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Item 1. Financial Statements

2025-08-12 compared with 2025-05-12 · 903 added, 809 removed, 418 unchanged (80% of the section changed)

FINANCIAL STATEMENTS

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Balance Sheets

As of March 31, 2025 and December 31, 2024

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Balance Sheets

of June 30, 2025 and December 31, 2024

Current assets:

7 unchanged sentences

Property, plant and equipment, net

Notes receivable - related party

Interest receivable, related party

Intangible assets, net

22 unchanged sentences

Stockholders’ equity (deficit):

Series A preferred stock, $ 0.00001 par

Series A preferred stock, $ 0.00001

and 9,211,246

shares authorized;

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

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

Series B preferred stock, $ 0.00001 par value;

787,754 shares authorized;

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

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

Series C preferred stock, $ 0.00001

shares authorized;

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

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

Series X preferred stock, $ 0.00001

shares authorized;

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

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

preferred stock, value

1 unchanged sentence

100,000,000 shares authorized;

12,515,019 and 8,750,582 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

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

Additional paid-in capital

6 unchanged sentences

$ 104,853,805

The accompanying notes are an integral part of the

unaudited consolidated financial statements.

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Statements Of Operations

For the Three Months Ended March 31, 2025 and 2024

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Statements Of Operations

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

Three Months Ended

Six Months Ended

Cost of sales

Gross profit (loss)

Operating expenses:

5 unchanged sentences

Research and development

operating expenses

Total operating expenses

Operating loss

1 unchanged sentence

( 1,495,691 )

Other income (expense):

Change in fair value of

warrant liability

Change in fair value of

derivative liability

Loss on conversion of note

( 8,729,223 )

( 6,988,662 )

Non-operating income (expense):

Change in fair value of warrant liability

Change in fair value of derivative liability

Loss on conversion of note payable

Loss on disposition of subsidiaries

Interest income

Loss on disposal of asset

Total other income (expense)

Interest expense

( 1,324,277 )

Total non-operating expense

( 1,562,667 )

( 1,055,347 )

( 1,269,501 )

Net loss from continuing operations

1 unchanged sentence

( 1,624,741 )

Benefit / (provision)

for income taxes

Net loss from continuing operations, net of

( 9,784,570 )

( 8,258,163 )

Net income from

discontinued operations, net of tax

Benefit / (provision) for income taxes

Net loss from continuing operations, net of tax

( 6,720,573 )

( 1,624,741 )

( 9,784,570 )

( 8,258,163 )

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

Net (loss) income

$ ( 6,720,573 )

$ ( 1,833,902 )

$ ( 9,784,570 )

Net loss per common share from continuing operations

Net income per common share from discontinued

Net (loss) income per common share from discontinued operations

Net (loss) income per common share

Weighted average common shares outstanding

The accompanying notes are an integral part of the

unaudited consolidated financial statements.

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Statements of Changes in

Stockholders’ Equity

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Preferred Stock

12 unchanged sentences

( 24,670,979 )

Balances at December 31, 2024

Options expense

( 1,833,902 )

Balances at June 30, 2024

$ ( 26,504,881 )

Balances at December 31, 2024

$ 118,111,007

$ ( 39,038,973 )

Common stock issued for services

5 unchanged sentences

( 3,063,997 )

Balances at March 31, 2025

( 42,102,970 )

Common stock issued for services

Equity line of commitment shares issued

Options expense

( 6,720,573 )

Net income (loss)

1 unchanged sentence

( 6,720,573 )

Balances at March 31, 2025

Balances at June 30, 2025

$ 126,683,845

2 unchanged sentences

$ ( 48,823,543 )

The accompanying notes are an integral part of the

unaudited consolidated financial statements

Scienture Holdings, Inc.

formerly TRxADE HEALTH,

Condensed Consolidated Statements of Cash Flows

For The Three Months Ended March 31, 2025 and 2024

Three Months Ended

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

Holdings, Inc.

formerly TRxADE HEALTH, INC.

Consolidated Statements of Cash Flows

The Six Months Ended June 30, 2025 and 2024

Six Months Ended

Cash flows from operating activities:

8 unchanged sentences

Loss on conversion of note payable

Loss on disposition of subsidiaries

Options expense

2 unchanged sentences

Amortization of right-of-use assets

Interest income

Changes in operating assets and liabilities:

10 unchanged sentences

( 5,197,913 )

Net cash used in operating activities from discontinued operations

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

Net cash used in operating activities

17 unchanged sentences

Proceeds from exercise of options

Deferred offering costs

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

12 unchanged sentences

Equity line of commitment shares issued as offering costs

Issuance of note receivable in exchange for other receivables

Insurance premium financed

Note issued as SOSRx contribution

Disposition of assets, related party

Issuance of note receivable

The accompanying notes are an integral part of the

unaudited consolidated financial statements.

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

On 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, Inc.”

The Company owned, as of March

31, 2025, 100 % of Softell Inc.

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

acquired in July 2024.

Deferred offering costs included in accrued expenses

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

1 – ORGANIZATION AND BASIS OF PRESENTATION

On September 20, 2024, changed

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

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

was acquired in July 2024.

Bonum Health, LLC was formed to hold certain telehealth

assets acquired in October 2019.

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

however, the Company does not

anticipate installations moving forward.

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

LLC in the near future.

Scienture 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

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

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.

of Legacy Subsidiaries

The Company previously owned all

equity interests in Softell Inc.

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

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

As described below, these subsidiaries were disposed of

during the three months ending June 30, 2025.

On October 4, 2024, the Company

and Softell 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 Softell.

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

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

of the membership interests of IPS.

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

During the year ended December 31,

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.

Bonum Health, LLC was formed to

hold certain telehealth assets acquired in October 2019.

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

Company does not anticipate installations moving forward.

The Company anticipates dissolving Bonum Health, Inc.

and Bonum Health, LLC.

Scienture, 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.

