SCNX 10-K & 10-Q changes, risk factors and insider trading

We hold a clinical-stage biopharmaceutical company with a limited operating history. Scienture LLC was formed in 2019 and its operations operations to date have been limited to organizing and staffing its company, business planning, raising capital, identifying and developing its product candidates for the treatment of central nervous system (“CNS”) and cardiovascular (“CVS”) diseases, securing intellectual property rights, and planning and undertaking preclinical studies and clinical trials. Scienture LLC has not yet demonstrated an ongoing ability to generate revenues, obtain regulatory approvals, manufacture any product on a commercial scale or arrange for a third party to do so on its behalf or conduct sales and marketing activities necessary for successful product commercialization. Scienture LLC’s limited operating history as a company makes any assessment of its future success and viability subject to significant uncertainty. Scienture LLC will encounterencounters risks and difficulties frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields, and Scienture LLC has not yet demonstrated an ability to successfully overcome such risks and difficulties. If Scienture LLC does not address these risks and difficulties successfully, its business will suffer.

Biopharmaceutical product development entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and reimbursement and become commercially viable, and therefore any investment in us is highly speculative. Accordingly, you should consider our prospects, factoring in the costs, uncertainties, delays and difficulties frequently encountered by companies in clinical development, especially clinical-stage biopharmaceutical companies such as us. Any predictions you make about our future success or viability may not be as accurate as they would otherwise be if itwe had a longer operating history or a history of successfully developing and commercializing pharmaceutical products. We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving Scienture LLC’sour business objectives.

Additionally, our expenses could increase beyond our expectations if we are required by the FDA or other comparable regulatory authorities to perform clinical trials in addition to those that we currently expect, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing itsour clinical trials or the development of any of our product candidates.

We need additional capital which may not be available when needed or on commercially acceptable terms, thereby casting substantial doubt on our ability to continue as a going concern.terms. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates. To the extent outstanding loan conversion rights associated with our existing indebtedness are exercised, there will be dilution to our stockholders.

Scienture LLC’s activities of developingDeveloping biopharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive and uncertain process that takes years to complete. Moving forward, we expect our expenses to continue to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek regulatory and marketing approval for, our product candidates. Even if our current or future product candidates are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Because of the numerous risks and uncertainties associated with research and development of product candidates, we are unable to predict the timing or amount of our working capital requirements.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations with existing cash, cash equivalents, equivalents, short-term investments, and any future equity or debt financings and upfront and milestone and royalty payments, if any, received under any future licenses or collaborations. While thewe Company believesbelieve that itsour cash as of the date of this RegistrationAnnual StatementReport will be be sufficient to meet itsour funding requirements during the next 12 months, this belief may prove to be wrong as we could utilize available available capital resources sooner than we expect. We will eventually need to raise additional capital or secure debt funding to support on-going operations. This may include raising additional financing on an opportunistic basis in the future. For example, we may seek to raise equity capital or obtain additional capital in the near term due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for current or future operating plans.

We have invested and expect to continue to invest in new businesses, products, services, and technologies. Such endeavors may involve significant risks and uncertainties, including insufficient revenues from such investments to offset any new liabilities assumed and expenses associated with these new investments, inadequate return of capital on our investments, distraction of management from current operations, and unidentified issues not discovered in our due diligence of such strategies and offerings that could cause us to fail to realize the anticipated benefits of such investments and incur unanticipated liabilities. Because these new ventures are inherently risky, no assurance can be given that such strategies and offerings will be successful and will not adversely affect our reputation, financial condition, and operating results. To date we have taken losses and/or write-downs on several businesses, products, services, and technologies. For example:

The use of resources for new businesses and new products, services, and technologies, to the extent such new businesses and new products, services, and technologies do not generate revenues or profits may take management’s focus and time away from more profitable endeavors, may require the Companyus to take significant write-downs or write-offs, may take funding away from the Company’sour other operations or growth opportunities, which may ultimately be more profitable, and may have a material adverse effect on the Company’sour cash flows, liquidity and revenues, any or all of which may cause the value of the Company’sour securities to decline in value or become worthless.

