise Price

OF OUTSTANDING AND EXERCISABLE WARRANTS

Average Exercise Price

Life In Years

10 unchanged sentences

Company maintains stock option plans under which certain employees are awarded option grants based on a combination of performance and

The stock option plans provide for the grant of up to 155,556 shares, and the Company’s Second Amended and Restated 2019

Equity Incentive Plan provides for automatic increases in the number of shares available under such plan (currently 133,333 shares) on

April 1 st of each calendar year, beginning in 2021 and ending in 2029 (each a “Date of Determination”), in each

case subject to the approval and determination of the administrator of the plan (the Board of Directors or Compensation Committee) on

or prior to the applicable Date of Determination, equal to the lesser of (A) ten percent (10%) of the total shares of common stock of

the Company outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined

by the administrator.

The administrator as a result of the annual meeting shareholder vote increased the number of shares available to

grant to employees under the 2019 incentive plan by 2 million.

The administrator did not approve an increase in the number of shares

covered under the plan as of April 1, 2022.

the year ended December 31, 2023, 9,053 options to purchase shares were granted, 140 options to purchase shares were forfeited

and 2,393 options expired.

For the year ended December 31, 2023, no options to purchase shares of common stock were exercised.

The stock option plans provide for the grant of up to 155,556 shares, and the Plan provides for automatic increases in the number

of shares available under such plan (currently 133,333 shares) on April 1 st of each calendar year, beginning in 2021 and ending

in 2029 (each a “Date of Determination”), in each case subject to the approval and determination of the administrator of

the plan (the Board of Directors or Compensation Committee) on or prior to the applicable Date of Determination, equal to the lesser

of (A) ten percent (10%) of the total shares of common stock of the Company outstanding on the last day of the immediately preceding

fiscal year and (B) such smaller number of shares as determined by the administrator.

The administrator as a result of the annual meeting

shareholder vote increased the number of shares available to grant to employees under the Plan by 2,000,000.

The administrator did not

approve an increase in the number of shares covered under the Plan as of April 1, 2022.

Company’s board of directors and stockholders approved an amendment to the Plan increasing the available shares under the Plan

to 5,000,000 shares of the Common Stock as such common stock existed on July 24, 2024.

the year ended December 31, 2024, no options to purchase shares were granted.

For the year ended December 31, 2024, 2,371 options to

purchase shares of common stock were exercised for $ 9,840 in cash (see Note 12).

compensation cost related to stock options granted was $ 25,584 and $ 29,738 for the years ended December 31, 2024, and 2023, respectively.

following table represents stock option activity for the year ended December 31, 2023:

SCHEDULE OF STOCK OPTION ACTIVITY

following table represents stock option activity for the years ended December 31, 2024 and 2023:

OF STOCK OPTION ACTIVITY

Weighted-Average

1 unchanged sentence

Weighted-Average

Life in Years

Options outstanding as of December 31, 2021

Options exercisable as of December 31, 2021

Options granted

Options forfeited

Options expired

Options exercised

Options outstanding as of December 31, 2022

Options exercisable as of December 31, 2022

Options granted

Options forfeited

Options expired

Options exercised

Options outstanding as of December 31, 2023

Options exercisable as of December 31, 2023

Contractual Life in Years

outstanding as of December 31, 2022

exercisable as of December 31, 2022

outstanding as of December 31, 2023

exercisable as of December 31, 2023

outstanding as of December 31, 2024

exercisable as of December 31, 2024

15 – CONTINGENCIES

Defense Group, LLC

July 2020, the Company’s wholly-owned subsidiary, IPS, entered into an agreement with Studebaker Defense Group, LLC (“Studebaker”)

wherein IPS would pay Studebaker a down payment of $ 500,000 and Studebaker would deliver 180,000 boxes of nitrile gloves by August 14,

IPS wired the $ 500,000 to Studebaker, but to date, Studebaker has not delivered the gloves or provided a refund of the deposit.

In December 2020, the Company filed a complaint against Studebaker in Florida state court, Case No.

20-CA-010118 in the Circuit Court

for the Thirteenth Judicial Circuit in Hillsborough County, for among other things, breach of contract.

Studebaker did not answer the

complaint, nor did counsel for Studebaker file an appearance.