Disposition of Legacy Subsidiaries

On April 8, 2025, the Company

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

(“Tollo”), pursuant

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

Suren Ajjarapu,

the Company’s Chief Executive Officer, and Prashant Patel, the Company’s President and Chief Operating Officer, each have

a beneficial interest in Tollo.

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

buyers and sellers of pharmaceuticals, accessories and services.

IPS is a licensed pharmaceutical wholesaler and sells brand, generic

and non-drug products to customers.

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

clinics and independent pharmacies nationwide.

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

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

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

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

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

membership interests in IPS.

On April 8, 2025, the Company

also entered into a Stock Purchase Agreement (the “Bonum SPA” and together with the IPS MIPA, the “Agreements”)

with Tollo, pursuant to which Tollo agreed to purchase and the Company agreed to sell all issued and outstanding shares of common stock

of Bonum Health, Inc.

In connection with each of the

Agreements, the Company agreed to retain certain excluded liabilities of IPS and Bonum including all liabilities:

(i) related to, in connection

with or arising out of any claims, charges, complaints, actions, suits, settlements, hearings, investigations, proceedings, or governmental

or regulatory inquiries with respect to IPS or Bonum, respectively, prior to the closing under the applicable Agreement;

to, in connection with or arising out of any breach by the Company of the applicable Agreement or any other agreements and documents required

to be delivered by the Company;

also entered into a Stock Purchase Agreement (the “ Bonum and Softell SPA ” and together with the IPS MIPA, the

“ Agreements ) with Tollo, pursuant to which Tollo agreed to purchase and the Company agreed to sell all issued and

outstanding shares of common stock of Bonum Health, Inc.

Suren Ajjarapu, the Company’s former Chief Executive Officer,

and Prashant Patel, the Company’s former President and Chief Operating Officer, each had a beneficial interest in Tollo at the

time the Company entered into the each of the Agreements.

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

including all liabilities:

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

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

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

(ii) related to, in connection with or

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

by the Company;

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

(iv) related to any actions threatened

or initiated by a governmental entity against IPS or Bonum, respectively;

and (v) related to tax returns or tax matters of the Company,

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

The Company and Tollo have agreed

to consummate the closing of each of the Agreements on June 30, 2025, or such other time as the Company and Tollo may agree.

As consideration

for acquiring IPS and Bonum, Tollo has agreed to pay the Company $ 5 million in the form of a promissory note bearing interest at the prime

The promissory note matures on June 30, 2030.

However, Tollo is required to pay 20% of the proceeds of a future equity financing

toward repayment of the principal and accrued but unpaid interest owed under the promissory note.

The divestitures are part of a

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

It is aligned with the

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

Pharma markets.

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

product development activities at its Scienture, LLC subsidiary (see Note 15).

Basis of Presentation and Principles of Consolidation

The accompanying unaudited interim

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

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

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

financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024,

as filed with the SEC on March 26, 2025.

In the opinion of management,

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

operations for the interim periods presented have been reflected herein.

All significant intercompany balances and transactions have been

eliminated in consolidation.

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

for the full year.

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

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

Use of Estimates

The preparation of condensed consolidated

financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts

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

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

be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and

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

The actual results experienced by

the Company may differ materially and adversely from its estimates.

Significant estimates for the three months ended March 31, 2025 and

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

Fair Value of Financial Instruments

Certain assets and liabilities

of the Company are carried at fair value under GAAP.

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

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

between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable

inputs and minimize the use of unobservable inputs.

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

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

unobservable:

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

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying amounts for cash,

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

short-term maturity.

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

that are consistent with current market rates.

The Company’s derivative liability is a Level

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

Concentration of Credit Risks and Major Customers

Financial instruments that potentially

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

The Company places its cash and cash

equivalents with financial institutions.

Deposits are insured to Federal Deposit Insurance Corp limits.

During the three months ended

March 31, 2025 and 2024, no sales to customers represented greater than 10 % of revenue.

Accounts Receivable, net

The Company’s receivables

are from customers and are typically collected within 90 days.

The Company determines the allowance based on known troubled accounts,

historical experience, and other currently available evidence.

Other Receivables

As of March 31, 2025 and December

31, 2024, other receivables are $ 4,043,769 and $ 4,138,770 , respectively.

As of March 31, 2025, other receivables primarily consist of

short-term advances to Wellgistics Health, Inc.

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

The Company expects to be repaid on all

related party receivables in 2025.

Deferred Offering Costs

The Company complies with the

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

Prior to the completion

of an offering, offering costs are capitalized.

The deferred offering costs are charged to additional paid-in capital or as a discount

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

As of March 31, 2025, the Company

has not capitalized any amount in deferred offering costs.

During the three months ended March 31, 2025, $ 534,800 of deferred offering

costs capitalized as of December 31, 2024 were charged to additional paid-in capital upon the Company’s equity offering.

The Company accounts for acquisitions

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

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

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

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

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

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

net tangible and intangible assets acquired is recorded as goodwill.

The application of the acquisition

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

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

that are depreciated and amortized from goodwill.

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

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

utilize customary valuation procedures and techniques.

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

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

to be derived from acquiring an asset, if applicable.

If the actual results differ from

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

potential impairment of the intangible assets and goodwill.

If the Company’s investment

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

for as an asset acquisition.

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

in the recognition of goodwill.

On July 25, 2024, the Company

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

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

Goodwill is an asset representing

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

In accordance with Intangibles - Goodwill

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

impairment exist.

(iv) related to any actions threatened or

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

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

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

As consideration for

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

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

The promissory note

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

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

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

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

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

Chief Operating Officer as of June 30, 2025.

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

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

In connection with

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

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

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

As such, the Company recognized

a loss on disposition of $ 385,528 .

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

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

the Branded and Specialty Pharma markets.

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

commercial and strategic product development activities at its Scienture subsidiary.

of Presentation and Principles of Consolidation

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

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

GAAP ”) and the rules of the SEC and should

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

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

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

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

All significant intercompany balances

and transactions have been eliminated in consolidation.

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

of the results to be expected for the full year.

