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SCI — Interim / Quarterly Report 2025
Apr 16, 2026
52383_rns_2026-04-16_864f2f74-ef9e-4796-8d0e-3dde33730136.pdf
Interim / Quarterly Report
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Stock Code:4119
SCI PHARMTECH, INC. AND SUBSIDIARIES
Consolidated Financial Statements
With Independent Auditors' Review Report
For the Six Months Ended June 30, 2025 and 2024
Address: No.61, LN. 309, HAIHUN.RD., LUZHU DIST., TAOYUAN CITY 33856, TAIWAN (R.O.C)
Telephone: (03)354-3133
The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.
2
Table of contents
| Contents | Page |
|---|---|
| 1. Cover Page | 1 |
| 2. Table of Contents | 2 |
| 3. Independent Auditors’ Review Report | 3 |
| 4. Consolidated Balance Sheets | 4 |
| 5. Consolidated Statements of Comprehensive Income | 5 |
| 6. Consolidated Statements of Changes in Equity | 6 |
| 7. Consolidated Statements of Cash Flows | 7 |
| 8. Notes to the Consolidated Financial Statements | |
| (1) Company history | 8 |
| (2) Approval date and procedures of the consolidated financial statements | 8 |
| (3) New standards, amendments and interpretations adopted | 8~10 |
| (4) Summary of material accounting policies | 10~11 |
| (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty | 11 |
| (6) Explanation of significant accounts | 11~34 |
| (7) Related-party transactions | 34~36 |
| (8) Pledged assets | 36 |
| (9) Commitments and contingencies | 36 |
| (10) Losses Due to Major Disasters | 36 |
| (11) Subsequent Events | 36 |
| (12) Other | 37 |
| (13) Other disclosures | |
| (a) Information on significant transactions | 37~38 |
| (b) Information on investees | 39 |
| (c) Information on investment in mainland China | 39 |
| (14) Segment information | 39 |
KPMG
李侃建業聯合會計師事務所
KPMG
台北市110615信義路5段7號68樓(台北101大樓)
68F., TAIPEI 101 TOWER, No. 7, Sec. 5,
Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)
電話 Tel +886 2 8101 6666
傳真 Fax +886 2 8101 6667
網址 Web kpmg.com/tw
Independent Auditors' Review Report
To the Board of Directors of SCI Pharmtech, Inc.:
Introduction
We have reviewed the accompanying consolidated balance sheets of SCI Pharmtech, Inc. and its subsidiaries as of June 30, 2025 and 2024, and the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2025 and 2024, and changes in equity and cash flows for the six months ended June 30, 2025 and 2024, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.
Scope of Review
Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with the Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing of the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Basis for Qualified Conclusion
As stated in Note 6(f), the other equity accounted investments of the SCI Pharmtech, Inc. and its subsidiaries in its investee companies of $133,431 thousand and $136,985 thousand as of June 30, 2025 and 2024, respectively, and its equity in net earnings (losses) on these investee companies of $(12,961) thousand, $(3,705) thousand, $(22,666) thousand and $(7,823) thousand, for the three months and six months ended June 30, 2025 and 2024, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.
KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
KPMG
Qualified Conclusion
Except for the adjustments, if any, as might have been determined to be necessary had the consolidated financial statements of certain equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements, do not present fairly, in all material respects, the consolidated financial position of SCI Pharmtech, Inc. and its subsidiaries as of June 30, 2025 and 2024, and of its consolidated financial performance for the three months and six months ended June 30, 2025 and 2024, as well as its consolidated cash flows for the six months ended June 30, 2025 and 2024 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
The engagement partners on the review resulting in this independent auditors' report are Hsin, Yu-Ting and Huang, Keng-Chia.
KPMG
Taipei, Taiwan (Republic of China)
August 7, 2025
Notes to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.
The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.
4
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
SCI PHARMTECH, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 2025, December 31, 2024, and June 30, 2024
(expressed in thousands of New Taiwan dollars)
| Assets | June 30, 2025 | December 31, 2024 | June 30, 2024 | ||||
|---|---|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % | ||
| Current assets: | |||||||
| 1100 | Cash and cash equivalents (note 6(a)) | $ 250,909 | 4 | 582,382 | 8 | 846,821 | 12 |
| 1110 | Current financial assets at fair value through profit or loss (note 6(b)) | 107,695 | 1 | 110,374 | 1 | 64,634 | 1 |
| 1170 | Notes and accounts receivable, net (notes 6(d) and 6(s)) | 212,926 | 3 | 289,514 | 4 | 368,812 | 6 |
| 1206 | Other receivables | 17 | - | - | - | 7 | - |
| 1310 | Inventories, net (note 6(e)) | 611,416 | 9 | 620,897 | 9 | 635,271 | 9 |
| 1470 | Other current assets | 70,961 | 1 | 57,220 | 1 | 104,014 | 2 |
| 1,253,924 | 18 | 1,660,387 | 23 | 2,019,559 | 30 | ||
| Non-current assets: | |||||||
| 1518 | Non-current financial assets at fair value through other comprehensive income (note 6(c)) | 121,413 | 2 | 81,427 | 1 | 89,761 | 1 |
| 1550 | Investments accounted for using equity method (note 6(f)) | 133,431 | 2 | 156,097 | 2 | 136,985 | 2 |
| 1600 | Property, plant and equipment (notes 6(g), 7 and 8) | 5,005,883 | 71 | 4,794,453 | 67 | 3,938,905 | 58 |
| 1755 | Right-of-use assets (note 6(h)) | 48,681 | 1 | 8,780 | - | 3,759 | - |
| 1761 | Investment property, land (notes 6(i) and 7) | 228,012 | 3 | 228,012 | 3 | 228,012 | 3 |
| 1780 | Intangible assets | 33,725 | - | 37,765 | 1 | 41,941 | 1 |
| 1840 | Deferred tax assets | 143,817 | 2 | 143,817 | 2 | 153,277 | 2 |
| 1900 | Other non-current assets (notes 6(c) and 6(g)) | 45,370 | 1 | 90,043 | 1 | 220,155 | 3 |
| 5,760,332 | 82 | 5,540,394 | 77 | 4,812,795 | 70 | ||
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |||||
| --- | --- | --- | --- | --- | --- | --- | |
| Amount | % | Amount | % | Amount | % | ||
| Liaors | $ 100 | - | 100 | - | 129,000 | 2 | |
| Short-term borrowings (note 6(j)) | 72,091 | 1 | 58,437 | 1 | 51,905 | 1 | |
| Notes and accounts payable | 35,075 | 1 | 94,923 | 1 | 37,475 | - | |
| Current contract liabilities (note 6(s)) | 171,989 | 2 | 193,349 | 3 | 168,385 | 2 | |
| Payables on equipment and construction (note 7) | 68,902 | 1 | 155,325 | 2 | 52,387 | 1 | |
| Payables payable (note 6(q)) | 179,262 | 3 | - | - | 149,387 | 2 | |
| Current tax liabilities | 29,369 | - | 85,251 | 1 | 22,822 | - | |
| Current lease liabilities (note 6(m)) | 4,580 | - | 2,465 | - | 1,737 | - | |
| Other current liabilities (note 6(n)) | 18,568 | - | 21,089 | - | 37,849 | 1 | |
| Long-term borrowings, current portion (note 6(k)) | 436,602 | 6 | 403,439 | 6 | 127,326 | 2 | |
| 1,016,538 | 14 | 1,014,378 | 14 | 778,273 | 11 | ||
| Non-Current liabilities: | |||||||
| Long-term borrowings (note 6(k)) | 402,681 | 6 | 578,009 | 8 | 868,380 | 13 | |
| Non-current tax liabilities | 43,110 | 1 | - | - | - | - | |
| Non-current lease liabilities (note 6(m)) | 44,658 | 1 | 6,374 | - | 2,065 | - | |
| Deferred tax liabilities | 104,453 | 1 | 104,453 | 2 | 103,811 | 2 | |
| Provisions for employee benefits, non-current | 11,620 | - | 11,959 | - | 21,162 | - | |
| Other non-current liabilities (notes 6(k) and 7) | 8,676 | - | 8,676 | - | 8,448 | - | |
| 615,198 | 9 | 709,471 | 10 | 1,003,866 | 15 | ||
| Total liabilities | 1,631,736 | 23 | 1,723,849 | 24 | 1,782,139 | 26 | |
| Equity attributable to owners of parent (note 6(q)): | |||||||
| Ordinary Share | 1,195,087 | 17 | 1,195,087 | 17 | 1,195,087 | 18 | |
| Capital surplus | 2,234,986 | 32 | 2,234,986 | 31 | 2,233,590 | 33 | |
| Legal reserve | 558,060 | 8 | 504,024 | 7 | 504,024 | 7 | |
| Unappropriated retained earnings | 1,353,987 | 19 | 1,532,765 | 21 | 1,099,110 | 16 | |
| Other components of equity | 40,400 | 1 | 10,070 | - | 18,404 | - | |
| Total equity | 5,382,520 | 77 | 5,476,932 | 76 | 5,050,215 | 74 | |
| Total liabilities and equity | $ 7,014,256 | 100 | 7,200,781 | 100 | 6,832,354 | 100 |
See accompanying notes to consolidated financial statements.