Scienture LLC has not completed the development of anySCN-102, which received FDA regulatory approval in March 2025 and commenced commercialization in the third quarter of 2025. The remaining product candidates.candidates Although— ScientureSCN-104, LLCSCN-106, hasand initiatedSCN-107 development for product candidates, all of these candidates, other than SCN-102,— remain in early-stage clinical or preclinical development. Management expects SCN-104 and SCN-106 to achieve regulatory approval in 2027 or 2028, with commercialization projected to begin in 2028, and SCN-107 to achieve regulatory approval in 2028 or 2029, with commercialization projected to begin in 2029. Our future success and ability to generate revenue from Scienture LLC’s product candidates is dependent on our ability to successfully develop, obtain regulatory approval forfor, and commercialize one or more of our remaining product candidates. Even though approved by the FDA, SCN-102 will require substantial additional investment for commercialization, clinical development, regulatory review, and approval in one or more jurisdictions. If any of Scienture LLC’s product candidates encounters safety or efficacy problems, development delays, regulatory issuesissues, or other problems, our development plans and business would be materially harmed.

We may not have the financial resources to continue development of Scienture LLC’sour product candidates, particularly if Scienturewe LLC experience any issues that delay or prevent regulatory approval of, or itsour ability to commercialize, product candidates, including:

In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. Scienture LLCWe may in the future conduct one or more of its clinical trials with one or more trial sites that are located outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to conditions imposed by the FDA, and there can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt our development of the applicable product candidates.

Our success depends upon the continued contributions of our key management and scientific personnel, many of whom have substantial experience with developing therapies, identifying potential product candidates and building the technologies related to the clinical development of our product candidates. However, some of officers and directors have duties and affiliations with other companies. Involvement of our officers and directors in other businesses may present a conflict of interest regarding decisions they make for the Companyus or with respect to the amount of time available for the Company.us.

Given the specialized nature of CNVCNS and CVS diseases and our approach, there is an inherent scarcity of experienced personnel in these fields. fields. As we continue developing product candidates, we will require personnel with medical, scientific, or technical qualifications specific to each program. The loss of any of our officers or directors, in particular our current management team consisting of Shankar Hariharan, Narasimhan Mani,Mani or Rahul Surana, Suren Ajjarapu, or Prashant Patel, could have a materially adverse effect upon our business and future prospects.

We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a partnership or collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed partnerships or collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include the potential differentiation of our product candidates from competing product candidates, design or results of clinical trials, the likelihood of approval by the FDA or other comparable regulatory authorities and the regulatory pathway for any such approval, the potential market for the product candidate, the costs and complexities of manufacturing and delivering the product to patients and the potential of competing products. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available for partnership or collaboration and whether such a partnership or collaboration could be more attractive than the one with the Companyus for our product candidate. If we elect to increase expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop product candidates or bring them to market and generate product revenue.

We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates, and and we lack the resources and the capabilities to do so. Our current strategy is to outsource all manufacturing of itsour product candidates candidates to third parties, including in jurisdictions outside of the United States such as China. As such, we currently rely on third-party manufacturers to provide all of the Active Pharmaceutical Ingredients (“API”) and the final drug product formulation of all of our product candidates that are being used in our clinical trials and preclinical studies. If we were to need an alternate manufacturer, we would incur added costs and delays in identifying and qualifying any such replacement. In addition, we typically order raw materials, API and drug product and services on a purchase order basis and do not enter into long-term dedicated capacity or minimum supply arrangements with any commercial manufacturer. We may not be able to timely secure needed supply arrangements on satisfactory terms, or at all. Our failure to secure these arrangements as needed could have a material adverse effect on our ability to complete the development of our product candidates or, to commercialize them, if approved. We may be unable to conclude agreements for commercial supply with third-party manufacturers or may be unable to do so on acceptable terms. There may be difficulties in scaling up to commercial quantities and formulation of our product candidates, and the costs of manufacturing could be prohibitive.

If we do not maintain itsour key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing capabilities, which could delay or impair our ability to obtain regulatory approval for our product candidates. If we do find replacement manufacturers, we may not be able to enter into agreements with them on terms and conditions favorable to us and there could be a substantial delay before new facilities could be qualified and registered with the FDA and other comparable regulatory authorities.

Some of our manufacturers are located outside of the United States, including in China. There is currently significant uncertainty about the future relationship between the United States and various other countries, including China, with respect to trade policies, treaties, government regulations and tariffs. Increased tariffs or pending legislation that would impose federal contracting or federal funding limitations on parties directly using or connected to those using the services or equipment of certain foreign entities with known or alleged associations with foreign adversaries could potentially disrupt our existing supply chains and impose additional costs on our business. In particular, certain Chinese biotechnology companies and commercial manufacturing organizations may become subject to trade restrictions, sanctions, and other regulatory requirements by the U.S. government, which could restrict or even prohibit our ability to work with such entities, thereby potentially disrupting our supplies and manufacturing. Additionally, it is possible further tariffs may be imposed that could affect imports of any Active Pharmaceutical Ingredients (“APIs”) used in our product candidates in the future, or our business may be adversely impacted by retaliatory trade measures taken by China or other countries, including restricted access to such raw materials used in its product candidates. Given the unpredictable regulatory environment in China and the United States and uncertainty regarding how the U.S. or foreign governments will act with respect to tariffs, international trade agreements and policies, further governmental action related to tariffs, additional taxes, contracting matters, regulatory changes or other retaliatory trade measures in the future could occur with a corresponding detrimental impact on our business and financial condition.

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

Successful development of Scienture LLC’sour pharmaceutical products involves a lengthy and expensive process, is highly uncertain, and is dependent on numerous factors, many of which are beyond our control. Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including:

In addition, if any of our product candidates receive marketing approval, we will be subject to significant regulatory obligations regarding the submission of safety and other post-marketing information and reports and registration, and will need to continue to comply (or ensure that our third-party providers comply) with current Good Manufacturing Practices (“cGMPs”) and GoodGCPs Clinical Practices (“GCPs”) for any clinical trials that we conduct post-approval. In addition, there is always the risk that we, a regulatory authority or a third party might identify previously unknown problems with a product post-approval, such as adverse events of unanticipated severity or frequency. Compliance with these requirements is costly, and any failure to comply or other issues with our product candidates post-approval could adversely affect our business, financial condition and results of operations.

We may be subject to health information privacy and security laws by the federal government, the states and other jurisdictions in which we may conduct our business. In particular, we may be subject to regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which establishes privacy and security standards that limit the use and disclosure of individually identifiable health information, known as “protected health information,” and requires the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information. We are directly subject to certain provisions of the regulations as a “Business Associate” through our relationships with customers. We are also directly subject to the HIPAA privacy and security regulations as a “Covered Entity” with respect to our operations as a healthcare clearinghouse, specialty pharmacy and medical surgical supply business. If we are unable to properly protect the privacy and security of protected health information entrusted to us, we could be found to have breached our contracts with our customers. Further, if we fail to comply with applicable HIPAA privacy and security standards, we could face civil and criminal penalties. Although we have implemented and continue to maintain policies and processes to assist us in complying with these regulations and our contractual obligations, we cannot provide assurances regarding how these regulations will be interpreted, enforced or applied by the government and regulators to our operations. In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level might also require us to make costly system purchases /or modifications from time to time. For more information, see “Scienture’s Business–Government Regulation–Other Healthcare Laws.”

We have not prepared or submitted an NDA or submitted similar filings to comparable foreign regulatory authorities for product candidates other than SCN-102. An NDA or other similar regulatory filing requesting approval to market a product candidate must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe, effective, pure and potent for each desired indication. The NDA or other similar regulatory filing must also include significant information regarding the chemistry, manufacturing and controls for the product.

The availability and adequacy of coverage and reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers and other third-party payors in the United States are essential for most patients to be able to afford treatments such as our products or product candidates, if approved. Our ability to achieve acceptable levels of coverage and reimbursement for drug treatments by governmental authorities, private health insurers and other organizations will have an effect on our ability to successfully commercialize our products, and potentially attract additional collaboration partners to invest in the development of our product candidates. We cannot be sure that adequate coverage and reimbursement in the United States, the EU or elsewhere will be available for our products or any products that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future. For more information, see “Scienture’s Business–Government Regulation– Pharmaceutical Coverage, Pricing, and Reimbursement.”

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval. For more information, see “Scienture’s Business– Other Regulatory Requirements–Healthcare Reform.”

Scienture LLC is a party to a Feasibility Study and Animal Trial Material Manufacturing Agreement withthe Innocore Technologies, B.V. (“Innocore”), as amended on December 2, 2022 (the “Innocore License”),License, an exclusive and royalty-bearing intellectual property license agreement. In connection with our efforts to expand our pipeline of product candidates, we expect to enter into additional license agreements in the future. We expect that any future license agreements we may enter into may impose various diligence, milestone payment, royalty, insurance, and other obligations on us. If we fail to comply with these obligations, our licensors may have the right to terminate the relevant agreement, in which event we would not be able to develop or market the products covered by such licensed intellectual property, or to pursue other remedies.

a. internal control over financial reporting a. the availability of alternative products from our competitors;

There is no guarantee that we will be able to maintain our listing on Nasdaq for any period of time by perpetually satisfying Nasdaq’s Nasdaq’s continued listing requirements. Our failure to continue to meet these requirements may result in our securities being delisted from Nasdaq. At times, including during our 2023 and 2024 fiscal years, we have received deficiency notices from Nasdaq regarding our inability to comply with various of the continued listing rules (including stockholders’ equity requirements, publicly held share requirements, and timely filing requirements). For example, theon CompanyOctober 14, 2025, we received a written notice from the Listing Qualifications department of Nasdaq on January 3, 2025, indicating that thewe Company (i) waswere not in compliance with Nasdaq Listing Rule 56205450(a)(1), dueas the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”). This written notice had no immediate effect on the listing or trading of our common stock on Nasdaq. According to the Companynotice, notwe holdinghave 180 ancalendar annualdays, meeting of stockholders in 2024 within one year of the Company’s 2023 fiscal year end and (ii) hador until FebruaryApril 18, 2025,13, to2026 .(the We“Initial haveCompliance taken steps to attemptPeriod”), to regain compliance with Nasdaqthe ListingMinimum RuleBid Price 5620(a),Requirement. includingTo byregain schedulingcompliance, the minimum bid price of our common stock must meet or exceed $1.00 per share for a 2024 annualminimum meeting of stockholdersten forconsecutive Marchbusiness 10,days 2025, and filing a proxy statement for such meeting withduring the SECInitial onCompliance January 27, 2025, as amended on February 18, 2025.We timely submitted a plan to Nasdaq proposing to regain compliance by holding the 2024 annual meeting of stockholders on March 10, 2025. On February 24, 2025, Nasdaq notified us that it has accepted our plan and determined to grant us an extension to regain compliance with Nasdaq Listing Rule 5620(a) until March 10, 2025, the date that we will hold the 2024 annual meeting of stockholders.Period.

While thewe Companybelieve believes itwe will be able to timely regain compliance with Nasdaq’s continued listing requirements, there can be no assurance assurance that the Companywe will be able to regain compliance with Nasdaqthe ListingMinimum RuleBid 5620(a)Price Requirement or will otherwise be able to maintain compliance with other Nasdaq listing criteria. If our common stock were to be delisted from Nasdaq, it would likely reduce the liquidity of our common stock, and, among other things, may decrease the attractiveness of our common stock to the investment community, and make it more difficult for us to issue equity securities for capital raising purposes or for acquisitions.

As of the date of this RegistrationAnnual Statement,Report, we had outstanding various warrants, stock options and other securities that are exercisable into shares of our common stock. For the life of the options and warrants, the holders have the opportunity to profit from a rise in the market price of our common stock without assuming the risk of ownership. The issuance of shares upon the exercise of outstanding securities will also dilute the ownership interests of our existing stockholders. The availability of these shares for public resale, as well as any actual resales of these shares, could adversely affect the trading price of our common stock.

Although we declared special cash dividends in the first and third quarters of 2024, those dividends were declared as the result of a sale various business assets and not paid from cash generated in our operations. TheWe Company hashave not historically paid or declared any dividends on our common stock or preferred stock. Any future dividends on common stock will be declared at the discretion of our board of directors and will depend, among other things, on our earnings, our financial requirements for future operations and growth, and other facts as we may then deem appropriate. As such, the return on your investment, if any, has historically been dependent solely on an increase, if any, in the market value of our common stock.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

On July 25, 2024, we acquired a wholly-owned subsidiary, Scienture LLC. Scienture LLC is a New York based branded, specialty pharmaceutical research company whichfocused is engaged inon the research commercialization and development of branded pharmaceuticalproducts products.for Thethe intellectualtreatment propertyof applicationCardiovascular process was initiated in November 2019(CVS) and theCentral productNervous developmentSystem activities(CNS) diseases. commenced in January 2020. Scienture LLC alsolaunched plansits tofirst foraycommercial intoproduct commercializationfor of innovativehypertension and brandedis pharmaceutical products in the USprocess market.of Scienturecommercializing LLC’sits assetssecond inproduct for the treatment of opioid overdose. Its development arepipeline acrossconsists therapeuticsof areasa broad range of novel product candidates including new potential treatments for migraine, thrombosis, pain and indicationsother andrelated cater to different market segments.disorders. Scienture LLC’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.

The following table summarizes ourthe Company’s Consolidated Statements of Cash Flows for the followingyears periodsended December 31, 2025 and 2024:

The following selected consolidated financial data should be read in conjunction with the unauditedaudited consolidated financial statements and the the notes to these statements included above.in this Annual Report.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of theour Annual Report on Form 10-K filed on March 30, 2026, and amended on April 30, 2026. Investors should review the risks disclosed in thesuch Annual Report on Form 10-K and in this Report, prior to making an investment in theus. Company.Our The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in theour Annual Report Form 10-K,this Report, and other reports we have filed with the SEC, any one or more of which could, directly or indirectly, cause the Company’sour actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’sour business, financial condition, operating results and stock price.

OnTogether with our wholly-owned subsidiary, Scienture, LLC, which we acquired on July 25, 2024, we acquiredare a wholly-ownedCommack, subsidiary,New ScientureYork LLC.based Scienturespecialty pharmaceutical LLCcompany isfocused aon providing enhanced value to patients, physicians and caregivers through developing, bringing to market, and distributing novel specialty pharmaceutical companyproducts to satisfy unmet market needs. We are particularly focused on the commercialization and development of products for the treatment of Cardiovascular (“CVS”) and Central Nervous Nervous System (“CNS”) diseases.diseases Scientureas LLCwell as a broad range of novel product candidates including new potential treatments for hypertension, migraine, pain and thrombosis and other related disorders. To date, we have launched ARBLI™, its firsta commercial product for hypertensionthe treatment of hypertension, and iswe are in the process of commercializing itsa second productproduct, REZENOPY™, for the treatment of opioid overdose. ItsOur development pipeline consists of a broad range of novel product product candidates including new potential treatments for migraine, thrombosis, pain and other related disorders. ScientureOur LLC’s mission is to bring to market innovative technology-based products to address unmet medical needs. ItsWe targetedtarget a diversified portfolio consistsof of short termshort- and long-term opportunities with efficient development, regulatory, and go to market strategies.

Scienture’sOur vision is to be a leader in the industry by developing and commercializing new medicinesbranded pharmaceutical products for the treatment of CNS and CVS diseases and across other therapeutic areas. Key elements of Scienture’sour strategy to achieve this vision include:

ScientureWe currently has fourtwo commercial products that have been launched and three primary product candidates in itsour development pipeline, summarized below, and isare engaged in a variety of research and development efforts to develop novel product candidates for the treatment of various disease conditions. To date, Scienturewe hashave generated generated limited revenue from product sales and will not generate meaningful revenues until itwe fully commercializes its our FDA-approved product candidatecandidates (Arbli™ (SCN-102and REZENOPY™) and successfully obtainsobtain regulatory approval for, and commercializes,commercialize, itsour other product candidates. The progress of Scienture our products itsin our development pipeline to date is represented by the green bars shown below.

ScientureWe hashave devoted and will continue to devote significant resources to sales and marketing of our commercial products and research and development activities, and expects to incur significant expenses as Scienturewe continuescontinue advancing itsour product candidates towards FDA approval and expanding product indications for approved products and itsour intellectual property portfolio. Scienture’s Our expectations regarding itsour research and development programs are subject to risks, including the risk that Scienture’s our financial condition and results of operations may be materially and adversely affected by delays and failures in the completion of clinical development of itsour product candidates, which could increase its costs or delay or limit our ability to generate revenues.

ScientureWe currently dependsdepend on third-party commercial manufacturing organizations (“CMOs”) for itsour manufacturing operations, including the production of raw materials, finished dosage form product, and product packaging for both itsour planned product commercialization and for use in itsour preclinical and clinical research. ScientureWe doesdo not own or operate manufacturing facilities for the production of any of itsour product candidates nor doesdo Scienturewe have plans to develop its ownsuch manufacturing operations in the foreseeable future to support clinical trials or commercial production. ScientureWe currently employs internal resources to manage itsour manufacturing contractors.

Scienture isWe are in discussion with CMOs headquartered in North America, Europe and Asia for itsour pipeline product candidates. These CMOs offer a comprehensive range of commercial contract manufacturing and packaging services.

If Scienturewe failsfail to produce itsour products and product candidates in the volumes that itwe requiresrequire on a timely basis, or failsfail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, Scienturewe may face delays in the development and commercialization of itsour products and product candidates or be required to withdraw itsour products from the market for risks associated with manufacturing and supply of itsour products and product candidates.

SCN-102 (ARBLITMARBLI™ - Losartan Oral Suspension)

SCN-102, with the brand name ArbliTM,Arbli™, is an oral liquid formulation of losartan potassium for (i) treatment of hypertension, to lower blood pressure in adults and children greater than 6 years old, (ii) reduction of the risk of stroke in patients with hypertension and left ventricular hypertrophy, and (iii) treatment of diabetic nephropathy with an elevated serum creatinine and proteinuria in patients with type 2 diabetes and a history of hypertension. SCN-102 was approved by the FDA in March 2025, making SCN-102 the first and only FDA-approved ready-to-use oral liquid losartan in the U.S. market.

SCN-102 has twothree formulation composition and method of use patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the “orange book”: (i) Patent #: 11,890,273, Issue Date: February 6, 2024, titled “LOSARTAN LIQUID FORMULATIONS AND METHODS OF USE”, Expiration Date: October 7, 2041 and (ii) Patent # 12,156,869; Issue Date: December 3, 2024, titled “LOSARTAN LIQUID FORMULATIONS AND METHODS OF USE”. SCN-102 also has a third patent titled “LOSARTAN LIQUID FORMULATION AND METHODS OF USE” that was issued on April 21, 2026, and expires on October 7, 2041.

SCN-110 (REZENOPYTMREZENOPY™ – Naloxone HCl Nasal Spray)

ScientureOn March 4, 2025, Scienture, LLC entered into an Exclusive Commercial and Supply Agreement (the “Kindeva Agreement”) with Summit Biosciences Inc., a wholly-owned subsidiary of Kindeva, on March 4, 2025, pursuant to which Kindeva granted Scienture LLCus an exclusive, non-transferrable, non-sublicensable right and license to commercialize REZENOPYTM (Nalaxone HCIhydrochloride nasal spray 10mg/0.11mL) within the United States and its territories. ScientureWe LLC intendsintend to use the exclusive right and license to price, launch, promote, market, distribute, and educate the public on REZENOPYTM.

REZENOPYTMREZENOPY™ (Naloxone HClhydrochloride Nasal Spray, 10mg) is the highest FDA-approved nasal spray dose available in the U.S. market. The product provides maximum naloxone protection in a single easy-to-use device and caters to the segment of patients who need multiple doses of lower strength for stabilization in emergency situations. REZENOPYTMREZENOPY™ provides potential longer duration of opioid receptor block, improves chances of quicker reversal and possible coverage against multiple abuse agents inclusive of synthetic opioids and combinations, through a single dose administration of 10mg naloxone hydrochloride. High dose REZENOPY™ improves the chances of reversing potent opioids quickly and reducing the requirement of MNA.

SCN-110 has onetwo issued formulation composition and method of use patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the “orange book”: (i) Patent #: 12,514,854 B2,12,514,854, Issue Date: January 6, 2026, an Orange Book-listable patent, titled “DRUG PRODUCTS FOR INTRANASAL ADMINISTRATION AND USES THEREOF”, Expiration Date: February 5, 2041 and (ii) Patent #: 12,622,903, Issue Date: June 2, 2026, an Orange Book-listable patent, titled “DRUG PRODUCTS FOR INTRANASAL ADMINISTRATION AND USES THEREOF”, Expiration Date: February 5, 2041.

ScientureWe hashave had discussions with the FDA regarding itsthe development program for SCN-104, with the FDA indicating that the reference product selected selected for a comparative regulatory study and proposed plan for manufacturing New Drug Application registration batches are acceptable. The FDA also provided Scientureus with feedback on nonclinical safety studies and stability testing. ScientureWe isare working to scale the formulation formulation to enable future commercial scale production and the pen has been optimized for commercial use. Currently, Scienturewe is are focused on planning bioequivalence studies and increasing manufacturing activities for the SCN-104 injection pen. ScientureWe plansplan to initiate a Phase 1 single dose study in healthy adults in 2026,early 2027, following submission of an Investigational New Drug application (an “IND”), if the IND is cleared by the FDA.

Scienture isWe are developing a potential biosimilar, SCN-106, based on Cathflo Activase, a reference product that is a thrombolytic agent that binds to fibrin in clots and converts entrapped plasminogen to plasmin. SCN-106 is a sterile, purified glycoprotein that is synthesized using the complementary DNA for natural human tPA obtained from a Chinese hamster ovary cell-line.

ScientureSpecifically, iswe are working with Anthem Biosciences Pvt, Ltd. to develop a biosimilar product that utilizes the same mechanism(s) of action for the proposed condition of use, and has the same route of administration, dosage form, and strength as the reference product. The development program is focused on establishing the analytical similarity of SCN-106 to the reference product. Multiple clones of CHO cells have been produced to synthesize lots of SCN-106 which were screened for similarity to the reference product for several key biochemical quality attributes as well as overall protein yield and finalization of a lead clone.

ScientureWe completed a Biosimilar Initial Advisory meeting with the FDA in June 2023 to discuss the CMC, non-clinical, and clinical studies required for regulatory approval. As a result of this meeting, Scienturewe learned that itsour analytical strategy for initiating analytical similarity studies between SCN-106 and a proposed biosimilar product is acceptable. ScientureWe also learned that SCN-106 is suitable for further development and received guidance from the FDA on a comparable clinical study needed to demonstrate biosimilarity of SCN-106 and the reference product. In this regard, Scienturewe waswere informed that no additional safety, PK, toxicology or dose range finding studies will be required due to the method of use (very limited exposure) and the availability of an extensive amount of data on the original brand product. The only clinical requirement is a comparative phase 3 clinical study in the sensitive population to demonstrate that there are no clinically meaningful differences between SCN-106 and the currently marketed product.

SCN-106 is a potential biosimilar and considered by the Company to be part of itsour product development portfolio, however thewe Company isare not pursuing patent protection for this product.

SCN-107 is a long-acting injection suspension formulation of a non-opioid analgesic that is indicated for postsurgical local and regional analgesia. Scienture’sOur long-acting formulation, SCN-107, is a novel microsphere-based formulation of bupivacaine that comprises the drug in polymer-based microspheres and is intended to provide pain management over a period of 5-7 days. The product candidate is designed to potentially provide longer term post-surgical pain relief compared to the currently available products in the market.

Based on initial discussions with FDA regarding this program, Scienturewe believesbelieve this product candidate would require at least one Phase 3 clinical trial to support submission of a marketing application. ScientureWe anticipatesanticipate submitting an IND in 2027 and, if cleared by the FDA, initiating a Phase 1 single dose study in healthy adults in 2025plan to conduct an initial assessment of safety and tolerability of SCN-107.

ScientureScienture, hasLLC previously entered into a Feasibility Study and Animal Trial Material Manufacturing Agreement with Innocore Technologies, B.V. (“Innocore”), as amended on December 2, 2022 (the “Innocore License”), for certain intellectual property rights associated with SCN-107. Under the Innocore License, Innocore granted Scientureus a worldwide exclusive, milestone, royalty-bearing and sublicensable license to certain patent rights for the research and development of SCN-107 in postsurgical local and regional analgesia. Pursuant to the Innocore License, Scienturewe isare required to make low single-digit percentage royalty payments based on annual net sales of licensed products for the first three years of sales on a country-by-country basis, subject to a low single digit increase as of the fourth year of sales on a country-by-country basis.

SCN-107 has a formulation composition and method of use application pending in the U.S. (Appl. No. 17/996,995; Filing Date: October 24, 2022; Expiration Date: on or after April 22, 2041). Applications in Canada and Europe are currently pending. As described above, the Companywe licenseslicense certain patent rights from Innocore for the research and development of SCN-107.

Cash was $3,542,754$8,188,140 as of MarchJune 31,30, 2026, compared to $6,662,008 as of December 31, 2025. In addition, we held restricted cash of $3,012,271 as of June 30, 2026, representing proceeds of the B Note held in a lender-controlled deposit account. We expect that our future available capital resources will consist primarily of cash generated from Scienture’sour operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.

Our primary objectives for the remainder of 2026 are expected to be the continued implementation of Scientureour business plan, and to complete potential strategic transactions of our business-to-consumer subsidiaries, which may include a potential sale, spin-off, fund raising, combination or other strategic transaction.plan. There can be no assurance that our operations will generate significant positive cash flow, or that additional funds will be available to us, through borrowings or otherwise, on favorable terms if required in the future, or at all. We may also raise additional funding in the future through the sale of equity securities.

We may require additional funding in the future to implement on our business plan and potentially to expand or complete acquisitions. The sources of this capital are expected to be equity investments and notes payable. Our plan for the next twelve months is to continue exploring strategic transactions or relationships with counterparties in industries that we deem synergistic or complimentary to those of the Company,us, while also seeking to expand our Scienture operations organically or through acquisitions, as funding and opportunities arise. In the event we require additional funding, we plan to raise that through the sale of debt or equity, 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.

The accompanying interim consolidated financial statements have been prepared assuming that the Companywe 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. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

As of MarchJune 31,30, 2026, the Companywe had an accumulated deficit of $83,953,501.$86,775,872. As of MarchJune 31,30, 2026, the Companywe had $3,542,754$8,188,140 in cash and $3,012,271 in restricted cash.

We will need to raise additional capital or secure debt funding to support on-going operations, and to fund the assets and operations of 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 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 While these factors raiseinitially indicated substantial doubt about the ability of the Company to continue as a going concern. Unless concern, management is able to obtain additional financing, it is unlikelybelieves that the Company will be able to meet its fundingexisting requirementscash duringon thehand, next 12 months. The financial statements do not include any adjustments that might resultrevenues from the outcomecommercialization of thisARBLI™ uncertainty.(SCN-102) and REZENOPY™ (SCN-110) and its planned financing activities alleviate that doubt.

Cash used in operating activities for the threesix months ended MarchJune 31,30, 20262026, was $2,919,255,$6,051,597, compared to cash used in operating activities of $2,956,457$4,990,704 for the threesix months ended MarchJune 31,30, 2025. The slightincrease decreaseof $1,060,893 was primarily due to the $400,000 repayment of the development agreement liability and other changes in working capital, including reductions in accounts payable and accrued liabilities, partially offset by highera operatinglower expensesnet loss during the 2026 period.

There was no cash provided by or used in investing activities for the threesix months ended MarchJune 31,30, 20262026, or 2025.

Cash usedprovided inby financing activities for the threesix months ended MarchJune 31,30, 20262026, was $200,000,$10,590,000, compared to cash provided by financing activities of $4,697,999 for the threesix months ended MarchJune 31,30, 2025. Cash used in financing activities for the three months ended March 31, 2026 reflected the $200,000 repayment of the development agreement liability. Cash provided by financing activities for the threesix months ended June 30, 2026, reflected March$10,590,000 31,of 2025proceeds from the issuance of the Streeterville notes in April 2026, net of issuance costs. Cash provided by financing activities for the six months ended June 30, 2025, was primarily attributable to gross proceeds of approximately $4,598,000 from the issuance of common stock pursuant to the an equity line commitment, partially offset by other financing activity.

Three Month Period Ended MarchJune 31,30, 2026 compared to Three Month Period Ended MarchJune 31,30, 2025

Cost of goods sold for the three months ended MarchJune 31,30, 20262026, was $2,475,$7,860, compared to $9,585$0 for the three months ended MarchJune 31,30, 2025, resulting in gross profit of $53,850$335,779 for the three months ended MarchJune 31,30, 2026 compared to gross profit of $673$0 for the three months ended March 31,June 30, 2025.

Wage and salary expense decreased by $276,060$362,328 for the three months ended MarchJune 31,30, 2026 to $420,008$411,411, compared to $696,068$773,739 for the comparable comparable period in 2025. The decrease was primarily due to lower headcount following the disposition of legacy subsidiaries in April 2025. Following the dispositions, our workforce is concentrated in a small number of research and development, commercial and administrative personnel, and we have engaged a contract commercial organization — the cost of which is reflected in professional fees — in lieu of building an internal sales force.

Accounting and legal expense decreased by $144,647$263,868 for the three months ended MarchJune 31,30, 2026 to $326,178,$117,815, compared to $470,825$381,683 for the comparable period in 2025. The decrease was primarily due to lowerelevated activity in the prior-year quarter associated with the disposition of the legacy subsidiaries and related corporate transactions and SEC filingfilings, andwhich did not recur in 2026. With our simplified corporate transaction-relatedstructure, professionalwe servicesexpect activityaccounting duringand legal expense to remain below prior-year levels for the 2026remainder period.of 2026.

General and administrative expenses (including stock-based compensation expense) decreased by $281,084$2,558,974 for the three months ended MarchJune 31,30, 2026, 2026 to $1,074,864,$368,790, compared to $1,355,948$2,927,764 for the comparable period in 2025. The decrease was primarily duebecause tothe lowerprior-year stock-basedquarter compensationincluded substantial non-cash charges for common stock issued for services, which did not recur in 2026; stock option expense duringrecognized in the three months ended June 30, 2026 was $103,457. The decrease occurred notwithstanding the inclusion in the 2026 period.quarter of $453,846 of amortization of intangible assets, which had no counterpart in the prior-year quarter and is expected to continue at a comparable quarterly rate.

Technology expense decreased by $45,857$14,269 for the three months ended MarchJune 31,30, 20262026, to $15,763,$7,139, compared to $61,620$21,408 for the comparable period in 2025. The decrease was primarily due to lower software-related expenses following the disposition of IPS in April 2025.

Research and development expense for the three months ended MarchJune 31,30, 20262026, was $793,984,$1,166,605, compared to $574,679$843,549 for the comparable period in 2025, an increase of $219,305.$323,056. The increase was primarily dueattributable to higher contract research and contract manufacturing organization costscosts, relatedwhich tocomprised substantially all of our research and development expense for the quarter, driven by the continued advancement of pipelineSCN-106 (Alteplase) and SCN-104 (DHE). We expect research and development expense to continue to increase as our product candidates.candidates advance. Total expenses by program were as follows:

Interest expense was $37,019$269,785 for the three months ended MarchJune 31,30, 2026, compared to $670,784$653,493 for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to the repayment in full of the Arenacertain convertible debentures during 2025 and the related cessation of debt discount amortization.amortization, partially offset by stated interest and debt discount amortization on the Streeterville notes issued in April 2026.