Notes to the financial statements that would substantially duplicate the disclosures

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

on Form 10-K have been omitted.

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

GAAP requires management to make estimates and assumptions

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

and expenses in the reporting period.

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

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

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

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

Significant estimates for the six

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

Value of Financial Instruments

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

Fair value is defined as the exchange price that would be

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

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

Valuation techniques used to measure fair value must maximize

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

Financial assets and liabilities carried at fair value are

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

observable and the last is considered unobservable:

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

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

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

or can be corroborated by observable market data.

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

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

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

fair value because of their short-term maturity.

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

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

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

Concentration

of Credit Risks and Major Customers

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

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

Deposits are insured to Federal Deposit Insurance Corporation

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

Receivable, net

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

The Company determines the allowance based

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

Offering Costs

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

to offering costs.

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

The deferred offering costs are charged to

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

is not completed.

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

in deferred offering costs.

During the six months ended June

30, 2025, $ 534,800

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

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

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

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

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

not previously consolidated.

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

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

The excess of the purchase price

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

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

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

between assets that are depreciated and amortized from goodwill.

The fair value assigned to tangible and intangible assets acquired and

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

valuations that utilize customary valuation procedures and techniques.

Significant assumptions and estimates include, but are not limited

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

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

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

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

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

the transaction is accounted for as an asset acquisition.

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

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

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

acquisition (see Note 3).

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

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

In accordance with

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

when indicators of potential impairment exist.

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.

The Company has the option to

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

its carrying value.

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

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

of the reporting units.

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

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

The Company also has the option

to proceed directly to the quantitative test.

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

is compared to its carrying value, including goodwill.

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

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

The Company’s reporting

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

For purposes of impairment

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

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.

As of March 31, 2025, management

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

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

As such, a quantitative goodwill test

was not required, and no goodwill impairment was recognized during the three months ended March 31, 2025 and 2024.

Intangible Assets

In connection with the Scienture

acquisition, the Company identified product technologies assets.

The product technologies represent a broad range of novel product candidates

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

Each of the product technologies

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

The product technologies are 505(b)(2)

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

which require significant regulatory approvals and testing).

These assets should be amortized over their expected remaining economic 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).

Impairment of Long-Lived Assets

The Company continually monitors

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

When such events

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

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

If the total of the future cash flows is less

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

fair value of the assets.

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

The Company did not record an

impairment charge for the three months ended March 31, 2025 and 2024.

Stock-Based Compensation

The Company accounts for stock-based

compensation to employees in accordance with ASC 718, “Compensation-Stock Compensation”.

ASC 718 requires companies to measure

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

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

for the award, usually the vesting period.

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

Effective January

1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2018-07 for the accounting of share-based payments granted to non-employees for goods and services.

The Company accounts for its leases

under ASC 842, Leases.

Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases,

and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease

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

For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense

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

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

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

months ended June 30, 2025 and 2024.

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

The product technologies represent a broad

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

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

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

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

These assets should be amortized

over their expected remaining economic life.

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

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

At that point, the assets will be amortized

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

of Long-Lived Assets

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

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

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

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

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

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

the fair value less costs to sell.

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

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

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

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

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

Stock option forfeitures are recognized at the

date of employee termination.

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

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

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

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

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

borrowing rate.

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

over the lease term.

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.

In calculating the right of use

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

The Company excludes short-term leases having

initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line

basis over the lease term.

Research & Development Expenses

Research and development costs

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

These expenses consist of independent contractor

costs, costs for outsourced analytical research and development activities, batch manufacturing cost and, advisory costs as a part of

research, market research costs and other regulatory consulting costs.

Income (loss) Per Common Share

Basic net income per common share

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

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

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

common shares were dilutive.

The dilutive effect of the Company’s options and warrants is computed using the treasury stock method.

As of March 31, 2025, we had 238,594 outstanding 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.

The following table sets forth the computation of

basic and diluted loss per share:

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

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

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

SCHEDULE OF BASIC AND DILUTIVE LOSS PER SHARE

Three Months Ended

Six Months Ended

Net loss from continuing operations

1 unchanged sentence

$ ( 1,624,741 )

Net income on discontinued operations

Net (loss) income

$ ( 9,784,570 )

$ ( 8,258,163 )

Net income (loss) on discontinued operations

Net income (loss)

$ ( 6,720,573 )

$ ( 1,833,902 )

$ ( 9,784,570 )

Denominator for EPS – weighted average shares

Net loss per common share from continuing operations

Net income per common share from discontinued operations

Net (loss) income per common share from discontinued operations

Net (loss) income

The Company’s provision

for income taxes was $ 0 for the three months ended March 31, 2025 and 2024.

The income tax provisions for these periods are based upon

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

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

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

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

Recently Issued Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material

effect on the accompanying financial statements.

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

under the circumstances.

NOTE 2 – GOING CONCERN

The accompanying interim consolidated

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

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

statements are issued.

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

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

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

that the financial statements are issued.

As of March 31, 2025, the Company

had an accumulated deficit of $ 42,102,970 .

As of March 31, 2025, the Company had $ 2,049,638 in cash.

The Company 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.

These factors raise substantial doubt

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

Unless management is able to obtain additional financing, it is unlikely

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

The financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

NOTE 3 – ACQUISITIONS AND DISPOSITIONS

Scienture, Inc.

The Company evaluated the Scienture

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

The Company first determined that Scienture met

the definition of a business as it includes inputs and a substantive process that together significantly contribute to the ability to

create outputs.

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

date of acquisition.

The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed

in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition.

Goodwill recognized

in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the

The purchase price allocation is preliminary and could be significantly revised as a result of additional information obtained

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

assets and liabilities.

The Company will finalize its valuation and the allocation of the purchase price, along with required retrospective

adjustments, if any, within a year following the acquisition date.

On July 25, 2024, the Company

issued 291,536 shares of common stock and 6,826,753 shares of Series X Preferred Stock pursuant to the Scienture Merger Agreement.