5
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
SCI PHARMTECH, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the three months and six months ended June 30, 2025 and 2024
(expressed in Thousands of New Taiwan Dollars, except for earnings per share)
| For the three months ended June 30, | For the six months ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | ||||||
| Amount | % | Amount | % | Amount | % | Amount | % | ||
| 4110 | Operating revenue (notes 6(s) and 7) | $ 371,513 | 100 | 392,716 | 100 | 731,805 | 100 | 702,595 | 100 |
| 5110 | Operating costs (notes 6(e), 6(o) and 12) | 267,618 | 72 | 284,772 | 73 | 548,750 | 75 | 502,778 | 72 |
| 5900 | Gross profit | 103,895 | 28 | 107,944 | 27 | 183,055 | 25 | 199,817 | 28 |
| Operating expenses (notes 6(o) and 12): | |||||||||
| 6100 | Selling expenses | 16,326 | 4 | 19,712 | 5 | 35,680 | 5 | 37,089 | 5 |
| 6200 | Administrative expenses | 18,872 | 5 | 22,452 | 5 | 34,540 | 5 | 41,314 | 6 |
| 6300 | Research and development expenses | 9,315 | 3 | 10,709 | 3 | 19,125 | 2 | 21,313 | 3 |
| 44,513 | 12 | 52,873 | 13 | 89,345 | 12 | 99,716 | 14 | ||
| 6900 | Net operating income | 59,382 | 16 | 55,071 | 14 | 93,710 | 13 | 100,101 | 14 |
| Non-operating income and expenses: | |||||||||
| 7101 | Interest income | 2,282 | - | 3,498 | 1 | 3,922 | 1 | 4,032 | 1 |
| 7190 | Other income (notes 7 and 10) | 6,242 | 2 | 2,689 | 1 | 10,685 | 1 | 5,484 | 1 |
| 7235 | Gains (losses) on financial assets at fair value through profit or loss | 193 | - | 2,854 | 1 | 1,320 | - | 2,026 | - |
| 7510 | Interest expense (note 6(m)) | (1,150) | - | (1,347) | (1) | (2,001) | - | (2,846) | (1) |
| 7590 | Miscellaneous disbursements | (99) | - | (1,338) | - | (189) | - | (1,449) | - |
| 7630 | Foreign exchange gains (losses), net | (51,212) | (14) | 4,699 | 1 | (42,677) | (6) | 18,739 | 3 |
| 7770 | Share of loss of associates and joint ventures accounted for using equity method, net (note 6(f)) | (12,961) | (3) | (3,705) | (1) | (22,666) | (3) | (7,823) | (1) |
| (56,705) | (15) | 7,350 | 2 | (51,606) | (7) | 18,163 | 3 | ||
| 7900 | Profit before tax | 2,677 | 1 | 62,421 | 16 | 42,104 | 6 | 118,264 | 17 |
| 7950 | Less: Income tax expenses (gains) (note 6(p)) | (20,107) | (5) | 228 | - | (12,416) | (2) | 11,562 | 2 |
| 8200 | Profit | 22,784 | 6 | 62,193 | 16 | 54,520 | 8 | 106,702 | 15 |
| 8300 | Other comprehensive income: | ||||||||
| 8310 | Items that may not be reclassified subsequently to profit or loss: | ||||||||
| 8316 | Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income | 2,165 | 1 | (4,489) | (1) | 30,330 | 4 | (7,053) | (1) |
| 8349 | Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss (note 6(p)) | - | - | - | - | - | - | - | - |
| 8300 | Other comprehensive income, net | 2,165 | 1 | (4,489) | (1) | 30,330 | 4 | (7,053) | (1) |
| 8500 | Total comprehensive income | $ 24,949 | 7 | 57,704 | 15 | 84,850 | 12 | 99,649 | 14 |
| Earnings per share (note 6(r)): | |||||||||
| 9750 | Basic earnings per share | $ | 0.19 | 0.52 | 0.46 | 0.89 | |||
| 9850 | Diluted earnings per share | $ | 0.19 | 0.52 | 0.46 | 0.89 |
See accompanying notes to consolidated financial statements.
6
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
SCI PHARMTECH, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the six months ended June 30, 2025 and 2024
(expressed in Thousands of New Taiwan Dollars)
Balance at January 1, 2024
Profit for the six months ended June 30, 2024
Other comprehensive income for the six months ended June 30, 2024
Total comprehensive income for the six months ended June 30, 2024
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Reversal of special reserve
Cash dividends of ordinary share
Balance at June 30, 2024
Balance at January 1, 2025
Profit for the six months ended June 30, 2025
Other comprehensive income for the six months ended June 30, 2025
Total comprehensive income for the six months ended June 30, 2025
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Cash dividends of ordinary share
Balance at June 30, 2025
Equity attributable to owners of parent
| Ordinary shares | Capital surplus | Retained earnings | | | Other equity interest
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income | Total equity |
| --- | --- | --- | --- | --- | --- | --- |
| | | Legal reserve | Special reserve | Unappropriated retained earnings | | |
| $ 1,195,087 | 2,233,590 | 462,435 | 54,727 | 1,128,657 | 25,457 | 5,099,953 |
| - | - | - | - | 106,702 | - | 106,702 |
| - | - | - | - | - | (7,053) | (7,053) |
| - | - | - | - | 106,702 | (7,053) | 99,649 |
| - | - | 41,589 | - | (41,589) | - | - |
| - | - | - | (54,727) | 54,727 | - | - |
| - | - | - | - | (149,387) | - | (149,387) |
| $ 1,195,087 | 2,233,590 | 504,024 | - | 1,099,110 | 18,404 | 5,050,215 |
| $ 1,195,087 | 2,234,986 | 504,024 | - | 1,532,765 | 10,070 | 5,476,932 |
| - | - | - | - | 54,520 | - | 54,520 |
| - | - | - | - | - | 30,330 | 30,330 |
| - | - | - | - | 54,520 | 30,330 | 84,850 |
| - | - | 54,036 | - | (54,036) | - | - |
| - | - | - | - | (179,262) | - | (179,262) |
| $ 1,195,087 | 2,234,986 | 558,060 | - | 1,353,987 | 40,400 | 5,382,520 |
See accompanying notes to consolidated financial statements.
7
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
SCI PHARMTECH, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the six months ended June 30, 2025 and 2024
(expressed in Thousands of New Taiwan Dollars)
| For the six months ended June 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Cash flows from (used in) operating activities: | ||
| Profit before tax | $ 42,104 | 118,264 |
| Adjustments for: | ||
| Adjustments to reconcile profit (loss): | ||
| Depreciation expense | 120,925 | 106,815 |
| Amortization expense | 4,160 | 4,206 |
| Net (profit) loss on financial assets or liabilities at fair value through profit or loss | (1,320) | (2,026) |
| Interest expense | 2,001 | 2,846 |
| Interest income | (3,922) | (4,032) |
| Share of loss of associates and joint ventures accounted for using equity method | 22,666 | 7,823 |
| Others | - | 3,043 |
| Total adjustments to reconcile profit | 144,510 | 118,675 |
| Changes in operating assets and liabilities: | ||
| Decrease (increase) in notes and accounts receivable | 76,588 | (61,443) |
| Decrease (increase) in inventories | 9,481 | (105,738) |
| Increase in other receivables and other current assets | (13,755) | (18,731) |
| Decrease in contract liabilities | (59,848) | (892) |
| Increase in notes and accounts payable | 13,654 | 7,654 |
| Decrease in other payable | (21,360) | (1,153) |
| (Decrease) increase in provisions | (3,000) | 1,425 |
| Increase (decrease) in other current liabilities | 479 | (3,985) |
| Decrease in provision for employee benefits, non-current | (339) | (374) |
| Total changes in operating assets and liabilities | 1,900 | (183,237) |
| Total adjustments | 146,410 | (64,562) |
| Cash flow from (used in) operations | 188,514 | 53,702 |
| Interest received | 3,922 | 4,032 |
| Interest paid | (2,001) | (2,846) |
| Income taxes paid | (359) | (42,473) |
| Net cash flows from (used in) operating activities | 190,076 | 12,415 |
| Cash flows from (used in) investing activities: | ||
| Acquisition of financial assets at fair value through profit or loss | (13,001) | - |
| Proceeds from disposal of financial assets at fair value through profit or loss | 17,000 | 26,390 |
| Acquisition of property, plant and equipment | (336,912) | (155,350) |
| Increase in refundable deposits | (1,050) | (800) |
| Acquisition of intangible assets | (120) | - |
| Increase in prepayments of property, plant and equipment | (43,103) | (62,676) |
| Net cash flows from (used in) investing activities | (377,186) | (192,436) |
| Cash flows from (used in) financing activities: | ||
| Decrease in short-term borrowings | - | (46,000) |
| Proceeds from long-term borrowings | - | 131,787 |
| Repayments of long-term borrowings | (142,825) | - |
| Payment of lease liabilities | (1,538) | (1,002) |
| Net cash flows from (used in) financing activities | (144,363) | 84,785 |
| Net decrease in cash and cash equivalents | (331,473) | (95,236) |
| Cash and cash equivalents at beginning of period | 582,382 | 942,057 |
| Cash and cash equivalents at end of period | $ 250,909 | 846,821 |
See accompanying notes to consolidated financial statements.
