Financial Performance - Revenues for Q3 2025 reached $590,050, a significant increase from $64,861 in Q3 2024, representing a growth of 810%[17] - Gross profit for Q3 2025 was $574,621, compared to $3,883 in Q3 2024, indicating a substantial improvement[17] - Operating loss for Q3 2025 was $4,361,206, compared to a loss of $3,497,791 in Q3 2024, indicating an increase in losses[17] - Net loss from continuing operations for the nine months ended September 30, 2025, was $13,391,931, compared to $11,441,764 for the same period in 2024[17] - The company reported a net loss per common share from continuing operations of $(0.19) for Q3 2025, compared to $(1.34) for Q3 2024[17] - The company reported a net loss from continuing operations of $3,607,361 for the three months ended September 30, 2025, compared to a loss of $3,183,601 for the same period in 2024[69] - The basic net loss per common share from continuing operations was $(0.19) for the three months ended September 30, 2025, compared to $(1.34) for the same period in 2024[69] Assets and Liabilities - Total current assets decreased to $1,421,074 as of September 30, 2025, down from $6,305,477 as of December 31, 2024[14] - Total liabilities decreased to $22,160,659 as of September 30, 2025, compared to $25,781,684 as of December 31, 2024, reflecting a reduction of approximately 14%[14] - Total stockholders' equity increased to $82,669,631 as of September 30, 2025, up from $79,072,121 as of December 31, 2024[14] - Cash balance increased to $355,692 as of September 30, 2025, from $308,096 as of December 31, 2024[14] Operating Expenses - The company incurred total operating expenses of $4,935,827 in Q3 2025, compared to $3,501,674 in Q3 2024, marking an increase of approximately 41%[17] - For the nine months ended September 30, 2025, the net loss from continuing operations was $13,391,931, compared to a net loss of $11,441,764 for the same period in 2024, representing an increase of approximately 17.0%[22] - The company reported stock-based compensation of $1,820,433 for the nine months ended September 30, 2025, significantly higher than $25,147 in the same period of 2024[22] Cash Flow - Net cash used in operating activities from continuing operations was $8,207,188 for the nine months ended September 30, 2025, compared to $10,585,173 for the same period in 2024, indicating a decrease of approximately 22.5%[22] - The cash at the end of the period for September 30, 2025, was $355,692, down from $579,103 at the end of September 30, 2024[22] Strategic Actions - Scienture Holdings, Inc. changed its legal name from "TRxADE HEALTH, Inc." on September 20, 2024, and acquired Scienture, LLC in July 2024[24] - The company completed the sale of Bonum Health, LLC on April 30, 2025, as part of its strategy to dispose of legacy subsidiaries[25] - The Company completed the sale of its subsidiaries IPS, Softell, and Bonum Health, Inc. to Tollo for a $5 million promissory note[34] - The divestitures are part of a strategic realignment aimed at optimizing the Company's portfolio and accelerating growth in the Branded and Specialty Pharma markets[35] - The Company intends to use proceeds from the divestment to facilitate high-growth commercial and strategic product development activities at its Scienture subsidiary[35] Acquisitions and Goodwill - The Company acquired intangible assets valued at $76.4 million and recognized goodwill of $21.37 million in the Scienture acquisition[55] - Goodwill recognized from the Scienture acquisition amounted to $21,372,960, primarily due to expected go-to-market synergies[82] - As of September 30, 2025, no goodwill impairment was recognized, as management assessed that it was not likely that the fair value of reporting units was less than their carrying values[59] Product Development - The product technologies acquired in the Scienture acquisition include new potential treatments for hypertension, migraine, pain, and thrombosis, which are in various phases of development[60] - Scienture has four primary product candidates in its development pipeline, focusing on novel treatments for hypertension, migraine, pain, and thrombosis[212] - SCN-102 received regulatory approval in March 2025, with commercialization starting in Q3 2025; SCN-104 expected to achieve approval by late 2027 or early 2028[105][106] Debt and Financing - The Company issued convertible debentures totaling up to $12,222,222, with the first tranche of $3,333,333 sold for $3,000,000, reflecting a 10% original issue discount[109][110] - The NVK Loan Agreement with NVK Finance, LLC was for $2,000,000, accruing interest at 15.50%, with an outstanding balance of $2,656,250 as of September 30, 2025[123][124] - The Company issued a senior secured promissory note (Streeterville Note) for $3,911,111.11 with a 9% interest rate and received net proceeds of $3,500,000, which were used for working capital and debt repayment[190] - The Company sold 15,722,759 shares under the ATM Program, generating $15,568,236 in gross proceeds, which were used to fully repay the Streeterville Note[192] Compensation and Employment - Dr. Mani's annual base salary increased from $325,000 to $400,000, and Dr. Hariharan's increased from $175,000 to $400,000 as part of the Employment Amendments effective October 1, 2025[194] - The Company recognized a total stock-based compensation cost of $1,512,995 due to the cancellation of 2,000,000 stock options and the granting of 2,000,000 shares of common stock[164] Legal and Settlement Matters - The Company entered into a Settlement Agreement with Kesin Pharma Corporation, agreeing to pay $1.285 million plus 8% interest and legal fees through December 2026[173] - The Company settled a dispute with Kesin Pharma Corporation for $1.285 million plus 8% interest, with payments scheduled through December 2026[195]
Scienture Holdings, Inc.(SCNX) - 2025 Q3 - Quarterly Report