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

The fair value was determined by the underlying stock price

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

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

The Company also applied a discount for lack of marketability

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

The following summarizes the purchase

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

Company’s provision for income taxes was $ 0

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

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

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

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

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

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

Issued Accounting Pronouncements

In November 2024, the Financial

Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2024-03, Income Statement — Reporting Comprehensive

Income (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires public business entities to disclose in tabular

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

The objective of the standard is to provide

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

and administrative expenses.

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

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

are also required to disclose total selling

expenses and define what is included in that category.

The guidance is effective for

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

Early adoption

is permitted.

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

The Company is currently evaluating

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

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

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

financial statements.

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

2 – GOING CONCERN

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

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

date the consolidated financial statements are issued.

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

Accounting Standards Update No.

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

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

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

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

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

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

of any businesses or assets we acquire.

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

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

If we are unable to access

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

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

Unless management is able to obtain

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

The financial

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

3 – ACQUISITIONS AND DISPOSITIONS

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

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

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

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

Scienture’s results of operations

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

The acquisition method of accounting

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

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

Goodwill recognized in connection with this transaction represents

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

The purchase price allocation is

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

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

The Company will

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

following the acquisition date.

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

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

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

The fair value was determined by the

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

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

The Company also applied a discount

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

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

OF PURCHASE PRICE ALLOCATION

18 unchanged sentences

Net assets acquired

Goodwill is primarily attributable

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

for separate recognition.

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.

Unaudited Pro Forma Financial

The following unaudited pro forma

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

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:

Pro Forma Financial Information

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

as of January 1, 2024.

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

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

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

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

The pro forma information does not give effect to any

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

SCHEDULE OF PRO

FORMA FINANCIAL INFORMATION

Six Months Ended

June 30, 2024

Net loss from continuing operations

1 unchanged sentence

Net loss from continuing operations per share

Dispositions and Divestitures

On 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

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.

and Divestitures

Refer to Note 1 for further

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

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

Merchant Systems, Inc.

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

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

On February 16, 2024, the parties consummated

the closing of the transactions contemplated by the MMS APA.

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

Because MMS received $ 1,600,000

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

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

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

The Company received the payment in May 2024.

The MMS APA was accounted for

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

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

revenues and expenses of Softell.

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:

2 unchanged sentences

Other receivable from MMS

Fair value of consideration received

Total fair value of consideration received

3 unchanged sentences

Property, plant and equipment, net

Intangible assets, net

Operating lease right-of-use assets

Purchase price payable

Accounts payable

4 unchanged sentences

Lease liability, net of current portion

Notes payable

Total carrying amount of assets and liabilities

Gain on disposition of business

The gain on disposition of business

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

ended December 31, 2024.

Superlatus SPA

On March 5, 2024, the Company

entered into 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.

The transaction was accounted

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

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

revenues and expenses of Superlatus.

The components of the disposition are as follows:

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

of operations of the year ended December 31, 2024.

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

with Superlatus Inc.

(the “ Superlatus SPA ”) .

Pursuant to the Superlatus SPA, the Company sold all of

the issued and outstanding stock of Superlatus Inc.

to Superlatus Foods Inc.

(the “ Buyer ”).

The $ 1.00 purchase

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

As a result of the transaction, Superlatus Inc.

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

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

became rights and obligations of

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

As of March 5, 2024, the Company no longer

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

The components of the disposition are as

OF BUSINESS ACQUISITIONS ASSETS AND LIABILITIES

16 unchanged sentences

$ ( 2,083,742 )

The loss of disposition of business of $ 2,083,742

was included in income from discontinued operations, net of tax in the consolidated statements of operations of the year ended December

Discontinued Operations

In accordance with the provisions

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

consolidated statements of operations for the three months ended March 31, 2025 and 2024.

The results of the discontinued operations for

the three months ended March 31, 2025 and 2024 consist of the following:

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

of operations of the year ended December 31, 2024.

Disposition of Legacy Subsidiaries

See Notes 1 and 4 for detailed discussion.

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

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

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

OF DISCONTINUED OPERATIONS

4 unchanged sentences

Cost of sales

Gross profit (loss)

Operating expenses:

4 unchanged sentences

Total operating expenses

Operating income (loss)

Non-operating income (expense):

Gain on dispositions

Total non-operating income (expense)

Net loss on discontinued operations

$ ( 209,161 )

Six Months Ended

Cost of sales

Gross profit loss

Operating expenses:

Wage and salary expense

Professional fees

Technology expense

General and administrative

Total operating expenses

Operating income

Other income (expense):

Goodwill impairment

Non-operating income (expense):

Gain on dispositions

( 2,083,742 )

Other expense

Interest expense

Total other income(expense)

Total non-operating income (expense)

( 2,083,742 )

Provision for income taxes

Net income(loss) on discontinued operations

Net income on discontinued operations

$ ( 2,083,742 )

In the second quarter of 2024,

the Company determined to dissolve Bonum Health, Inc.

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

(loss) from discontinued operations.

NOTE 4- RELATED PARTY TRANSACTIONS

Wellgistics Health and Tollo Health

On November 21, 2023, but effective

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

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.

As of March 31, 2025, other receivables

include a $ 3,828,769 receivable from Wellgistics and $ 215,000 receivable from Tollo Health.

The advances are unsecured, non-interest bearing

and due on demand.

See Note 6 for detail on the note

receivable from Wood Sage.

Both Wellgistics Health and Tollo

Health have common ownership and management with the Company.

In 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 March 31, 2025.

In November 2024, the executives

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

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

and Bonum Health, LLC, and have presented the results

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

4- RELATED PARTY TRANSACTIONS

Health and Tollo Health

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

Note ”) to Wellgistics Health, Inc.

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

of $ 300,000 .

The Company prepaid $ 250,000 prior

to the execution date.

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

receivable from Wellgistics and $ 215,000

receivable from Tollo.

The receivables were unsecured, non-interest

bearing and due on demand.

The receivables were maintained by the Company’s former IPS subsidiary, which was sold to Tollo as of

April 30, 2025.