8
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
June 30, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)
(1) Company history
SCI Pharmtech, Inc. (the “Company”) was incorporated in September 18, 1987 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The major business activities of the Company are the research and development, manufacture and sale of Active Pharmaceutical Ingredients (“API”), Intermediates, specialty chemicals. The consolidated financial statements of the Company comprise the Company and its subsidiaries (together referred to as the “Group” and individually as the “Group entities”). Please refer to note 4(b) for related information of the Group primarily business activities. Mercuries & Associates, Holding Ltd. is the parent company of the Company.
(2) Approval date and procedures of the consolidated financial statements
These consolidated financial statements were authorized for issuance by the Board of Directors on August 7, 2025.
(3) New standards, amendments and interpretations adopted:
(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.
The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2025:
- Amendments to IAS21 “Lack of Exchangeability”
(b) The impact of IFRS Accounting Standards endorsed by the FSC but not yet effective
The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2026, would not have a significant impact on its consolidated financial statements:
- IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “Insurance Contracts”
- Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”
- Annual Improvements to IFRS Accounting Standards—Volume 11
- Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”
(Continued)
9
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(c) The impact of IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC
The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:
| Standards or Interpretations | Content of amendment | Effective date per IASB |
|---|---|---|
| IFRS 18 “Presentation and Disclosure in Financial Statements” | The new standard introduces three categories of income and expenses, two income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities. |
• A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities.
• Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.
• Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes. | January 1, 2027 |
(Continued)
10
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
The Group is evaluating the impact on its consolidated financial position and consolidated financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Group completes its evaluation.
The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:
- Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
- IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
(4) Summary of material accounting policies:
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.
Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2024. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2024.
(b) Basis of Consolidation
| Name of investor | Name of subsidiary | Principal activity | Shareholding | ||
|---|---|---|---|---|---|
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |||
| The Company | Yushan Pharmaceuticals Inc. (Yushan) | The research and development, manufacture and sale of API | 100.00 % | 100.00 % | 100.00 % |
(c) Employee benefits
The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.
(Continued)
11
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(d) Income taxes
The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.
Income tax expenses for the period are measured by multiplying together the pre-tax income for the interim reporting period and the management’s best estimate of effective annual tax rate. This should be recognized fully as tax expense for the current period.
Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:
The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2024. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2024.
(6) Explanation of significant accounts:
Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2024. Please refer to note 6 of the 2024 annual consolidated financial statements.
(a) Cash and cash equivalents
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Cash on hand | $ 634 | 668 | 624 |
| Checking accounts and demand deposits | 229,539 | 133,638 | 819,075 |
| Time deposits | 20,736 | 285,828 | 27,122 |
| Bill sold under repurchase agreement | - | 162,248 | - |
| Cash and cash equivalents in the consolidated statement of cash flows | $ 250,909 | 582,382 | 846,821 |
(i) The Group did not provide cash and cash equivalents as collateral for its loans.
(ii) Please refer to note 6(u) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Group.
(Continued)
12
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(b) Financial assets at fair value through profit or loss
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Mandatorily measured at fair value through profit or loss: | |||
| Non-derivative financial assets | |||
| Beneficiary certificate | $ 77,934 | 81,264 | 1,058 |
| Stocks listed on domestic markets | 29,761 | 29,110 | 63,576 |
| Total | $ 107,695 | 110,374 | 64,634 |
The Group did not provide any aforementioned financial assets as collateral for its loans as of June 30, 2025, December 31 and June 30, 2024, respectively.
(c) Financial assets at fair value through other comprehensive income, non-current:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Financial assets at fair value through other comprehensive income: | |||
| Stocks listed on domestic markets | $ 121,413 | 81,427 | 89,761 |
(i) The Group designated the investments shown above as equity securities as at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term for strategic purposes.
(ii) Except as described below, there were no significant changes in the Group’s financial assets during the periods from January 1 to June 30, 2024 and 2025. For related information, please refer to note 6(c) of the 2024 consolidated financial statements.
(iii) Energenesis Biomedical Co., Ltd. increased its capital by cash in November 2024 upon the resolution of the board of directors. The base date for the capital increase was January 7, 2025. As of December 31, 2024, the Company's prepaid investment amounted to $9,656, recognized as other non-current assets, and in January 2025, it acquired 201 thousand shares of the company's common stock.
(iv) Please refer to note 6(u) for market risk of the Group.
(v) As of June 30, 2025, December 31 and June 30, 2024, the Group did not provide any aforementioned financial assets as collateral for its loans.
(Continued)
13
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(d) Notes and accounts receivable
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Accounts receivable | $ 212,926 | 289,514 | 368,812 |
| Less: Loss allowance | - | - | - |
| $ 212,926 | 289,514 | 368,812 |
The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables, as well as incorporated forward looking information, including the reasonable prediction of historical credit loss experience and future economic situation (macroeconomic and relevant industry information). The loss allowance provision was determined as follows:
| June 30, 2025 | |||
|---|---|---|---|
| Gross carrying amount | Rate of loss allowance provision | Loss allowance provision | |
| Current | $ 131,607 | - | - |
| 1 to 30 days past due | 66,144 | - | - |
| 31 to 60 days past due | 14,049 | - | - |
| 61 to 90 days past due | 1,126 | - | - |
| $ 212,926 | - | ||
| December 31, 2024 | |||
| Gross carrying amount | Rate of loss allowance provision | Loss allowance provision | |
| Current | $ 181,874 | - | - |
| 1 to 30 days past due | 71,515 | - | - |
| 31 to 60 days past due | 36,081 | - | - |
| 61 to 90 days past due | 44 | - | - |
| $ 289,514 | - | ||
| June 30, 2024 | |||
| Gross carrying amount | Rate of loss allowance provision | Loss allowance provision | |
| Current | $ 299,204 | - | - |
| 1 to 30 days past due | 46,873 | - | - |
| 31 to 60 days past due | 20,008 | - | - |
| 61 to 90 days past due | 2,727 | - | - |
| $ 368,812 | - |
(Continued)
14
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
The movement in the allowance for notes and trade receivable was as follows:
| For the six months ended June 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Balance at January 1 (Same as balance at June 30) | $ - | - |
As of June 30, 2025, December 31 and June 30, 2024, the Group did not provide any aforementioned notes and accounts receivable as collaterals for its loans.
(e) Inventories
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Raw materials | $ 92,547 | 111,027 | 112,909 |
| Work in progress | 99,603 | 176,339 | 98,114 |
| Finished goods | 419,266 | 333,531 | 424,248 |
| $ 611,416 | 620,897 | 635,271 |
Inventory cost recognized as operating costs for the three months ended June 30, 2025 and 2024 were as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Inventory that has been sold | $ 222,041 | 241,470 | 448,942 | 431,509 |
| Write-down of inventories | ||||
| (Reversal of write downs) | (140) | 5,412 | 13,410 | (17,094) |
| Loss on disposal of inventories | 1,495 | - | 1,495 | 18,847 |
| Unallocated production overheads | 44,222 | 37,890 | 84,903 | 69,516 |
| $ 267,618 | 284,772 | 548,750 | 502,778 |
The Group recognizes write-down losses of inventories as they are reduced to net realizable value and recognizes reversal gains of write-downs as the net realizable value of inventories increases due to the sale or written off of obsolete inventories.
As of June 30, 2025, December 31 and June 30, 2024, the Group did not provide any inventories as collaterals for its loans.
(Continued)
15
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(f) Investments accounted for using equity method
The components of investments accounted for using equity method at the reporting date were as follows:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Associates | $ 133,431 | 156,097 | 136,985 |
(i) There was no significant change for investments accounted for using the equity method for the six months ended June 30, 2025 and 2024. For the related information, please refer to note 6(f) of the consolidated financial statements for the year ended December 31, 2024.
(ii) The Group’s financial information on investments accounted for using equity method that are individually insignificant was as follows:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Carrying amount of individually insignificant associates' equity | $ 133,431 | 156,097 | 136,985 |
| For the three months ended June 30, | For the six months ended June 30, | ||
| --- | --- | --- | --- |
| 2025 | 2024 | 2025 | |
| Attributable to the Group: | |||
| Profit (loss) | $ (12,961) | (3,705) | (22,666) |
| Other comprehensive income (loss) | - | - | - |
| Total comprehensive income (loss) | $ (12,961) | (3,705) | (22,666) |
(iii) Pledge to secure
The Group did not provide any investment accounted for using equity method as collaterals for its loans.
(iv) The investments were accounted for using the equity method, and the share of profit or loss and other comprehensive income of those investments were calculated based on the financial statements that have not been reviewed.
(Continued)
16
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(g) Property, plant and equipment
The cost, depreciation, and impairment of the property, plant and equipment of the Group, were as follows:
| Land | Buildings and construction | Machinery and equipment | Office equipment | Other | Prepayment for equipment and construction in progress | Total | |
|---|---|---|---|---|---|---|---|
| Cost: | |||||||
| Balance on January 1, 2025 | $ 687,883 | 722,904 | 2,394,522 | 59,248 | 12,968 | 1,964,998 | 5,842,523 |
| Additions | - | - | 8,360 | - | - | 242,789 | 251,149 |
| Transferred in (out) | - | - | 7,479 | - | - | 71,691 | 79,170 |
| Balance on June 30, 2025 | $ 687,883 | 722,904 | 2,410,361 | 59,248 | 12,968 | 2,279,478 | 6,172,842 |
| Balance on January 1, 2024 | $ 687,883 | 707,002 | 1,714,324 | 58,337 | 12,968 | 1,564,525 | 4,745,039 |
| Additions | - | - | 24,469 | 116 | - | 116,172 | 140,757 |
| Disposal and derecognitions | - | - | (8,375) | - | - | - | (8,375) |
| Transferred in (out) | - | 15,902 | 585,679 | 271 | - | (604,895) | (3,043) |
| Balance on June 30, 2024 | $ 687,883 | 722,904 | 2,316,097 | 58,724 | 12,968 | 1,075,802 | 4,874,378 |
| Depreciation and impairments loss: | |||||||
| Balance on January 1, 2025 | $ - | 337,984 | 667,881 | 33,196 | 9,009 | - | 1,048,070 |
| Depreciation | - | 13,180 | 103,344 | 1,850 | 515 | - | 118,889 |
| Balance on June 30, 2025 | $ - | 351,164 | 771,225 | 35,046 | 9,524 | - | 1,166,959 |
| Balance on January 1, 2024 | $ - | 311,735 | 489,788 | 28,553 | 7,970 | - | 838,046 |
| Depreciation | - | 13,065 | 89,901 | 2,316 | 520 | - | 105,802 |
| Disposals and derecognitions | - | - | (8,375) | - | - | - | (8,375) |
| Balance on June 30, 2024 | $ - | 324,800 | 571,314 | 30,869 | 8,490 | - | 935,473 |
| Carrying amounts: | |||||||
| Balance on January 1, 2025 | $ 687,883 | 384,920 | 1,726,641 | 26,052 | 3,959 | 1,964,998 | 4,794,453 |
| Balance on June 30, 2025 | $ 687,883 | 371,740 | 1,639,136 | 24,202 | 3,444 | 2,279,478 | 5,005,883 |
| Balance on January 1, 2024 | $ 687,883 | 395,267 | 1,224,536 | 29,784 | 4,998 | 1,564,525 | 3,906,993 |
| Balance on June 30, 2024 | $ 687,883 | 398,104 | 1,744,783 | 27,855 | 4,478 | 1,075,802 | 3,938,905 |
Except for the following, the information on significant transactions of the Group's property, plant and equipment, please refer to note 6(g) of the consolidated financial statements for the year ended December 31, 2024.
(i) As of June 30, 2025, December 31 and June 30, 2024, the Group's prepayments for equipment purchases amounted to $43,103, $79,170 and $218,435, respectively, which were recorded as other non-current assets.
(ii) As of June 30, 2025, December 31 and June 30, 2024, part of the property, plant and equipment of the Group had been pledged as collateral. Please refer to note 8 for the details.
(Continued)
17
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(h) Right-of-use assets
The Group leases many assets including land, employee dormitory, company cars and other equipments. Information about leases for which the Group as a lessee is presented below:
| Land | Buildings and construction | Other equipment | Others | Total | |
|---|---|---|---|---|---|
| Cost: | |||||
| Balance on January 1, 2025 | $ 3,566 | - | - | 8,085 | 11,651 |
| Additions | - | 13,251 | 28,686 | - | 41,937 |
| Reductions | - | - | - | (1,493) | (1,493) |
| Balance on June 30, 2025 | $ 3,566 | 13,251 | 28,686 | 6,592 | 52,095 |
| Balance on January 1, 2024 (same as balance on June 30, 2024) | $ 3,566 | - | - | 2,626 | 6,192 |
| Accumulated depreciation: | |||||
| Balance on January 1, 2025 | $ 1,188 | - | - | 1,683 | 2,871 |
| Depreciation for the period | 357 | 110 | 548 | 1,021 | 2,036 |
| Reductions | - | - | - | (1,493) | (1,493) |
| Balance on June 30, 2025 | $ 1,545 | 110 | 548 | 1,211 | 3,414 |
| Balance on January 1, 2024 | $ 475 | - | - | 945 | 1,420 |
| Depreciation for the period | 357 | - | - | 656 | 1,013 |
| Balance on June 30, 2024 | $ 832 | - | - | 1,601 | 2,433 |
| Carrying amount: | |||||
| Balance on January 1, 2025 | $ 2,378 | - | - | 6,402 | 8,780 |
| Balance on June 30, 2025 | $ 2,021 | 13,141 | 28,138 | 5,381 | 48,681 |
| Balance on January 1, 2024 | $ 3,091 | - | - | 1,681 | 4,772 |
| Balance on June 30, 2024 | $ 2,734 | - | - | 1,025 | 3,759 |
The Group entered into a lease agreement with a non-related party in the second quarter of 2025 for the use-of-rights of its employee dormitories at the amount of $13,251, with the lease period from June 2025 to May 2035.
The Group entered into an agreement with a non-related party in the second quarter of 2025 to acquire the use-of-rights of its production equipment for $28,686, with the lease period from March 2025 to July 2042.
(i) Investments property
(i) Investment property, with a carrying amount of $228,012, with lease that has fixed rental income and contains an initial non-cancellable lease term of 50 years (extendable upon maturity) based on the agreement, comprises lands owned by the Group.
(ii) There were no significant additions, disposal, or recognition and reversal of impairment losses of investment property for the six months ended June 30, 2025 and 2024. Please refer to note 6(i) of the consolidated financial statements for the year ended December 31, 2024.
(iii) There were no significant changes in the fair value of the Group’s investment property as disclosed in note 6(i) of the consolidated financial statements for the year ended December 31, 2024.
(Continued)
18
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(iv) The Group rented out investment property for related parties. Please refer to note 7 for the details of rental income.
(v) The Group did not provide any investment properties as collaterals for its loan.
(j) Short-term borrowings
The details of short-term borrowings were as following:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Unsecured bank loans | $ 100 | 100 | 129,000 |
| Unused short-term credit lines | $ 937,560 | 807,843 | 605,185 |
| Range of interest rates | 2.225% | 2.225% | 1.85%~2.225% |
(i) For the collateral of the Group's assets for short-term borrowings, please refer to note 8.
(ii) For the information on the Group's exposure to the interest rate risk and liquidity risk, please refer to note 6(u).
(k) Long-term borrowings
The details of long-term borrowings were as following:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Secured bank loans | $ 711,033 | 818,358 | 818,359 |
| Unsecured bank loans | 128,250 | 163,750 | 180,000 |
| Less: current portion | (436,602) | (403,439) | (127,326) |
| Less: deferred income | - | (660) | (2,653) |
| $ 402,681 | 578,009 | 868,380 | |
| Unused credit lines | $ - | - | 10,000 |
| Range of interest rates | 1.675%~2.22% | 1.675%~2.05% | 1.675%~2.05% |
| Maturity period | 2025.7~2027.2 | 2025.3~2027.2 | 2025.3~2027.2 |
(i) For the six months ended June 30, 2025 and 2024, the Group had the additional long-term borrowings amounting to $0 and $131,787, respectively, and the repayment amounted to $142,825 and $0, respectively.
(ii) The Group’s application for a low-interest loan for the construction of plants, purchasing equipment, and support medium-term working capital, had been approved by the National Development Fund, Executive Yuan in 2022, with Mega International Commercial Bank providing the non-revolving loan of $1,000,000, which was recognized and measured by using the market rates, with the margin interests calculated by using the rates between the actual rates and the market rates, recognized as deferred income (other non-current liabilities), based on the Government grants.
(Continued)
19
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(iii) For the collateral for long-term borrowings, please refer to note 8.