Accordingly, in February 2021, the Company filed for a default judgment;

however, on March 22, 2021, counsel for Studebaker filed an appearance and shortly thereafter filed a motion to vacate the default judgment

and dismiss the complaint on jurisdictional grounds.

The court granted Studebaker’s motion to set aside the default judgment but

denied the motion to dismiss.

At June 30, 2021, the $ 500,000 was recorded as Loss on Inventory Investment.

The Company won this case

but has not collected any settlement yet, another lawsuit was filed to collect.

April 13, 2023, a settlement was reached in the Studebaker and IPS legal case.

The court found in favor of IPS and ordered Studebaker

to pay $ 550,000 to IPS.

The payments were to commence on May 1, 2023 and continue monthly in 17 installments until the full amount is

paid in full but as of the filing date, no payment has been received by IPS.

Group Dsn Bhd and Crecom Burj Group SDN BHD

August 2020, IPS entered into an agreement with Sandwave Group Dsn Bhd (“Sandwave”), wherein IPS would pay Sandwave a down

payment of $ 581,250 and Sandwave’s supplier, Crecom Burj Group SDN BHD (“Crecom”), would deliver 150,000 boxes of nitrile

gloves within 45 days.

IPS wired the $ 581,250 to Sandwave, which in turn wired the purchase price to Crecom, which Crecom accepted;

to date, Crecom has not delivered the nitrile gloves.

IPS demanded return of its $ 581,250 and Crecom acknowledged that IPS was entitled

As of February 2021, Crecom had not returned any funds and IPS filed a complaint against Crecom in Malaysia:

WA-22NCC-55-02/2021

in the High Court of Malaysia at Kuala Lumpur in the Federal Territory, Malaysia for the Malaysian equivalent of breach of contract.

On September 1, 2022 counsel for Crecom informed the court that Crecom had been wound up on August 23, 2022;

under Section 471 of the

Malaysian Companies Act 2016, the suit filed by IPS was stayed until leave of the court is obtained to proceed.

Given this new information

regarding Crecom the Company has decided at this time to stop its pursuit of this lawsuit until or unless additional information is obtained

by counsel for IPS.

At June 30, 2021, the $ 581,250 was recorded as Loss on Inventory Investment.

November 19, 2021, IPS filed a complaint against GSG PPE, LLC (“GSG”) and Gary Waxman (“Waxman”), the owner,

alleging three counts of breach of contract for a purchase agreement, a promissory note, and a personal guaranty.

Collectively, the company

alleges that GSG and Waxman have materially breached all three contracts.

In late 2020, GSG and IPS executed a valid initial contract

setting the terms of a business transaction.

GSG failed to pay IPS approximately 75% of the amount owed to IPS.

GSG acknowledged it owed

the money and executed a promissory note in favor of IPS in the amount of $ 630,000 which matured on September 30, 2021.

The note provides

for attorney fees and interest in addition to the $ 630,000 .

Waxman’s personal guaranty confirmed that GSG owed IPS $ 630,000 .

September 30, 2021, the $ 630,000 was recorded as Bad Debt Expense.

A settlement was entered into between the parties in June 2022, whereby

GSG and Waxman agreed to pay $ 743,000 which included attorney fees and interest, which is required to be paid to the Company in monthly

installments over 17 months.

The Company received additional monthly installment payments as part of the agreement through January 2023.

As of December 31, 2023, and through the date of this filing, the Company has not received the monthly installment payments due to the

Company from GSG since January of 2023.

Company has two operating leases for corporate offices as of December 31, 2023.

The following table outlines the details of the leases:

SCHEDULE OF OPERATING LEASES

Initial Lease Term

January 2021 to December 2021

October 2018 to November 2023

October 2023 to September 2026

New Initial Lease Term

January 2022 to December 2026

November 2023 to October 2028

Initial Recognition of Right of use assets at January 1, 2019

New Initial Recognition of Right of use Assets at December 31, 2021

New Initial Recognition of Right of use Assets at December 31, 2023

Incremental Borrowing Rate

Company entered into a new corporate office lease (Lease 1) in January 2022.

At inception, the Company determined that the new lease

required remeasurement of the lease liability resulting in the increase of the right-of-use asset and the associated lease liability

by $ 977,220 .