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

to Tollo in exchange for a

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

The note requires Tollo to repay 20 %

of any future equity financing proceeds toward the outstanding balance.

In connection with the transaction, the Company recorded a

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

other receivables of $ 4,219,239 ,

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

operating lease liability of $ 158,687

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

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

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

As of June 30, 2025, the note receivable with

Integral Health, Inc.

was outstanding and the Company recognized $ 62,500

in interest income.

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

Suren Ajjarapu, the Company’s

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

interest in Tollo as of June 30, 2025.

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

The loans are unsecured,

non-interest bearing and due on demand.

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

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

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

was outstanding as of March 31, 2025.

In February 2025, the executives

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

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

was outstanding as of March 31, 2025.

NOTE 5 – REVENUE RECOGNITION

The Company derives revenue from

two primary sources—product revenue and service revenue.

Product revenue consists of shipments

Resale of pharmaceutical products to pharmacies;

Revenues for our products are recognized and invoiced

when the product is shipped to the customer.

Revenues for one-time services are

recognized at the point in time when services are rendered.

Payment terms for products and services are generally 0 to 60 days and the

Company has no contract assets or liabilities.

Revenues for the three months ended

March 31, 2025 and 2024 were $ 10,258

The loan was outstanding as of June 30, 2025.

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

The loan is unsecured, non-interest bearing

and due on demand.

The loan was outstanding as of June 30, 2025.

5 – REVENUE RECOGNITION

The Company historically derived

revenue from one primary source—product revenue.

revenue consists of resale of pharmaceutical products to pharmacies.

Revenue is recognized when the product is shipped to the

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

respectively.

In 2025, all revenue was product revenue.

NOTE 6 – NOTES RECEIVABLE – RELATED

On August 22, 2023, the Company

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

The Wood Sage Note bears no

interest and is currently due and payable.

As of both March 31, 2025 and December 31, 2024, the outstanding balance of the Wood Sage Note

was $ 1,300,000 .

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

In connection with the Scienture

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

The purchase price allocation

of intangible assets was evaluated under ASC 805.

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

valued accordingly by each product candidate:

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

respectively.

6 – NOTES RECEIVABLE – RELATED PARTY

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

Wood Sage, LLC.

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

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

outstanding balance of the Wood Sage Note was $ 0 and

$ 1,300,000 ,

respectively.

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

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

note bearing interest at the prime rate and maturing on June

30, 2030 (see Notes 1 and 4) .

7 – GOODWILL AND INTANGIBLE ASSETS

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

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

The identified intangible assets were determined to be product

technologies, and were valued accordingly by each product candidate:

OF INTANGIBLE ASSETS WERE DETERMINED TO BE PRODUCT TECHNOLOGIES

Product Candidate

Management expects SCN-102

to achieve regulatory approval in mid 2025, with product commercialization projected to begin in late 2025.

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

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

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

The fair value of the product

technologies was determined by the Income Approach:

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

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

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

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

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

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.

As of March 31, 2025, the Company

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

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.

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

The Company discounted the expected future

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

of the cash flows related to the product technologies.

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

of each of the product technologies.

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

8 – CONVERTIBLE DEBT AND NOTES PAYABLE

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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”).

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

Securities Purchase Agreement, the Company will issue 10 %

original issue discount one or more secured convertible debentures

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

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 ”).

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.

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

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

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

First Closing Debentures contain customary events of default.

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

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

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

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.

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

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

of the outstanding principal amount and accrued and unpaid interest.

Subject to limited exceptions , the First Closing Debentures prohibit

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

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

are paid in full.

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

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

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

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 three months ended March 31, 2025, the Company accrued $ 84,167 in interest expense pertaining to the Arena debentures.

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

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

which was included as a debt discount as noted below.

Pursuant to a Security Agreement,

dated November 25, 2024, the Company granted to 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, entered into a Guarantee Agreement, dated November 25, 2024, with the Arena Investors, pursuant to which it agreed

to guarantee the prompt payment.

Interest accrues on the

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

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

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

Any PIK Interest is added to the

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

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

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

The Company will not issue additional debentures to

satisfy and pay any PIK Interest.

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

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

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

hereunder, has been made.

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

to the First Closing Debentures.

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

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

debt discount was amortized to interest expense.

During the three months ended March 31, 2025, $ 480,186 of the debt discount was amortized

to interest expense.

At March 31, 2025, the outstanding balance of the debentures, including the outstanding principal of $ 3,333,333

less the unamortized discount of $ 2,240,872 , was $ 1,092,461 .

The following is a summary of the Arena Debentures:

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

of the debt discount was amortized to interest expense.

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

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

The following is a summary of the First Closing Debentures:

OF THE ARENA DEBENTURES

7 unchanged sentences

Amortization of debt discount

Arena note, net of unamortized debt discount, at March 31, 2025

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.

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

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

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

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

definition of a liability.

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

outside of the Company’s control.

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

derivative liability.

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

$ 2,477,217 ,

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

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

16 unchanged sentences

Change in fair value

Outstanding as of March 31, 2025

Outstanding as of June 30, 2025

Convertible Debt

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

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

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

prime rates are adjusted quarterly.

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

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

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

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

rate is adjusted quarterly.

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

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

2 unchanged sentences

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).

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 March 31, 2025 was $ 2,000,000 .

Interest expense on the NVK debt was $ 77,500

for the three months ended March 31, 2025.

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 .

2025 and interest is payable monthly

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

The NVK debt is convertible into common stock of Scienture

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

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

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

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

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

for which the Company received $ 314,000 in

net proceeds.

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

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

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

The note bears interest at 12 %

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

If the Company fails to pay any

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

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

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

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

trading days .

The note matures on August

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 , with $ 42,755 amortized through December 31, 2024, and an additional

$ 28,931 amortized during the three months ended March 31, 2025.

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

unamortized discount of $ 45,646 , was $ 314,354 .

connection with the note, the Company issued 76,923

warrants to purchase common stock to the noteholder.

