Scienture Holdings, Inc. Leases Disclosure
NOTE 14 – LEASES
The Company entered into a lease agreement for the period of October 2018 to November 2023. At inception, management had included the renewal period from November 2023 to November 2028 within the initial recognition of the related right of use assets and lease liabilities, as it was reasonably expected, at the time, that the renewal option would be exercised. The Company determined that the new lease required measurement and recognition of the lease liability and right-of-use assets of $313,301. The lease is classified as an operating lease. No incentives were included in the lease.
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.
On July 25, 2024, the Company entered into and closed the Scienture Merger. Pursuant to the Scienture Merger Agreement, the Company acquired right of use asset value of $61,578 and right of use liability of $61,886 on the acquisition date together with all the assets and liabilities of Scienture.
The table below reconciles the fixed component of the undiscounted cash flows for and the total remaining years to the lease liabilities recorded in the consolidated balance sheet as of December 31, 2025.
Supplemental balance sheet information related to leases are as follows:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Weighted-average remaining lease term (in years) | 0.58 | 3.48 | ||||||
| Weighted-average discount rate | 15.50 | % | 10.90 | % | ||||
| Future lease obligations | ||||
| 2026 | 17,823 | |||
| Total minimum lease payments | 25,461 | |||
| Less: effect of discounting | (1,324 | ) | ||
| Present value of future minimum lease payments | 24,137 | |||
| Less: current obligation under lease | 24,137 | |||
| Long-term lease obligations | $ | |||
For the year ended December 31, 2025, total operating lease expense was $75,373 and for the year ended December 31, 2024, total operating lease expense was approximately $97,000, which is included in general and administrative expenses in the consolidated statements of operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 30, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Apr 22, 2024 | |
| 2022 | Mar 27, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.