(l) Other payables
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Salaries payable | $ 75,636 | 99,035 | 76,495 |
| Others | 96,353 | 94,314 | 91,890 |
| $ 171,989 | 193,349 | 168,385 |
(m) Lease liabilities
The carrying amount of lease liabilities was as follows:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Current | $ 4,580 | 2,465 | 1,737 |
| Non-current | $ 44,658 | 6,374 | 2,065 |
Please refer to note 6(u) for maturity analysis.
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| The amounts recognized in profit or loss were as follows: | ||||
| Interest on lease liabilities | $ 328 | 22 | 374 | 45 |
| Expenses relating to short-term leases | $ 404 | 55 | 790 | 135 |
| Expense relating to leases of low-value assets, excluding short-term leases of low-value assets | $ 232 | 236 | 434 | 430 |
| For the six months ended June 30, | ||||
| 2025 | 2024 | |||
| The amounts recognized in the statement of cash flows for the Group were as follows: | ||||
| Total cash outflow for leases | $ 3,136 | 1,612 |
(i) The Group leases company cars and parking lots, with lease terms that typically run for a period of 3 to 6 years. In addition, the Group leases employee dormitories and other equipment, with lease terms that run for a period of 10 to 17 years.
(Continued)
20
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(ii) Other leases
The Group leases office equipment, etc. These leases are short-term or leases of low-value items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.
(n) Provisions
The Group had no significant changes in provisions during the periods from January 1 to June 30, 2025 and 2024. For related information, please refer to note 6(n) of the 2024 consolidated financial statements.
(o) Employee benefits
(i) Defined benefit plans
Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2024 and 2023.
The expenses recognized in profit or loss for the Group were as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Operating cost | $ 316 | 290 | 629 | 577 |
| Operating expenses | 115 | 107 | 233 | 217 |
| Total | $ 431 | 397 | 862 | 794 |
(ii) Defined contribution plans
The Group’s expenses under the pension plan cost to the Bureau of Labor Insurance were as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Operating cost | $ 1,712 | 1,687 | 3,441 | 3,307 |
| Operating expenses | 517 | 546 | 1,043 | 1,078 |
| Total | $ 2,229 | 2,233 | 4,484 | 4,385 |
(Continued)
21
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(p) Income taxes
(i) The Group’s income tax expense in the interim financial statements is measured and disclosed accordance to paragraph B12 of IAS 34 “Interim Financial Reporting”.
(ii) The Group’s income tax expenses for the three months and six months ended June 30, 2025 and 2024 were calculated as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Current income tax expense | ||||
| Recognized during the period | $ 479 | 11,885 | 8,170 | 23,219 |
| Income tax underestimate (overestimate) for prior years | (20,586) | 30,532 | (20,586) | 30,532 |
| (20,107) | 42,417 | (12,416) | 53,751 | |
| Deferred income tax expense | ||||
| Recognition and reversal of temporary differences | - | (42,189) | - | (42,189) |
| Current income tax expense | $ (20,107) | 228 | (12,416) | 11,562 |
(iii) For the three months and six months ended June 30, 2025 and 2024, the Group did not recognize income tax expense in equity and other comprehensive income.
(iv) Examination and approval
The ROC tax authorities have examined the Company’s and Yushan’s income tax returns through 2022 and 2023, respectively.
(q) Capital and other equity
Except for the following disclosure, there was no significant change for capital and other equity for the periods from January 1 to June 30, 2025 and 2024. For the related information, please refer to note 6(q) of the consolidated financial statements for the year ended December 31, 2024.
(Continued)
22
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(i) Capital surplus
The balances of capital surplus as of June 30, 2025, December 31 and June 30, 2024 were as follows:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Additional paid-in capital | $ 2,127,990 | 2,127,990 | 2,127,990 |
| Cash capital increase reserved for employees' subscription | 18,720 | 18,720 | 18,720 |
| Gain on disposal of assets | 980 | 980 | 980 |
| Stock options | 71,530 | 71,530 | 71,530 |
| Changes in equity of associates and joint ventures accounted for using equity method | 10,184 | 10,184 | 8,788 |
| Employee stock options | 5,582 | 5,582 | 5,582 |
| $ 2,234,986 | 2,234,986 | 2,233,590 |
(ii) Retained Earnings
The Company's article of incorporation stipulates that Company's net earnings should first be used to offset the prior years' deficits, if any, after paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and special reserves are supposed to set aside in accordance with the relevant regulations or as required by the government. And then any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders' meeting for approval.
According to the Company's dividend policy, the type of dividends should be determined after considering the Company's capital and financial structure, operating conditions, operating surplus, industrial characteristics and cycle. The distribution of net earnings should not be lower than 50% of the current profit before tax. Cash dividends to stockholders should not be lower than 10% of the total dividends.
(iii) Earnings distribution
Based on the resolution of stockholders' meeting held on May 26, 2025 and May 30, 2024, the appropriation of earnings for the year 2024 and 2023 was approved. The above dividends per share were appropriated as follows:
| 2024 | 2023 | |||
|---|---|---|---|---|
| Amount per share (dollars) | Total amount | Amount per share (dollars) | Total amount | |
| Dividends distributed to ordinary shareholders: Cash | $ 1.50 | 179,262 | 1.25 | 149,387 |
(Continued)
23
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(iv) Other equity (net of tax)
| Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income | |
|---|---|
| Balance at January 1, 2025 | $ 10,070 |
| Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income | 30,330 |
| Balance at June 30, 2025 | $ 40,400 |
| Balance at January 1, 2024 | $ 25,457 |
| Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income | (7,053) |
| Balance at June 30, 2024 | $ 18,404 |
(r) Earnings per share
The Company’s earnings per share was calculated as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Basic earnings per share | ||||
| Profit attributable to ordinary shareholders of the Company | $ 22,784 | 62,193 | 54,520 | 106,702 |
| Weighted-average number of ordinary shares (thousand shares) | 119,509 | 119,509 | 119,509 | 119,509 |
| $ 0.19 | 0.52 | 0.46 | 0.89 | |
| Diluted earnings per share | ||||
| Profit attributable to ordinary shareholders of the Company | $ 22,784 | 62,193 | 54,520 | 106,702 |
| Weighted-average number of ordinary shares (thousand shares) | 119,509 | 119,509 | 119,509 | 119,509 |
| Effect of potentially dilutive ordinary shares: | ||||
| Effect of employee compensation | 62 | 133 | 220 | 241 |
| Weighted-average number of ordinary shares (thousand shares) (diluted) | 119,571 | 119,642 | 119,729 | 119,750 |
| $ 0.19 | 0.52 | 0.46 | 0.89 |
(Continued)
24
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(s) Revenue from contracts with customers
(i) Disaggregation of revenue
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Primary geographical markets: | ||||
| Italy | $ 92,320 | 76,183 | 166,842 | 136,357 |
| United States | 70,577 | 33,830 | 107,535 | 54,269 |
| Spain | 63,397 | 28,368 | 85,837 | 56,785 |
| Taiwan | 18,708 | 43,908 | 80,429 | 65,240 |
| Japan | 20,398 | 11,235 | 59,928 | 35,740 |
| Switzerland | 27,977 | 38,015 | 56,259 | 83,590 |
| Germany | 38,962 | 14,210 | 45,558 | 48,947 |
| Netherlands | - | 57,552 | 34,336 | 81,802 |
| Australia | 12,813 | 6,831 | 14,648 | 17,882 |
| Others | 26,361 | 82,584 | 80,433 | 121,983 |
| $ 371,513 | 392,716 | 731,805 | 702,595 | |
| Major products: | ||||
| Active pharmaceutical ingredients | $ 190,705 | 273,539 | 405,671 | 500,287 |
| Intermediates | 160,445 | 112,136 | 301,212 | 192,703 |
| Specialty Chemical | 20,363 | 7,041 | 24,922 | 9,605 |
| $ 371,513 | 392,716 | 731,805 | 702,595 |
(ii) Contract balances
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Notes and accounts receivable | $ 212,926 | 289,514 | 368,812 |
| Less: Loss allowance | - | - | - |
| Total | $ 212,926 | 289,514 | 368,812 |
| Contract liabilities (sales received in advance) | $ 35,075 | 94,923 | 37,475 |
Please refer to note 6(d) for the information of accounts receivable and the impairment.
The amount of revenue recognized for the six months ended June 30, 2025 and 2024, that was included in the contract liability balance at the beginning of the period was $61,250 and $2,823, respectively.
(Continued)
25
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
The changes of contract liabilities are arising from the difference of time point, which the Group transfers the ownership of goods and which customers do the payment.
(t) Remuneration to employees and directors
In accordance with the Articles of incorporation prior to the amendment on May 26, 2025, the Company should contribute no less than 3% of the profit as employee remuneration and less than 2% as directors’ remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The aforementioned employees’ compensation will be distributed in shares or cash. The recipients may include the employees of the subordinate of the Company who meet certain specific requirements.
In accordance with the Company’s Articles of Incorporation as amended on May 26, 2025, if the Company reports a profit for the fiscal year, it shall allocate compensation to employees and directors. Employee compensation shall be no less than 3% of the annual profit, with at least 50% of such amount distributed to those base-level employees. Director compensation shall not exceed 2% of the annual profit. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The aforementioned employees’ compensation will be distributed in shares or cash. The recipients may include the employees of the subordinate of the Company who meet certain specific requirements.
For the three months and six months ended June 30, 2025 and 2024, the remunerations to employees amounted to $15, $6,322, $3,989 (including the minimum amount of $1,995 to base-level employee), and $12,042, respectively, as well as the remunerations to directors amounted to $0, $720, $450 and $1,350, respectively. These amounts were calculated using the Company’s net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company’s proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. Shares distributed to employees as employees’ remuneration are calculated based on the closing price of the Company’s shares on the day before the approval by the Board of Directors.
For the years ended December 31, 2024 and 2023, the remunerations to employees amounted to $35,377 and $24,407, respectively, and the remunerations to directors amounted to $5,500 and $3,936, respectively. The remunerations above are identical to those of the actual distributions. The information is available on the Market Observation Post System website.
(u) Financial Instruments
Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note 6(w) of the consolidated financial statements for the year ended December 31, 2024.
(i) Credit risk
1) Credit risk exposure
The carrying amount of financial assets represent the maximum amount exposed to credit risk.
(Continued)
26
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
2) Concentration of credit risk
As of June 30, 2025, December 31 and June 30, 2024, there were eight, seven and eight major customers, respectively, that accounted for 81%, 75% and 72%, respectively, of notes and accounts receivable. Thus, credit risk is significantly centralized. In order to minimize credit risk, the Group periodically evaluates the major clients' financial positions and the possibility of collecting notes and accounts receivables to ensure the uncollectible amount is recognized appropriately as loss allowance.
3) Receivables and debt securities
a) For credit risk exposure of notes and trade receivables, please refer to note 6(d).
b) Other financial assets at amortized cost include other receivables and time deposits. The counterparties of the time deposits held by the Group are the financial institutions with investment grade credit ratings. Therefore, the credit risk is considered to be low.
(ii) Liquidity Risk
The following table shows the contractual maturities of financial liabilities, including estimated interest payments:
| Carrying Amount | Contractual cash flows | Within a year | 1 ~ 2 years | Over 2 years | |
|---|---|---|---|---|---|
| June 30, 2025 | |||||
| Non-derivative financial liabilities: | |||||
| Short-term borrowings | $ 100 | (100) | (100) | - | - |
| Notes and accounts payable | 72,091 | (72,091) | (72,091) | - | - |
| Lease liabilities (including current and non-current) | 49,238 | (58,419) | (5,793) | (5,970) | (46,656) |
| Other payables | 171,989 | (171,989) | (171,989) | - | - |
| Payables on equipment and construction | 68,902 | (68,902) | (68,902) | - | - |
| Dividends payable | 179,262 | (179,262) | (179,262) | - | - |
| Long-term borrowings (including current portion) | 839,283 | (855,214) | (447,220) | (287,398) | (120,596) |
| Guarantee deposits received | 1,228 | (1,228) | - | - | (1,228) |
| $ 1,382,093 | (1,407,205) | (945,357) | (293,368) | (168,480) |
(Continued)
27
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
| Carrying Amount | Contractual cash flows | Within a year | 1 ~ 2 years | Over 2 years | |
|---|---|---|---|---|---|
| December 31, 2024 | |||||
| Non-derivative financial liabilities: | |||||
| Short-term borrowings | $ 100 | (100) | (100) | - | - |
| Notes and accounts payable | 58,437 | (58,437) | (58,437) | - | - |
| Lease liabilities (including current and non-current) | 8,839 | (8,940) | (2,629) | (2,095) | (4,216) |
| Other payables | 193,349 | (193,349) | (193,349) | - | - |
| Payables on equipment and construction | 155,325 | (155,325) | (155,325) | - | - |
| Long-term borrowings (including current portion) | 981,448 | (1,006,400) | (418,262) | (366,958) | (221,180) |
| Guarantee deposits received | 1,228 | (1,228) | - | - | (1,228) |
| $ 1,398,726 | (1,423,779) | (828,102) | (369,053) | (226,624) | |
| June 30, 2024 | |||||
| Non-derivative financial liabilities: | |||||
| Short-term borrowings | $ 129,000 | (129,501) | (129,501) | - | - |
| Notes and accounts payable | 51,905 | (51,905) | (51,905) | - | - |
| Lease liabilities (including current and non-current) | 3,802 | (3,926) | (1,798) | (751) | (1,377) |
| Other payables | 168,385 | (168,385) | (168,385) | - | - |
| Payables on equipment and construction | 52,387 | (52,387) | (52,387) | - | - |
| Dividends payable | 149,387 | (149,387) | (149,387) | - | - |
| Long-term borrowings (including current portion) | 995,706 | (1,035,746) | (144,305) | (448,001) | (443,440) |
| Guarantee deposits received | 1,000 | (1,000) | - | - | (1,000) |
| $ 1,551,572 | (1,592,237) | (697,668) | (448,752) | (445,817) |
The Group is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amount.
(Continued)
28
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(iii) Currency risk
1) Exposure to foreign currency risk
The Group’s significant exposure to foreign currency risk was as follow:
Foreign currency: in thousands of dollars
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Foreign currency | Exchange rate | TWD | Foreign currency | Exchange rate | TWD | Foreign currency | Exchange rate | TWD | |
| Financial assets | |||||||||
| Monetary items | |||||||||
| USD to TWD | $ 9,029 | 29.25 | 264,098 | 12,677 | 32.735 | 414,982 | 9,333 | 32.4 | 302,389 |
| EUR to TWD | 2,136 | 34.15 | 72,944 | 1,054 | 33.94 | 35,773 | 3,175 | 34.51 | 109,569 |
| Financial liabilities | |||||||||
| Monetary items | |||||||||
| USD to TWD | 636 | 29.25 | 18,603 | 631 | 32.735 | 20,656 | 475 | 32.4 | 15,390 |
2) Sensitivity analysis
The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, loans and borrowings, accounts payable, accrued expenses and other payables that are denominated in foreign currency.
The analysis assumes that all other variables remain constant. A strengthening (weakening) 1% of the functional currency against each foreign currency for the six months ended June 30, 2025 and 2024, would have affected the net profit before tax increased or decreased $3,184 and $3,966, respectively. The analysis is performed on the same basis for both periods.
3) Foreign exchange gain and loss on monetary items
The exchange gains and losses of monetary items, including realized and unrealized, are changed into functional currency, which is the Group’s presentation currency. For the three months and six months ended June 30, 2025 and 2024, the exchange gains (losses), including realized and unrealized, are $(51,212), $4,699, $(42,677) and $18,739, respectively.
(iv) Interest rate analysis
For the details of financial assets and liabilities exposed to interest rate risk, please refer to financial risk management.
The details of financial assets and liabilities exposed to interest rate risk were as follows:
| Carrying amount | ||
|---|---|---|
| June 30, 2025 | June 30, 2024 | |
| Variable rate instruments: | ||
| Financial assets | $ 220,890 | 814,513 |
| Financial liabilities | 839,383 | 1,127,359 |
(Continued)
29
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
The following sensitivity analysis is based on the exposure to the interest rate risk of non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Group management’s assessment of the reasonably possible interest rate change.
If the interest rate had increased or decreased by 0.25%, the Group's net profit before tax would have decreased or increased by $773 and $391, respectively, for the six months ended June 30, 2025 and 2024, with all other variable factors remaining constant. This is mainly due to the Group’s bank savings and borrowings with variable interest rates.
(v) Other market price risks
For the six months ended June 30, 2025 and 2024, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for both analysis, and assuming that the other variables were unchanged, the effects on the comprehensive income were as follows:
| For the six months ended June 30, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Price of securities at the reporting date | Other comprehensive income after tax | Profit or loss before tax | Other comprehensive income after tax | Profit or loss before tax |
| Increasing 5% | $ 6,071 | 5,385 | 4,488 | 3,232 |
| Decreasing 5% | $ (6,071) | (5,385) | (4,488) | (3,232) |
(vi) Fair value
1) Fair value hierarchy
The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured on a recurring basis. The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:
(Continued)
30
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
| June 30, 2025 | |||||
|---|---|---|---|---|---|
| Book value | Fair Value | ||||
| Level 1 | Level 2 | Level 3 | Total | ||
| Financial assets at fair value through profit or loss | |||||
| Non-derivative financial assets mandatorily measured at fair value through profit or loss | $ 107,695 | 107,695 | - | - | 107,695 |
| Financial assets at fair value through other comprehensive income | |||||
| Listed stocks | 121,413 | 121,413 | - | - | 121,413 |
| Financial assets measured at amortized cost | |||||
| Cash and cash equivalents | 250,909 | - | - | - | - |
| Notes and accounts receivable | 212,926 | - | - | - | - |
| Other receivables | 17 | - | - | - | - |
| Refunded deposits (recognized as other non-current assets) | 2,267 | - | - | - | - |
| Subtotal | 466,119 | ||||
| Total | $ 695,227 | ||||
| Financial liabilities measured at amortized cost | |||||
| Short-term borrowings | $ 100 | - | - | - | - |
| Notes and accounts payable | 72,091 | - | - | - | - |
| Lease liabilities (including current and non-current) | 49,238 | - | - | - | - |
| Other payables | 171,989 | - | - | - | - |
| Payables on equipment and construction | 68,902 | - | - | - | - |
| Dividends payable | 179,262 | - | - | - | - |
| Long-term borrowings (including current portion) | 839,283 | - | - | - | - |
| Deposits received (recognized as other non-current liabilities) | 1,228 | - | - | - | - |
| Total | $ 1,382,093 |
(Continued)
31
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
| December 31, 2024 | |||||
|---|---|---|---|---|---|
| Book value | Fair Value | ||||
| Level 1 | Level 2 | Level 3 | Total | ||
| Financial assets at fair value through profit or loss | |||||
| Non-derivative financial assets mandatorily measured at fair value through profit or loss | $ 110,374 | 110,374 | - | - | 110,374 |
| Financial assets at fair value through other comprehensive income | |||||
| Listed stocks | 81,427 | 81,427 | - | - | 81,427 |
| Financial assets measured at amortized cost | |||||
| Cash and cash equivalents | 582,382 | - | - | - | - |
| Notes and accounts receivable | 289,514 | - | - | - | - |
| Refunded deposits (recognized as other non-current assets) | 1,217 | - | - | - | - |
| Subtotal | 873,113 | ||||
| Total | $ 1,064,914 | ||||
| Financial liabilities measured at amortized cost | |||||
| Short-term borrowings | $ 100 | - | - | - | - |
| Notes and accounts payable | 58,437 | - | - | - | - |
| Lease liabilities (including current and non-current) | 8,839 | - | - | - | - |
| Other payables | 193,349 | - | - | - | - |
| Payables on equipment and construction | 155,325 | - | - | - | - |
| Long-term borrowings (including current portion) | 981,448 | - | - | - | - |
| Deposits received (recognized as other non-current liabilities) | 1,228 | - | - | - | - |
| Total | $ 1,398,726 |
(Continued)
32
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
| June 30, 2024 | |||||
|---|---|---|---|---|---|
| Book value | Fair Value | ||||
| Level 1 | Level 2 | Level 3 | Total | ||
| Financial assets at fair value through profit or loss | |||||
| Non-derivative financial assets mandatorily measured at fair value through profit or loss | $ 64,634 | 64,634 | - | - | 64,634 |
| Financial assets at fair value through other comprehensive income | |||||
| Listed stocks | 89,761 | 89,761 | - | - | 89,761 |
| Financial assets measured at amortized cost | |||||
| Cash and cash equivalents | 846,821 | - | - | - | - |
| Notes and accounts receivable | 368,812 | - | - | - | - |
| Other receivables | 7 | - | - | - | - |
| Refunded deposits (recognized as other non-current assets) | 1,720 | - | - | - | - |
| Subtotal | 1,217,360 | ||||
| Total | $ 1,371,755 | ||||
| Financial liabilities measured at amortized cost | |||||
| Short-term borrowings | $ 129,000 | - | - | - | - |
| Notes and accounts payable | 51,905 | - | - | - | - |
| Lease liabilities (including current and non-current) | 3,802 | - | - | - | - |
| Other payables | 168,385 | - | - | - | - |
| Payables on equipment and construction | 52,387 | - | - | - | - |
| Dividends payable | 149,387 | - | - | - | - |
| Long-term borrowings | 995,706 | - | - | - | - |
| Deposits received (recognized as other non-current liabilities) | 1,000 | - | - | - | - |
| Total | $ 1,551,572 |
2) Valuation techniques for financial instruments not measured at fair value
The Group’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:
a) Financial assets and liabilities measured at amortized cost
If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.
(Continued)
33
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
3) Valuation techniques for financial instruments measured at fair value
a) Non-derivative financial instruments
Financial instruments trade in active markets is based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-the-run bonds from Taipei Exchange can be used as a base to determine the fair value of the listed companies' equity instrument and debt instrument of the quoted price in an active market.
If a quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument is not in accord with the definition mentioned above, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of a non-active market.
Listed stocks are financial assets traded on the active market, and their fair value is determined by market quotations.
4) Transfers between Levels
For the six months ended June 30, 2025 and 2024, there were no transfers between fair value levels for the Group.
(v) Financial risk management
There were no significant changes in the Group’s financial risk management and policies as disclosed in note 6(x) of the consolidated financial statements for the year ended December 31, 2024.
(w) Capital management
Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2024. Also, management believes that there were no significant changes in the Group’s capital management information as disclosed for the year ended December 31, 2024. Please refer to note 6(y) of the consolidated financial statements for the year ended December 31, 2024.
(x) Investing and financing activities not affecting current cash flow
The Group’s investing and financing activities which did not affect the current cash flow for the six months ended June 30, 2025 and 2024, were as follows:
(i) For the acquisition of right-of-use assets by lease for the six months ended June 30, 2025 and 2024, please refer to note 6(h).
(Continued)
34
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(ii) Reconciliation of liabilities arising from financing activities for the six months ended June 30, 2025 and 2024, were as follows:
| January 1, 2025 | Cash flows | Non-cash changes | June 30, 2025 | ||
|---|---|---|---|---|---|
| Acquisition | Others | ||||
| Short-term borrowings | $ 100 | - | - | - | 100 |
| Long-term borrowings (including current portion) | 981,448 | (142,825) | - | 660 | 839,283 |
| Lease liabilities | 8,839 | (1,538) | 41,937 | - | 49,238 |
| Guarantee deposits received | 1,228 | - | - | - | 1,228 |
| $ 991,615 | (144,363) | 41,937 | 660 | 889,849 | |
| January 1, 2024 | Cash flows | Non-cash changes | June 30, 2024 | ||
| Acquisition | Others | ||||
| Short-term borrowings | $ 175,000 | (46,000) | - | - | 129,000 |
| Long-term borrowings (including current portion) | 862,670 | 131,787 | - | 1,249 | 995,706 |
| Lease liabilities | 4,804 | (1,002) | - | - | 3,802 |
| Guarantee deposits received | 1,000 | - | - | - | 1,000 |
| $ 1,043,474 | 84,785 | - | 1,249 | 1,129,508 |
(7) Related-party transactions:
(a) Names and relationship with related parties:
| Name of related party | Relationship with the Group |
|---|---|
| Weichyun Wong | The chairman of the Company |
| Framosa Co., Ltd. (Framosa) | The associate of the Company |
| HoneyBear Biosciences, Inc. (HoneyBear) | 〃 |
(b) Significant transaction with related parties:
(i) Sales
The amounts of sales by the Group to related parties were as follow:
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Associates | $ 2,000 | - | 2,000 | - |
(Continued)
35
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
The were no significant differences in the collection periods and sales prices between the related parties and other customers, and the payment term was 30 days. There were no significant differences in the payment term between the related parties and other customers. As of June 30, 2025, all the above transaction price have been received.
(ii) Lease
The Group rented out land and laboratory for related party, the details of the above lease transactions were as follows:
| | Rental income
(recorded as other income) | | | | Other receivables from
related parties | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | For the three months
ended June 30, | | For the six months ended
June 30, | | June 30,
2025 | December 31,
2024 | June 30,
2024 |
| | 2025 | 2024 | 2025 | 2024 | | | |
| Associates-
Framosa | $ 1,701 | 1,635 | 3,401 | 3,270 | - | - | - |
| Guarantee deposits received
(recorded as other non-current liability) | | |
| --- | --- | --- |
| June 30,
2025 | December
31, 2024 | June 30,
2024 |
| $ 1,228 | 1,228 | 1,000 |
(iii) Property transactions
The Group entered into an agreement with Framosa for the construction of its wastewater treatment equipment, the total contract price is $248,818 (before tax), resulting in the amounts of $199,199, $191,259 and $90,238, being recognized as construction in progress as of June 30, 2025, December 31 and June 30, 2024, respectively. As of June 30, 2025, December 31 and June 30, 2024, the unpaid balances were $2,814, $0, and $0, respectively, recorded as payable on equipment and construction.
(iv) Guarantee
Details of guarantees provided by the Group to related parties are as follows:
| | June 30,
2025 | December 31,
2024 | June 30,
2024 |
| --- | --- | --- | --- |
| Associates-Framosa | $ 400,000 | 400,000 | 400,000 |
For the three months and six months ended June 30, 2025 and 2024, the Company recognized the endorsement guarantee service fee income from Framosa amounting to $1,120, $0, $1,120 and $0, respectively.
Please refer to note 13(a)ii for the detail.
(Continued)
36
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(v) Others
The title deed of a certain portion of the land was registered in the name of Mr. Weichyun Wong due to certain legal requirements for the six months ended June 30, 2025 and 2024. Please refer to note 6(g).
(c) Key management personnel compensation
| For the three months ended June 30, | For the six months ended June 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Salary and short-term employee benefits | $ 4,237 | 5,803 | 8,978 | 11,188 |
(8) Pledged assets:
The carrying values of pledged assets were as follows:
| Assets | Subject | June 30, 2025 | December 31, 2024 | June 30, 2024 |
|---|---|---|---|---|
| Land | Pledged as collateral for credit lines | $ 42,736 | 42,736 | 42,736 |
| Building | “ | 1,943 | 2,056 | 2,169 |
| $ 44,679 | 44,792 | 44,905 |
(9) Commitments and contingencies:
(a) As of June 30, 2025, December 31 and June 30, 2024, the unused balance of the Group’s outstanding standby letters of credit amounted to $12,340, $19,154 and $115,815, respectively.
(b) The significant outstanding purchase commitments for property, plant and equipment were as follows:
| June 30, 2025 | December 31, 2024 | June 30, 2024 | |
|---|---|---|---|
| Acquisitions of property, plant and equipment | $ 205,961 | 425,423 | 888,505 |
(10) Losses Due to Major Disasters:
A major fire occurred on December 20, 2020 that caused damage to some of the Company's buildings, equipment, construction in progress, and inventories, wherein the Company received insurance claims progressively beginning in 2021 from its insurance contract related to its property insurance and public liability. As of December 31, 2024, all insurance claims related to the incident had been fully settled and received. For further details, please refer to notes 6(v) and 10 of the 2024 consolidated financial statements.
(11) Subsequent Events: None.
(Continued)
37
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(12) Other:
(a) The followings are the summary statement of current period employee benefits, depreciation and amortization expenses by function:
| By function | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | ||||
|---|---|---|---|---|---|---|
| Cost of sales | Operating expenses | Total | Cost of sales | Operating expenses | Total | |
| By item | ||||||
| Employee benefits | ||||||
| Salary | 45,074 | 11,974 | 57,048 | 47,721 | 19,026 | 66,747 |
| Labor and health insurance | 4,283 | 1,153 | 5,436 | 4,071 | 1,176 | 5,247 |
| Pension | 2,028 | 632 | 2,660 | 1,977 | 653 | 2,630 |
| Remuneration of directors | - | - | - | - | 720 | 720 |
| Others | 1,043 | 2,288 | 3,331 | 1,012 | 2,416 | 3,428 |
| Depreciation | 53,804 | 7,001 | 60,805 | 51,330 | 6,451 | 57,781 |
| Amortization | 1,030 | 1,051 | 2,081 | 1,038 | 1,065 | 2,103 |
| By function | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Operating costs | Operating expenses | Total | Operating costs | Operating expenses | Total | |
| By item | ||||||
| Employee benefits | ||||||
| Salary | 90,823 | 27,634 | 118,457 | 91,792 | 36,550 | 128,342 |
| Labor and health insurance | 9,156 | 2,567 | 11,723 | 8,582 | 2,668 | 11,250 |
| Pension | 4,070 | 1,276 | 5,346 | 3,884 | 1,295 | 5,179 |
| Remuneration of directors | - | 450 | 450 | - | 1,350 | 1,350 |
| Others | 2,109 | 4,470 | 6,579 | 2,139 | 4,713 | 6,852 |
| Depreciation | 107,595 | 13,330 | 120,925 | 93,914 | 12,901 | 106,815 |
| Amortization | 2,060 | 2,100 | 4,160 | 2,076 | 2,130 | 4,206 |
(b) Seasonality of operations
The Group’s operations were not affected by seasonality or cyclicality factors.
(13) Other disclosures:
(a) Information on significant transactions:
The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the six months ended June 30, 2025:
(i) Loans to other parties: None.
(Continued)
38
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(ii) Guarantees and endorsements for other parties:
| No. | Name of guarantor | Counter-party of guarantees and endorsement | Limitation on amount of guarantees and endorsements for a specific enterprise | Highest balance for guarantees and endorsements during the period | Balance of guarantees and endorsements as of reporting date | Actual usage amount during the period | Property pledged for guarantees and endorsements (Amount) | Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements | Maximum amount for guarantees and endorsements | Parent company endorsements/guarantees to third parties on behalf of subsidiary | Subsidiary endorsements/guarantees to third parties on behalf of parent company | Endorsements/guarantees to third parties on behalf of companies in Mainland China | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name | Relationship with the Company | ||||||||||||
| 0 | The Company | Yumusa Co., Ltd | The associate of the Company | 538,252 | 400,000 | 400,000 | 249,520 | 7.43 % | 2,153,008 | N | N | N |
Note 1: The total amount of endorsements and guarantees provided by the Company to third parties shall not exceed 40% of the latest net worth as reported in the financial statements. The maximum limit for endorsements and guarantees provided to a single enterprise shall not exceed 10% of the Company's net worth. In addition the total amount of endorsements and guarantees provided by the Company and subsidiaries to third parties shall not exceed 40% of the latest net worth as reported in the financial statements. The maximum limit for endorsements and guarantees provided to a single enterprise shall not exceed 10% of the Company's net worth.
(iii) Material securities held as of March 31, 2025 (excluding investment in subsidiaries, associates and joint ventures):
| Name of holder | Category and name of security | Relationship with company | Account title | Ending balance | Note | |||
|---|---|---|---|---|---|---|---|---|
| Shares/Units (thousands) | Carrying value | Percentage of ownership (%) | Fair value | |||||
| The Company | Beneficiary Certificate (UPAMC James Bond Money Market Fund) | - | Current Financial asset at fair value through profit or loss | 1,397 | 24,488 | - | 24,488 | |
| o | Beneficiary Certificate (Nomura Taiwan Money Market) | - | o | 2,363 | 40,382 | - | 40,382 | |
| o | Stock (Cathay Financial Holding Co., Ltd. Preferred Stock A) | - | o | 50 | 3,025 | - | 3,025 | |
| o | Stock (CTBC Financial Holding Co., Ltd. Preferred Shares B) | - | o | 333 | 21,179 | - | 21,180 | |
| o | Stock (Shin Kong Financial Holding Co., Ltd. Preferred Shares A) | - | o | 148 | 5,557 | - | 5,557 | |
| Yushan Pharmaceuticals Inc. | Beneficiary Certificate (UPAMC James Bond Money Market Fund) | - | o | 745 | 13,064 | - | 13,064 | |
| The Company | Stock (Energenesis Biomedical Co., Ltd.) | - | Financial assets at fair value through other comprehensive income | 1,804 | 121,413 | 2 % | 121,413 |
(iv) Related-party transactions for purchases and sales with amounts exceeding the lower of $100 million or 20% of the capital stock: None.
(v) Receivables from related parties with amounts exceeding the lower of $100 million or 20% of the capital stock: None.
(vi) Business relationships and significant intercompany transactions: None.
(Continued)
39
SCI PHARMTECH, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(b) Information on investees:
The following is the information on investees for the six months ended June 30, 2025 (excluding information on investees in Mainland China):
Unit: thousand dollars/ thousand shares
| Name of investor | Name of investee | Location | Main businesses and products | Original investment amount | Ending balance | Net income (losses) of investee | Share of profit/losses of investee | Note | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2025 | December 31, 2024 | Shares (thousands) | Percentage of ownership | Carrying value | |||||||
| The Company | Yushan Pharmaceuticals Inc. | R.O.C. | The research and development, manufacture and sale of API | 351,761 | 351,761 | 35,190 | 100 % | 362,973 | (3,613) | (3,331) | Note 1 |
| ✓ | Framosa Co., Ltd. | R.O.C. | Circular economy by purifying and utilizing used solvents | 143,750 | 143,750 | 14,375 | 25 % | 90,151 | (41,069) | (10,764) | |
| ✓ | HoneyBear Biosciences, Inc. | R.O.C | Biotechnology services | 35,000 | 35,000 | 1,750 | 4.04 % | 14,984 | (101,553) | (4,127) | |
| Yushan Pharmaceuticals Inc. | HoneyBear Biosciences, Inc. | R.O.C | Biotechnology services | 33,000 | 33,000 | 3,300 | 7.61 % | 28,296 | (101,553) | (7,775) |
Note 1 : The transactions had been eliminated in the consolidated financial statements.
(c) Information on investment in mainland China: None.
(14) Segment information:
The Group only uses one segment to assess its performance and allocate resources. Hence, there is no need to disclose the information.