The warrants have an exercise price of $ 9.36

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

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

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

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

with $ 42,755

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

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

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

remaining unamortized discount of $ 45,646 ,

was $ 314,354 .

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

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

As a result, it recognized a $ 96,646 loss on conversion, reported as a non-operating

expense in the unaudited condensed consolidated statements of operations.

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

As of March 31, 2025

Unamortized debt

Debt, net of unamortized

As a result, it recognized a $ 96,646

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

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

As of June 30, 2025

debt discount

of unamortized

debt discount

Convertible debenture - Arena

6 unchanged sentences

As of December 31, 2024

Unamortized debt

Debt, net of unamortized

debt discount

of unamortized

debt discount

Convertible debenture - Arena

9 unchanged sentences

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

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.

$ 0.00001 per

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

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

5 unchanged sentences

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

As consideration for the Scienture Merger, the shares of Scienture

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

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

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

of common stock.

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

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

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

The fair value of shares issued

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

of operations.

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

6 unchanged sentences

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 8).

this connection, the Company issued to each Arena Investor participating in the First Closing its pro rata portion of 55,000 shares of

As additional consideration

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

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

In connection with any Closing

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

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

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

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

were earned as of the First Closing Date regardless of whether a subsequent Closing occurs (see Note 8).

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

the Company’s common stock.

2 unchanged sentences

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”).

November 25, 2024, the Company entered into a purchase agreement (“ ELOC Agreement ”) with Arena Business Solutions

Global SPC II, Ltd (the “ Investor ”).

Under the ELOC Agreement, the Company had the right, but not the obligation,

to direct the Investor to purchase up to $ 50,000,000

in shares of the Company’s common stock (the “ ELOC Shares ”) upon satisfaction of certain terms and conditions

contained in the ELOC Agreement.

The term of the ELOC Agreement began on the date of execution and would end on the earlier of (i) the

first day of the month following the 36-month anniversary of the execution date, (ii) the date on which the Investor had purchased the

maximum amount of ELOC Shares, or (iii) the effective date of any written notice of termination delivered pursuant to the terms of the

ELOC Agreement (the “ Commitment Period ”).

The Company terminated the ELOC Agreement effective as of May 22,

consideration for the Investor’s execution and delivery of the ELOC Agreement, the Company agreed to issue to the Investor, as

a commitment fee:

(i) 70,000 shares of the Company’s Common Stock (“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

(i) 70,000 shares

of the Company’s Common Stock (the “ Initial Commitment Fee Shares ”) and (ii) in two separate

tranches, a number of additional shares of common stock (the “ Additional Commitment Fee Shares ” and,

together with the Initial Commitment Fee Shares, the “ Commitment Fee Shares ”) equal to (a) with respect to

the first tranche, 500,000 divided

by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding the effectiveness

of the initial registration statement on which the 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.

In March 2025, the deferred offering costs previously capitalized were

offset against the gross proceeds from the ELOC share issuances (see below).

2025, the Company issued to the Investor, as another commitment fee, in aggregate 450,437 shares of the Company’s common stock.

The fair value of shares issued was $ 971,732 and was recognized as offering costs in connection with the related ELOC Agreement share

Accordingly, the fair value of the shares issued were offset against the gross proceeds and there was no net effect to stockholders’

March 2025, the Company issued in aggregate 2,800,000 shares of common stock pursuant to the above ELOC Agreement for aggregate gross

of the initial registration statement on which the resale of the Commitment Fee Shares are registered (the

“ Effectiveness Date ”) and (b) with respect to the second tranche, 500,000 divided

by the simple average of the daily VWAP of our common stock during the five (5) trading days immediately preceding the two (2) month

anniversary of the Effectiveness Date.

The Additional Commitment Fee Shares were subject to a true-up after each issuance pursuant

to the terms of the ELOC Agreement.

The Company issued the Initial Commitment Fee

Shares on November 25, 2024.

The fair value of the shares issued was $ 534,800

and was included in deferred offering costs in the consolidated balance sheets.

In March 2025, the deferred offering costs

previously capitalized were offset against the gross proceeds from the ELOC share issuances (see below).

2025, the Company issued to the Investor, 450,437 Additional Commitment Fee Shares.

The fair value of shares issued was $ 971,732

and was recognized as offering costs in connection with the related ELOC Agreement share issuances.

Accordingly, the fair value of

the shares issued were offset against the gross proceeds and there was no net effect to stockholders’ equity.

March 2025, the Company issued in aggregate 2,800,000 shares of common stock pursuant to the ELOC Agreement for aggregate gross

proceeds of $ 4,597,999 .

1 unchanged sentence

capital of $ 2,691,467 .

April and May 2025, the Company issued to the Investor, 614,075 shares of common stock as the final Additional Commitment Fee Shares

owed to the Investor.

The fair value of shares issued was $ 554,586

and was recognized as deferred offering costs in connection

with the related ELOC Agreement share issuances.

Compensation Awards

independent member of the Company’s board of directors (the “Board”) is to receive an annual grant of restricted common

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

and valued on such same date, based on the closing sales price on such date (or the first business day thereafter), which restricted

stock awards will vest at the rate of 1/4th of such awards over the following four calendar quarters, subject to such directors continued

service to the Company.

Company’s board of directors and stockholders approved an amendment to the Second Amended and Restated 2019 Equity Incentive

Plan (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.

independent member of the Company’s board of directors (the “ Board ”) is to receive an annual grant of

restricted common stock of the Company equal to $ 55,000

in value on April 1st of each year (or such date thereafter

as the awards are approved by the Board), and valued on such same date, based on the closing sales price on such date (or the first business

day thereafter), which restricted stock awards will vest at the rate of 1/4th of such awards over the following four calendar quarters,

subject to such directors continued service to the Company.

Board and the Company’s stockholders approved an amendment to the Second Amended and Restated 2019 Equity Incentive Plan (the

“ Plan ”), which increased

the available shares under the Plan to 5,000,000

shares of the common stock.

