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CONTINGENCIES
 3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
CONTINGENCIES

NOTE 12 – CONTINGENCIES

 

Exclusive License and Commercial Agreements

 

Scienture 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.

 

In 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

 

This 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.

 

In August 2024, Kesin demanded immediate payment of the full amount under the Kesin Termination Agreement, alleging the full amount is payable in connection with the consummation Scienture LLC’s business combination with the Company. Scienture LLC has disputed that the amount is payable, and the parties entered into discussions to resolve the issue.

 

On March 11, 2025, Kesin filed a complaint against Scienture LLC in the United States District Court for the Eastern District of New York seeking payment of the disputed $1.285 million. There can be no assurance that an amicable resolution will be obtained. Scienture LLC intends to vigorously defend itself in the litigation.