The Company and the Lessor agreed to terminate the lease and vacate the premises in November 2023.

The termination resulted in the

surrender of the Company’s security deposit of $ 38,500 .

The related right-of-use assets of $ 642,887 and lease liabilities of

$ 664,992 were removed from the balance sheet as of December 31, 2023.

Company entered into a lease agreement (Lease 2) for the period of October 2018 to November 2023.

At inception, management had included

the renewal period from November 2023 to November 2028 within the initial recognition of the related right of use assets and lease liabilities,

as it was reasonably expected, at the time, that the renewal option would be exercised.

The Company determined that the new lease required

measurement and recognition of the lease liability and right-of-use assets of $ 313,301 .

The lease is classified as an operating lease.

No incentives were included in the lease.

Company entered into a new warehouse lease (Lease 3) October 2023.

The Company determined that the new lease required measurement

and recognition of the lease liability and right-of-use assets of $ 351,581 .

License and Commercial Agreements

entered into an exclusive license and commercial agreement with Kesin Pharma Corporation (“Kesin”) whereby Scienture granted

the exclusive license rights to commercialize SCN-102 in 2022 and SCN-104 in 2023 to Kesin (SCN-102 and SCN-104 are together referred

to as “the Products”) for use in the United States of America.

March 2024, the parties have terminated the agreement, and the parties agreed that Scienture shall pay Kesin a total gross amount of

$ 1,285,000 upon commercialization of product via a royalty arrangement

agreement also requires that if the full $1,285,900 has not been repaid within two years of the early of i) commercial launch or ii)

120 from FDA approval, then interest will accrue prospectively at a rate of 8% annually on unpaid balance.

Accordingly, Scienture recorded

a $1,285,000 termination fee liability .

As of September 30, 2024, the entire amount is outstanding.

August 2024, Kesin demanded immediate payment of the full amount under the Kesin Termination Agreement, alleging the full amount is payable

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

Scienture LLC has disputed that the

amount is payable, and the parties entered into discussions to resolve the issue.

March 11, 2025, Kesin filed a complaint against Scienture LLC in the United States District Court for the Eastern District of New York

seeking payment of the disputed $ 1.285 million.

There can be no assurance that an amicable resolution will be obtained.

Scienture LLC

intends to vigorously defend itself in the litigation.

The Company entered into a lease agreement for the period of October 2018

to November 2023.

At inception, management had included the renewal period from November 2023 to November 2028 within the initial recognition

of the related right of use assets and lease liabilities, as it was reasonably expected, at the time, that the renewal option would be

The Company determined that the new lease required measurement and recognition of the lease liability and right-of-use assets

of $ 313,301 .

The lease is classified as an operating lease.

No incentives were included in the lease.

table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years

to the lease liabilities recorded in the Consolidated Balance Sheet as of December 31, 2023.

July 25, 2024, the Company entered into and closed the Scienture Merger Agreement.

Pursuant to the Scienture Merger Agreement, the Company

acquired right of use asset value of $ 61,578 and right of use liability of $ 61,886 on the acquisition date together with all the assets

and liabilities of Scienture.

table below reconciles the fixed component of the undiscounted cash flows for and the total remaining years to the lease liabilities

recorded in the consolidated balance sheet as of December 31, 2024.

SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR OPERATING LEASE LIABILITIES

3 unchanged sentences

Present value of future minimum lease payments

current obligations under leases

current obligation

Long-term lease obligations

Weighted Average Discount Rate

Weighted Average Term Remaining

Short-Term Lease Expense Remaining

the years ended December 31, 2023, and 2022, total lease expense was $ 385,977 and $ 344,525 , respectively.

the years ended December 31, 2023, and 2022, amortization of right-of-use assets was $ 215,665 and $ 181,218 , respectively.

the years ended December 31, 2023, and 2022, net operating lease liabilities settled was $ 195,475 and $ 164,618 , respectively.

the years ended December 31, 2024, and 2023, total operating lease expense was $ 82,342 and $ 323,961 , respectively, which is included

in general and administrative expenses in the consolidated statements of operations, as well as $ 0 and $ 271,922 from discontinued operations,

respectively.

the years ended December 31, 2024, and 2023, total short-term lease expense was $ 10,978 and $ 62,016 respectively, which is included in

general and administrative expenses in the condensed consolidated statements of operations, as well as $ 750 and $ 34,000 from discontinued

operations, respectively.

17 – SEGMENT REPORTING

segments are defined as the components of an enterprise about which separate financial information is available that is evaluated regularly

by the chief operating decision makers in deciding how to allocate resources and in assessing performance.

The Company’s chief

operating decision makers direct the allocation of resources to operating segments based on the profitability, cash flows, and growth

opportunities of each respective segment.

Factors used to identify the Company’s reportable segments include

the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker

in making decisions about how to allocate resources and assess performance.

The Company’s operating segments have been broken out

based on similar economic and other qualitative criteria.

The Company operates all reporting segments in one geographical area (the United

The Company’s CEO is the chief operating decision-maker.

Company classifies its business interests into reportable segments which are:

- Web based pharmaceutical marketplace platform – B2B sales

- Integra Pharma, LLC - Licensed wholesaler of brand, generic and non-drug products – B2B sales

– holds Sapientia’s intellectual property for advanced food extrusion technology and The Urgent Company – Manufacturer

of ice cream that is animal product-free, vegan, lactose-free, and made with plants – B2B sales

- Other – corporate overhead expense, discontinued operations and Bonum Health, LLC.

SCHEDULE OF BUSINESS INTERESTS INTO REPORTABLE SEGMENTS

Years Ended December 31, 2023

( 3,872,136 )

Segment Assets

Segment Profit/Loss

- Licensed wholesaler of brand, generic and non-drug products – B2B sales

– pharmaceutical research company which is engaged in the research and development of branded pharmaceutical products

- Other – corporate overhead expense and discontinued operations.

OF BUSINESS INTERESTS INTO REPORTABLE SEGMENTS

Ended December 31, 2024

Cost of Sales

( 1,827,707 )

( 3,509,597 )

Interest expense

$ 104,853,805

Cost of Sales

Years Ended December 31, 2022

Segment Assets

Segment Profit (Loss)

Geographic information as of and for the year ended December 31, 2024 is presented below:

OF GEOGRAPHIC INFORMATION

For The Year Ended December 31, 2024

Assets as of December 31, 2024

$ 104,853,805

Ended December 31, 2023

Interest expense

Geographic information as of and for the year ended December 31, 2023 is presented below:

For The Year Ended December 31, 2023

Assets as of December 31, 2023

18 – INCOME TAXES

provision (benefit) for income taxes on income from operations for the years ended December 31, 2024 and 2023 consists of the following:

OF PROVISION FOR INCOME TAXES

Federal total

$ ( 534,396 )

Cost of Sales

the year ended December 31, 2024, the Company recorded a $ 360,016 tax provision expense pertaining to discontinued operations, which

is included within net income (loss) from discontinued operations, net of tax per the consolidated statements of operations.

The accompanying

income tax payable is included within accrued liabilities on the consolidated balance sheet.

(loss) before income taxes for the years ended December 31, 2024 and 2023 consisted of the following:

(LOSS) BEFORE INCOME TAXES

income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

The significant components of the deferred tax assets and liabilities

are as follows:

OF DEFERRED TAX ASSETS AND LIABILITIES

operating losses

research and development costs

issuance costs

Deferred tax assets

Tax Liabilities:

to use assets

Deferred tax liabilities

deferred tax asset (liability)

2023, the Company has established a valuation allowance equal to the full amount of the deferred tax asset primarily due to uncertainty

in the utilization of the net operating loss carry forwards.

As of December 31, 2024, the Company utilized all remaining valuation allowance,

resulting in a net deferred tax liability of $ 13,524,213 .

estimated net operating loss carry forwards of approximately $ 11,998,985 will be available based on the new carryover rules in section

172(a) passed with the Tax Cuts and Jobs Acts.

19 – SUBSEQUENT EVENTS

Purchase Agreement

February 16, 2024, the Company, together with Trxade, Inc., a wholly owned subsidiary of the Company, and Micro Merchant Systems, Inc.

(“MMS”) entered into an asset purchase agreement (the “APA”) under which MMS agreed to purchase for cash substantially

all of the assets of Trxade, Inc.

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

operated a web-based market platform designed to enable trading among healthcare buyers and sellers of pharmaceuticals,

accessories and services.

The purchase price paid at closing was $ 22.5 million, subject to customary adjustments for cash, indebtedness,

working capital and transaction expenses.

Subject to the terms and conditions of the APA, if, during the period beginning on the closing

date and ending on the four-month anniversary of the closing date, MMS receives $ 1.6 million or greater in certain collections from third

parties resulting from any products or services sold, or provided, by the business assets and operations acquired from Trxade, Inc.,

will be due an additional $ 7.5 million payment from MMS.

February 29, 2024, the Company’s wholly owned subsidiary Trxade, Inc.

entered into a Subscription Agreement (the “Subscription

Agreement”) with Lafayette Energy Corp., a Delaware corporation (“Lafayette”).

Pursuant to the Subscription Agreement,

will, in two equal tranches, invest a total of up to $ 5.0 million in Lafayette in exchange for up to 2,000,000 shares of

Lafayette’s newly created Series A Convertible Preferred Stock, with the second tranche becoming payable only upon Trxade, Inc.’s

receipt of notice that Lafayette has successfully drilled its first oil and gas well and produced at least one hundred (100) barrels

Michael Peterson is a director of the Company

as well as the CEO of Lafayette and a member of Lafayette’s board of directors.

This relationship was disclosed to the Company’s

Board of Directors and the audit committee of the Board of Directors prior to, and at the time that the terms of the Subscription Agreement

and the transaction effected thereby were approved by the Board of Directors as a whole and the members of the audit committee.

Purchase Agreement

March 5, 2024, the Company entered in a Stock Purchase Agreement (“SPA”) with Superlatus Foods Inc.

(the “Buyer”).

Pursuant to the SPA, the Company sold all of the issued and outstanding stock (the “Stock”) of Superlatus Inc., a Delaware

corporation and wholly-owned subsidiary of the Company (“Superlatus”), to the Buyer.

The purchase price for the Stock was

$ 1.00 which was delivered to the Company at the closing, which occurred simultaneously with the execution of the SPA.

As a result of

the transaction Superlatus is no longer a subsidiary of the Company, and the rights and assets of Superlatus together with various liabilities

and obligations that were specific to Superlatus became rights and obligations of Buyer.

Cash Dividend

March 6, 2024, the Company announced the declaration of a special cash dividend of eight dollars ($ 8.00 ) per share of common stock, payable

to stockholders of record as of March 18, 2024, with the dividend being paid on or about March 22, 2024.

The special dividend was paid

using a portion of the proceeds from the closing of the sale of the Company’s web-based market platform assets.

January 2025, the Company issued in aggregate 240,000 shares of common stock for services.

Line of Credit

connection with the ELOC Agreement (see Note 11), the investor purchased 2,800,000

shares of common stock for net proceeds of approximately $ 4.6 million during the calendar year beginning January 1,

In addition, the Company issued the investor an additional 295,901 commitment fee shares as part of a true-up calculation.

Departure of Directors or Certain Officers;

Election of Directors;

of Certain Officers

On March 13, 2025, the Board of Directors appointed Eric Sherb to serve

as the Company’s Chief Financial Officer effective as of March 13, 2025 (the “Effective Date”).

Sherb will succeed

Prashant Patel, who previously served as the Company’s Interim Principal Financial/Accounting Officer.

Patel notified the Company’s

Board of Directors of his intention to resign his position as Interim Principal Financial/Accounting Officer effective as of the Effective

Patel will continue to serve as the Company’s President and Chief Operating Officer.

Patel’s decision to resign

as the Company’s Interim Principal Financial/Accounting Officer is not the result of any dispute or disagreement with the Company,

the Company’s management or the Company’s Board of Directors on any matter relating to the Company’s operations, policies

or practices.

January 15, 2025 and January 16, respectively, Narasimhan Mani and Prashant Patel each voluntarily resigned as directors of the Company.

Neither resignation was the result of any dispute or disagreement with the Company or any matter relating to the Company’s operations,

policies or practices.

Patel and Dr.

Mani will not receive compensation for their service on the Board of Directors of the Company

Patel and Dr.

Mani each will continue on in their respective management roles.

connection with the foregoing director resignations, the Board approved a decrease in the size of the Board from 7 directors to 5 directors.

As such, the Board currently does not have any vacancies.

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data