10 – WARRANTS

4 unchanged sentences

warrants for shares of commons stock on a cashless basis.

of March 31, 2025, the Company remeasured the fair value of warrants outstanding at $ 273,949 .

of June 30, 2025, the Company remeasured the fair value of warrants outstanding at $ 197,827 .

In connection with remeasurement of warrants,

a $ 645,986 gain and $ 729,889 loss was recognized during the three months ended March 31, 2025 and 2024, respectively, as the change in

fair value of warrant liability.

Company’s outstanding and exercisable warrants, as of March 31, 2025, are presented below:

a $ 76,122 and $ 722,108 gain was recognized during the three and six months ended June 30, 2025, respectively, as the change in fair value

of warrant liability.

Company’s outstanding and exercisable warrants, as of June 30, 2025, are presented below:

OF OUTSTANDING AND EXERCISABLE WARRANTS

Exercise Price

Number Outstanding

Weighted Average Exercise Price

Contractual Life

Intrinsic Value

Warrants outstanding as of December 31, 2024

3 unchanged sentences

Warrants exercised

Warrants outstanding as of March 31, 2025

Warrants exercisable as of March 31, 2025

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 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

Warrants outstanding as of June 30, 2025

Warrants exercisable as of June 30, 2025

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

on a combination of performance and tenure.

The number of shares available to grant to employees under the Plan is 5,000,000.

Board and stockholders approved an amendment to the Plan increasing the available shares under the Plan

to 5,000,000 shares of the Common Stock as such common stock existed on July 24, 2024.

compensation cost related to stock options granted was $ 437 and $ 24,266 for the three months ended March 31, 2025, and 2024, respectively.

following table represents stock option activity for the three-month period ended March 31, 2025:

compensation cost related to stock options granted was $ 162,438 and $ 444 for the three months ended June 30, 2025, and 2024, respectively.

compensation cost related to stock options granted was $ 162,874 and $ 24,710 for the six months ended June 30, 2025, and 2024, respectively.

following table represents stock option activity for the six-month period ended June 30, 2025:

OF STOCK OPTION ACTIVITY

Weighted-Average

Exercise Price

Weighted-Average

Contractual Life

Number Outstanding

Weighted-Average Exercise Price

Weighted-Average Contractual Life in Years

Intrinsic Value

Options outstanding as of December 31, 2024

4 unchanged sentences

Options exercised

Options outstanding as of March 31, 2025

Options exercisable as of March 31, 2025

12 – CONTINGENCIES

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.

Options outstanding as of June 30, 2025

Options exercisable as of June 30, 2025

12 – COMMITMENTS AND CONTINGENCIES

In July 2023, the Company entered into, and closed on the transactions

contemplated by, an Amended and Restated Agreement and Plan of Merger with Superlatus, whereby the Company acquired Superlatus (the “ Superlatus

Acquisition ”).

In connection with the Superlatus Acquisition, former shareholders of Superlatus received 306,855 shares of the Company’s Series B Preferred Stock, par value $ 0.00001 per share (the “ Series B Preferred

The Series B Preferred Stock are convertible into shares of the Company’s common stock at a conversion ratio

In January 2024, shareholders

holding shares of Series B Preferred Stock surrendered shares of the Series B Preferred Stock back to the Company as a result of Superlatus

failing to meet certain post-closing conditions associated with the Superlatus Acquisition, such that only 15,759 shares of Series B Preferred

Stock remained outstanding.

On March 5, 2024, the Company

sold all of the issued and outstanding stock of Superlatus Inc.

to Superlatus Foods Inc.

pursuant to the Superlatus SPA.

As a result of

the transaction, Superlatus Inc.

ceased to be a subsidiary of the Company, and the rights and assets of Superlatus together with various

liabilities and obligations that were specific to Superlatus Inc.

became rights and obligations of the Buyer.

The shares of Series B Preferred

Stock issued in connection with the Superlatus Acquisition remain outstanding.

In January 2025, Eat Well

Investment Group, Inc., a Canadian company (“ Eat Well ”) holding 11,643.84

shares of the Series B Preferred Stock, filed a complaint against the Company in the United States District Court

for the Middle District of Florida alleging, among other things, that the Company is responsible for paying certain consideration to

Eat Well in connection with Superlatus’ acquisition of Eat Well in June 2023 prior to the Company’s acquisition of

Ultimately, Eat Well is seeking $ 8.5

million to be delivered in the form Company common stock, $ 1.15

million in unpaid principal and accrued interest under a legacy note made by Superlatus in favor of Eat Well, $ 350,000

in cash consideration owed by Superlatus to Eat Well, $ 755,000

in unpaid principal and accrued interest on ten promissory notes made by Sapientia, Inc., a subsidiary of Superlatus, in favor of

Eat Well, and certain other damages.

There can be no assurance that an amicable resolution will be obtained.

The Company intends to

vigorously defend itself in the litigation.

Kesin Pharma Corporation

Scienture entered into an

exclusive license and commercial agreement (the “ Kesin Agreement ”) with Kesin Pharma Corporation (“ Kesin ”)

whereby Scienture granted the exclusive license rights to commercialize SCN-102 in 2022 and SCN-104 in 2023 to Kesin for use in the United

States of America.

March 2024, the parties terminated the Kesin Agreement, and the parties agreed that Scienture would pay Kesin a total gross amount

of $ 1,285,000 upon

commercialization of product via a royalty arrangement.

The royalty agreement requires that if the

full $1,285,900 has not been repaid within two years of the earlier of (i) commercial launch or (ii) 120 days from FDA approval,

then interest will accrue prospectively at a rate of 8% annually on the unpaid balance.

Accordingly, Scienture recorded a $1,285,000

termination fee liability.

As of June 30,

2025, the entire amount is outstanding.

August 2024, Kesin demanded immediate payment of the full amount under the Kesin Termination Agreement, alleging the full amount is payable

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

Scienture LLC has disputed that the

in connection with the consummation Scienture’s business combination with the Company.

Scienture disputed that the

amount is payable, and the parties entered into discussions to resolve the issue.

March 11, 2025, Kesin filed a complaint against Scienture LLC in the United States District Court for the Eastern District of New York

March 11, 2025, Kesin filed a complaint against Scienture in the United States District Court for the Eastern District of New York

seeking payment of the disputed $ 1.285 million.

There can be no assurance that an amicable resolution will be obtained.

Scienture LLC

intends to vigorously defend itself in the litigation.

7 unchanged sentences

No incentives were included in the lease.

July 25, 2024, the Company entered into and closed the Scienture Merger Agreement.

On April 30, 2025, the

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

In connection with the transaction,

the Company derecognized subsidiary’s operating lease right-of-use assets of $ 142,138

and operating lease liability of $ 158,687

(see Note 1).

As such, the Company recognized a gain of $ 16,548

on disposition of related IPS lease.

July 25, 2024, the Company entered into and closed the Scienture Merger.

Pursuant to the Scienture Merger Agreement, the Company

2 unchanged sentences

table below reconciles the fixed component of the undiscounted cash flows for and the total remaining years to the lease liabilities

recorded in the consolidated balance sheet as of March 31, 2025.

Supplemental balance sheet information

related to leases are as follows:

recorded in the consolidated balance sheet as of June 30, 2025.

balance sheet information related to leases are as follows:

OF BALANCE SHEET INFORMATION RELATED TO LEASES

March 31, 2025

December 31, 2024

Weighted-average remaining lease term (in years)

8 unchanged sentences

Long-term lease obligations

the three months ended March 31, 2025, and 2024, total operating lease expense was $ 36,402 and $ 12,840 , respectively, which is included

the three months ended June 30, 2025, and 2024, total operating lease expense was $ 22,795 and $ 12,841 , respectively, which is included

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

the six months ended June 30, 2025, and 2024, total operating lease expense was $ 59,197 and $ 25,681 , respectively, which is included

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

14 – SEGMENT REPORTING

used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information

available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance.

The Company’s operating segments have been broken out based on similar economic and other qualitative criteria.

The Company operates

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

Company’s CEO is the chief operating decision-maker.

Company classifies its business interests into reportable segments which are:

- 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

Three Months Ended March 31, 2025

Cost of Sales

Net income (loss)

( 1,420,095 )

( 1,345,501 )

( 3,063,997 )

Interest expense

Total Assets as of March 31, 2025

$ 106,358,530

information as of and for the three months ended March 31, 2025 is presented below:-

OF GEOGRAPHIC INFORMATION

March 31, 2025

United States

$ 106,358,530

Three Months Ended March 31, 2024

Cost of Sales

Net income (loss)

Interest expense

Total Assets as of December 31, 2024

$ 104,853,805

information as of and for the three months ended March 31, 2024 is presented below:-

Revenues For The

March 31, 2024

December 31, 2024

United States

$ 104,853,805

used to identify the Company’s reportable segments include the organizational structure of the Company and the financial

information available for evaluation by the chief operating decision-maker (the “ CODM ”) in making

decisions about how to allocate resources and assess performance.

The Company’s operating segments have been broken out based

on similar economic and other qualitative criteria.

The Company operates all reporting segments in one geographical area (the United

Company’s chief operating decision-makers are its co-Chief Executive Officers, who make resource allocation decisions and

assess performance based on financial information presented on an aggregate basis.

There are no segment managers who are held

accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding

Accordingly, as of June 30, 2025, the Company has a single reportable segment and operating segment

The key measures of segment profit

or loss reviewed by our CODM are operating costs.

These metrics are reviewed and monitored by the CODM to manage and forecast cash.

CODM also reviews operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements

15 – SUBSEQUENT EVENTS

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

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

interests in IPS.

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

Chief Operating Officer, each have a beneficial interest in Tollo.

April 8, 2025, the Company also entered into a Stock Purchase Agreement (the “Bonum SPA” and together with the IPS MIPA,

the “Agreements”) with Tollo, pursuant to which Tollo agreed to purchase and the Company agreed to sell all issued and outstanding

shares of common stock of Bonum Health, Inc.

connection with each of the Agreements, the Company agreed to retain certain excluded liabilities of IPS and Bonum including all liabilities:

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

proceedings, or governmental or regulatory inquiries with respect to IPS or Bonum, respectively, prior to the closing under the applicable

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

and documents required to be delivered by the Company;

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

to any actions threatened or initiated by a governmental entity against IPS or Bonum, respectively;

and (v) related to tax returns or

tax matters of the Company, IPS, or Bonum, respectively, for any periods prior to closing under the applicable Agreement.

Company and Tollo have agreed to consummate the closing of each of the Agreements on June 30, 2025, or such other time as the

Company and Tollo may agree.

As consideration for acquiring IPS and Bonum, Tollo has agreed to pay the Company $ 5

million in the form of a promissory note bearing interest at the prime rate.

The promissory note matures on June 30, 2030.

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

interest owed under the promissory note.

The parties closed on the transaction on April 30, 2025.

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

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

the Branded and Specialty Pharma markets.

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

commercial and strategic product development activities at its Scienture, LLC subsidiary.

On April 16, 2025, the Company

issued to the Investor, as a commitment fee, 601,410 shares of the Company’s common stock, in consideration for the Investor’s

execution, delivery of the ELOC Agreement and shares issued in quarter one of 2025 (see Note 9).

In July 2025 Board approved

a capital raise by the Company in an aggregate amount of up to $ 3,000,000

pursuant to a form of Common Stock Purchase Agreement (the

“ Purchase Agreement ”).

The Purchase Agreement provides that the Company would issue and sell, and investors

would purchase, shares of the Company’s common stock, for a price per share of $ 1.59 .

Between July 18, 2025 and August 6, 2025, we entered into Purchase

Agreements with various investors, pursuant to which such investors purchased, and the Company sold, an aggregate of 754,716

shares of the Company’s common stock.

As of August 6, 2025, we have received approximately $ 1.3

million in aggregate proceeds, though the Company may continue to raise additional proceeds of up to the $ 3

million approved by the Board.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements