OUR MISSION We endeavor to develop and supply first-class innovative drugs to meet our customers’ health needs. We seek to be a valuable business organization that is held in high esteem by the public. We are a science-driven biotechnology company based in Taiwan and are committed to developing and commercializing innovative and differentiated new drugs (plant-derived) mainly specializing in the treatment of urinary system diseases, with an initial focus on the markets of the U.S., the EU, and Asia. Since our inception in 2002, we have built integrated capabilities that encompass all key functionalities of drug development, including early-stage drug discovery and development, clinical trials, regulatory affairs, manufacturing, and commercialization. Leveraging our strong research and development capabilities and proprietary platform, we have been developing a series of botanical drug candidates, including our primary botanical drug candidate of MCS-2, another clinical-stage botanical drug candidate of PCP, and other preclinical-stage botanical drug candidates. MCS-2 is our new botanical drug candidate developed for treatment of benign prostate hyperplasia/lower urinary tract symptoms, or BPH/LUTS. The development of MCS-2 traces back to 1998, encompassing its composition and Chemistry, Manufacturing, and Controls (“CMC”). We decided to conduct the Phase II clinical study of MCS-2 in Taiwan in 2002, with the Phase II clinical study initiated in 2004. Additionally, we have conducted the two Phase III trials and two open-label extension studies for MCS-2 using API-1 in Taiwan and the US in 2010. For MCS-2 (API-1), we have conducted four Phase III clinical trials for MCS-2 in the U.S. and Taiwan, including two pivotal trials (one in the US and one in Taiwan) and two open-label extension studies (one in the US and one in Taiwan) using API-1. The U.S. FDA had concerns about one pivotal Phase III clinical trial for MCS-2 in the U.S., which failed to show a difference between treatment groups for the primary efficacy endpoint in the intent-to-treat population. The U.S. FDA also had concerns regarding the reproducibility of some of the reported efficacy results for Study MCS-2-TWN-a. U.S. FDA has had no further comments for the two open-label extension studies (one in the US and one in Taiwan) using API-1. According to these four clinical trials, we found MCS-2 (using API-1) was well-tolerated and the incidence of adverse events in the MCS-2 (using API-1) group were lower than that in the placebo group. The U.S. FDA also raised concerns about whether one new Phase III study with API-2 would be sufficient, particularly in the treatment of symptomatic conditions such as BPH, where the potential effects of bias, investigational site differences, or chance alone are issues. If we are able to satisfy the U.S. FDA that API-1 and API-2 are sufficiently comparable, we will initiate the MCS-2 Phase III study and the PK study using API-2 simultaneously to support a future NDA submission. The new Phase III study using API-2, combined with the previous Phase III study using API-1, will provide more convincing evidence of effectiveness than the results from a single trial. If on the other hand we are unable to satisfy U.S. FDA of comparability between API-1 and API-2, we will perform additional clinical trials for further drug development using API-1 per U.S. FDA requirements. In the interim, we continue to research additional API sources based on our own patent, to pursue additional outsourcing API vendors, and to follow U.S. FDA’s guidance for demonstrating comparability between API-1 and API-2 to the Agency’s satisfaction. PCP is our new botanical drug candidate developed for the prevention of prostate cancer. PCP focuses on research for preventing prostate cancer. As the PCP study drug is the same as that for MCS-2, albeit for a different indication, we concluded that conducting a Phase I trial for PCP was unnecessary. Based on the safety and tolerability profile observed in the MCS-2 Phase II clinical trial, we decided to initiate the development of PCP and proceed directly to the Phase II study for its indication in 2013, with the Phase II clinical study commencing in late 2014. Our PCP Phase II study enrollment and treatment phase using API-1 is now in the source data verification (SDV) stage before drafting the clinical study report (CSR), which may take an additional year or more to complete. After completion of the SDV stage, we will conduct the necessary statistical analysis. While PCP is still in the SDV stage, we are working with the U.S. FDA to establish the comparability of the API-1 and API-2. To date, we have not had any discussions with the TFDA regarding the unavailability of API-1. We will discuss the statistical results of the PCP using API-2 with Taiwan regulator and proceed with the Phase III PCP study if the U.S. FDA accepts such results and determines that API-1 and API-2 are comparable. Based on our prior communications with the TFDA, the Chemistry, Manufacturing, and Controls (“CMC”) and study design for the product are consistent between the U.S. and Taiwan, encompassing two pivotal studies and two open-label extension studies. The protocol for the Phase III clinical trials was approved by the U.S. FDA in December 2009 and subsequently approved by the TFDA in February 2010. Therefore, we believe the TFDA will give due consideration to the comments provided by the U.S. FDA. We have completed the CMC documentation on the active pharmaceutical ingredient-2 (API-2) and a plan to establish comparability between API-1 and API-2 and submitted it to the U.S. FDA on October 16, 2024, and are awaiting feedback from the U.S. FDA. As of this date, the Company is still in the process of providing the information required by the U.S. FDA and has not yet successfully demonstrated the comparability of API-1 and API-2. We are currently collaborating with a supplier to prepare the API-2 CMC documents required by the U.S. FDA. Should the FDA concur that API-1 and API-2 are similar and comparable, we will sign the Quality Agreement with this supplier for the raw materials for API-2. If the U.S. FDA does not agree that API-1 and API-2 are comparable, we will continue to research additional API sources based on our own patent, to pursue additional outsourcing API vendors, and to follow U.S. FDA’s guidance for demonstrating comparability between API-1 and API-2 to the U.S. FDA’s satisfaction. Our intention to identify another potential supplier and repeat the process of demonstrating comparability between API-1 and API-2 is to avoid having to repeat all of your clinical trials. In the event that we are unable to establish comparability between API-1 and API-2, we will be required to repeat the MCS-2 and PCP clinical trials using API-2, or to conduct other additional clinical trials as may be required by the U.S. FDA. We resubmitted a new drug application, or NDA, for MCS-2 with the U.S. FDA on December 17, 2021 using Active Pharmaceutical Ingredient (API)-1. We voluntarily withdrew our NDA on November 30, 2022, in order to develop more information about API-2 for the U.S. FDA’s review and to address ongoing questions regarding demonstrated difference between MCS-2 and placebo for the primary efficacy endpoint in a clinical study for MCS-2, and to address other questions FDA had previously identified in our NDA regarding FDA’s questions related to the drug substance and product, validation of methods used for measuring the effect of MCS-2, manufacturing, clinical and nonclinical testing, data, and statistical analyses, among others. We elected to voluntarily withdraw the application with the option of refiling to address the substantive issues raised by the U.S. FDA that would have likely prevented the agency from approving our NDA at that time. The substantive issues included currently unavailable API-1, and no statistically significant difference between the drug and placebo in the primary efficacy endpoint in Study MCS-2-US-a, one of our Phase III pivotal studies. The U.S. FDA also had concerns regarding the reproducibility of some of the reported efficacy results for Study MCS-2-TWN-a, one of our Phase III pivotal studies. We have conducted four Phase III clinical trials in the U.S. and Taiwan using API-1, with two pivotal and two open label extension studies. One study in the U.S. failed to show the treatment difference for the primary efficacy endpoint in the intent-to-treat (“ITT”) population. In addition, API-1 supplier withdrew their consent to reference their Drug Master File on file with the U.S. FDA, due to the relocation and restructuring of their manufacturing facility. Under these circumstances, we voluntarily withdrew our NDA. We are continuing to discuss with the U.S. FDA if it would be feasible for us to conduct an additional Phase III trial and Phase I PK study in the US using API-2 to support our NDA re-submission. We will also have a separate meeting with the U.S. FDA to discuss the Chemistry and Manufacturing, and Control (CMC) information for API-2, to determine whether API-1 and API-2 are comparable, as both APIs are the similar drug substance covered by the same patent owned by the Company. We elected to withdraw our NDA on November 30, 2022, given that our pivotal Phase III clinical trial for MCS-2 in the U.S. failed to show a difference between treatment groups for the primary efficacy endpoint in the intent-to-treat population. Had we not elected to withdraw under the circumstances, the U.S. FDA may request us to conduct further Phases III clinical trial until the U.S. FDA decides that we have reached the endpoint of Phase III clinical trials for MCS-2. If we decide to submit the application with the existing data, our NDA would need to provide a rationale for the study failure and a justification for the FDA to approve our application in this circumstance. We submitted a meeting request to the U.S. FDA on April 14, 2023, with our very preliminary comparative specifications of API-1 and API-2. On June 26, 2023, U.S. FDA responded to our meeting request regarding refiling the NDA for MCS-2 using API-2, and the U.S. FDA informed us that the information we provided on API-2 was not yet sufficient to demonstrate comparability with API-1 since we only provided the preliminary comparative drug substance and drug product specifications between API-1 and API-2, and U.S. FDA also mentioned to include the statistically significant difference between MCS-2 and placebo in the primary efficacy endpoint in in Study MCS-2-US-a, one of our Phase III pivotal studies. The U.S. FDA’s conclusions at that time were that without new clinical information with respect to the comparability of API-1 and API-2 from the previous Phase III using API-1 and the new Phase III using API-2, any NDA resubmission for MCS-2 would be at risk of the U.S. FDA refusing to accept the application, referred to as “Refusal To File” (RTF). Given that API-1 and API-2 are similar drug substances under the same patent owned by us, we seek to demonstrate comparability in our comparative testing data of CMC information. As the U.S. FDA appears to require additional clinical information, we are planning a new Phase III study in the U.S. using API-2. As a result of the above developments with FDA, we submitted a Type D Written Response Only (WRO) meeting request to the U.S. FDA on December 12, 2023. We asked that the U.S. FDA provide a written response to questions focused on obtaining U.S. FDA’s review and comments on a new, proposed Phase III clinical trial protocol for MCS-2 with API-2 and a pharmacokinetic (PK) study. We proposed to address CMC data for our proposed drug product in a separate, future meeting. The U.S. FDA granted our WRO meeting request but clarified that they viewed the meeting as a Type C meeting because, in the U.S. FDA’s view, it encompasses an entirely new drug development program, including Phase I PK study and Phase III clinical trial for a new product with a new active pharmaceutical ingredient. The purpose for assessing the comparability of API-2 to API-1 on individual studies is to continue to rely on data from trials using MCS-2 (API-1) and try to demonstrate to U.S. FDA that API-2 is comparable to API-1, such that all of the prior trials can be used to support a new NDA. This will be discussed with the U.S.FDA at the CMC meeting, to obtain FDA feedback and seek the U.S. FDA’s acceptance that API-1 and API-2 are comparable and similar drug substances. As the U.S. FDA requires additional clinical information due to a failed MCS-2-US-a study, we will conduct an additional Phase III pivotal study in the U.S. (MCS-2-US-b) using API-2. However, we must conduct API-1 and API-2 comparability studies first and if the FDA accepts such results and determines that API-1 and API-2 are comparable, only then we will be able to conduct the additional Phase III pivotal study using API-2. On February 23, 2024, we received a written response from the U.S. FDA. In the response, the U.S. FDA raised the following concerns: (i) The U.S. FDA questioned whether one new Phase III study with API-2 would be sufficient, especially in treatment of symptomatic conditions such as BPH, the potential effects of bias, investigational site, or chance alone are concerns. The US. FDA believes results from two positive Phase III efficacy studies provide more convincing evidence of effectiveness than results from a single trial. Additionally, a single Phase III efficacy study could make it challenging to collect the amount of safety information required for a new molecular entity. (ii) The U.S. FDA noted its concern that Study MCS-2-US-a did not demonstrate a statistically significant difference between the drug and placebo in the primary efficacy endpoint. They also expressed concerns regarding the treatment effect of questionable significance in Study MCS-2-TWN-a. (iii) The U.S. FDA was concerned that our study plan had not specified either the quantity or quality of the confirmatory evidence, and did not state a specific clinical circumstance, ethical or practical consideration, or unmet medical need that would preclude the conduct of a second adequate and well-controlled efficacy study. (iv) Additionally, regarding the comparability of API-1 and API-2, the U.S. FDA commented that it will need more information on how we would demonstrate comparability between API-1 and API-2. They noted that their determination of whether our original Phase III studies with API-1 would be useful depends on the quality of support for a convincing link between products containing these APIs. The U.S. FDA provided comments on our proposed Phase III study, and we are finalizing the protocol for resubmission to the U.S. FDA. In addition, we are in the process of finalizing the PK study protocol per U.S. FDA requirements and hope to satisfy the U.S. FDA of the comparability between API-1 and API-2. We followed the U.S. FDA’s advice to amend the Phase III protocol and develop the Phase I PK protocol. On May 14, 2024, we submitted a Type B meeting request to the FDA containing the amended protocols for their review and comments. On May 23, 2024, we received a denial notice from the FDA, stating that it is premature for this stage of drug development, and until the company can provide complete Chemistry, Manufacturing, and Controls (CMC) information on the active pharmaceutical ingredient-2 (API-2) and a plan to establish comparability between API-1 and API-2, the U.S. FDA is unable to reach agreement on protocols designed to establish the safety and efficacy of MCS-2. We have completed the CMC documentation on the active pharmaceutical ingredient-2 (API-2) and a plan to establish comparability between API-1 and API-2 and submitted it to the U.S. FDA on October 16, 2024, and are awaiting feedback from the U.S. FDA. If our new Phase I PK and Phase III studies using API-2 are successful and after addressing other U.S. FDA-identified deficiencies summarized above, we plan to resubmit our NDA for MCS-2 under the same NDA number to the U.S. FDA. The resubmission timeline is unclear at this point, depending on the comments from the U.S. FDA. Another of our clinical-stage key botanical drug candidates, PCP, is under phase II trials stage in Taiwan. Another drug candidate, IC, is under preclinical studies. In the event that we are unable to establish comparability between API-1 and API-2, or we are unable to identify an active pharmaceutical ingredient that the FDA agrees is comparable to API-1, we will be required to repeat the MCS-2 and PCP clinical trials using API-2, or to conduct other additional clinical trials as may be required by the U.S. FDA. --- Our pipeline features three innovative and differentiated new botanical drug candidates, and we are developing them for (i) the treatment of benign prostate hyperplasia/lower urinary tract symptoms, or BPH/LUTS, (ii) prostate cancer prevention, and (iii) the treatment of interstitial cystitis, respectively. • MCS-2: MCS-2 is our new botanical drug candidate developed for treatment of BPH/LUTS. MCS-2 is expected to be our core product in the future. MCS-2 is a softgel capsule containing patented active pharmaceutical ingredients derived from botanical raw materials, specifically, Lycopersicon escultenum L. MCS-2 contains, in the largest concentrations, five carotenoids including lycopene, phytoene, phytofluene, tocopherol and beta-carotene. We developed MCS-2 using chylomicron technology to improve its bioavailability. Chylomicron is a type of lipoprotein particles consisting of triglycerides and phospholipids. We have conducted four Phase III clinical trials for MCS-2 in the U.S. and Taiwan, including two pivotal trials (one in the US and one in Taiwan) and two open-label extension studies using API-1. Our pivotal Phase III clinical trial for MCS-2 in the U.S. failed to show a difference between treatment groups for the primary efficacy endpoint in the intent-to-treat population. We resubmitted an NDA for MCS-2 using API-1 to the U.S. FDA on December 17, 2021. On February 22, 2022, the U.S. FDA accepted our NDA for review “with issues identified.” In the February 22, 2022 Filing Issues Identified letter, the U.S. FDA identified, among other things, the lack of demonstrated difference between MCS-2 and placebo for the primary efficacy endpoint in the MCS-2-US-a study. U.S. FDA identified additional issues, including issues regarding pharmacology, toxicology, and our pharmacokinetic submission, statistical analyses, and the content and format of our proposed Prescribing Information. We used one supplier for API-1which was the basis for the NDA that has since been withdrawn by the Company. The supplier of API-1 sold a parcel of its land and is in the process of relocating and reconstructing its manufacturing facility, and as a result, API-1 is currently not available to us, and for that reason the supplier of API-1 withdrew its consent for us to reference their Drug Master File (DMF) on file with the U.S. FDA. If we are able to satisfy U.S. FDA that API-1 and API-2 are comparable, that is, if the U.S. FDA agrees with our comparability data between API-1 and API-2, then we may not need to conduct redundant studies using API-2. If we are unable to demonstrate comparability, we would have to perform more clinical trials. We will work with API vendors to follow the U.S. FDA’s guidance to demonstrate comparability. In the event that we are unable to establish comparability between API-1 and API-2, we will be required to repeat the MCS-2 clinical trials using API-2. Moreover, we are planning the CMC meeting with U.S. FDA, one purpose of which is to seek the U.S FDA’s concurrence that API-2 is comparable to API-1. Those plans are no more speculative than the fact that we are engaged in an ongoing drug approval process with the U.S. FDA. It is not uncommon to maintain redundant API sources for the same finished drug to minimize the risk of shortages. In a Mid-Cycle meeting and communication with the U.S. FDA on May 24, 2022, the U.S. FDA also identified the fact that API-1, the botanical drug substance used in our clinical trials and that was the basis for our NDA, was not available. Based upon these observations, we voluntarily withdrew our NDA on November 30, 2022, to develop more information about API-2 for the U.S. FDA’s review, to address the U.S. FDA’s concerns of a lack of demonstrated difference between MCS-2 and placebo for the primary efficacy endpoint, and to resolve other issues the U.S. FDA had previously identified (and discussed above). In the December 12, 2022 Acknowledge Withdrawal from the U.S. FDA, the U.S. FDA stated that “this withdrawal will not prejudice any future decisions on filing” if we decide to resubmit our NDA, and we can retain the application number (NDA 212872). The retention of the NDA number signifies the U.S. FDA’s acknowledgment that they have not refused to file (RTF) NDA 212872. Instead, the Company voluntarily withdrew it. Retaining the application number allows the U.S. FDA to review the Company’s prior submissions when the Company resubmits study and CMC data in the future. We have been conducting further research and development on MCS-2 and identified an additional source for the botanical drug substance API-2. API-1 and API-2 are similar drug substances covered by the same patent owned by us; however, because they are sourced from raw materials manufactured in different locations, the U.S. FDA considers them to be different botanical drug substances. Therefore, we will conduct a comparability study for API-1 and API-2. We submitted a meeting request to the U.S. FDA on April 14, 2023 with our very preliminary comparative specifications of API-1 and API-2, and request that the U.S. FDA provide a WRO to questions about our refiling of the NDA for MCS-2 using API-2. The U.S. FDA agreed to our request and responded in writing on June 26, 2023. The U.S. FDA informed us that the information we provided on API-2 was not sufficient to demonstrate comparability with API-1. In addition to the current unavailability of API-1, the U.S. FDA explained that we had not demonstrated a statistically significant difference between MCS-2 with API-1 and placebo in the primary efficacy endpoint in the MCS-2-US-a study. The U.S. FDA stated that without new clinical information, any resubmission of the NDA for MCS-2 would be at risk of a RTF action from the U.S. FDA. We submitted a Type D WRO meeting request to the U.S. FDA on December 12, 2023. We asked that the U.S. FDA provide a written response to questions focused on obtaining the U.S. FDA’s review and comments on a new, proposed Phase III clinical trial protocol for MCS-2 with API-2 and a Phase I PK study. We proposed to address CMC information for MCS-2 in a separate, future meeting. The U.S. FDA granted our WRO meeting request but clarified that they viewed the meeting as a Type C meeting because it encompasses an entirely new drug development program, including Phase I PK study and Phase III clinical trial for MCS-2 made from API-2, which the U.S. FDA characterizes as a new product with a new active pharmaceutical ingredient. The Company provided its proposed additional Phase III study protocol and Phase I PK study synopsis using API-2 on December 12, 2023, for the U.S. FDA to review and approve the acceptability of the study design. The U.S. FDA sent us written responses on February 23, 2024, which included comments on the revisions in the Phase III protocol and asked for the SAP (statistical analysis plan) for the Phase III protocol. The U.S. FDA also asked the Company to develop the protocol for the PK study from the submitted synopsis. The Company is following the U.S. FDA’s requirements in each respect. In addition, we will need to perform studies demonstrating that the source of API-2 is sufficiently similar botanical drug substance. We plan to request a meeting with U.S. FDA to discuss their concerns regarding the CMC data separately and by providing to U.S. FDA more analytical testing for the API-2 for the U.S. FDA to assess whether API-1 and API-2 are comparable. If our new Phase I PK and Phase III studies are successful and we address the other deficiencies the U.S. FDA has previously identified (including clinical, pharmacological, statistical, pharmaceutical manufacturing, validation, and other issues), we plan to resubmit our NDA for MCS-2 under the same NDA number to the U.S. FDA. The resubmission timeline is unclear at this point, depending on the comments from the U.S. FDA. BPH/LUTS is the most common urinary tract disease in the middle-aged male population. According to Frost & Sullivan, the global prevalence of BPH increased from 88.4 million in 2017 to 94.2 million in 2020, representing an increase of 6.5%. The global BPH drugs market increased from US$3.7 billion in 2017 to US$4.1 billion in 2020, representing a CAGR of 4.6%. We are establishing a strong sales and marketing team that is expected to consist of employees with rich experience in relevant areas and our target markets, and plan to work with both domestic and international business partners to seize market opportunities and to help more patients reduce their distress caused by BPH/LUTS and drug side effects caused by chemical drugs. • PCP: PCP is our new botanical drug candidate developed for the prevention of prostate cancer. PCP, like MCS-2, contains patented active pharmaceutical ingredients derived from botanical raw materials, specifically, Lycopersicon esculetum L. PCP contains, in the largest concentrations, five carotenoids including lycopene, phytoene, phytofluene, tocopherol and beta-carotene. PCP and MCS-2 are essentially the same in terms of active ingredients, dosage form, strength and route of administration; however, they are different drug candidates targeting different indications. Our PCP Phase II study enrollment and treatment phase using API-1 is in the source data verifications (“SDV”) stage, which may take an additional year or more to complete. After completion of the SDV stage, we will conduct the necessary statistical analysis. While PCP is still in the SDV stage, we are working with the U.S. FDA to establish the comparability of the API-1 and API-2. To date, we have not had any discussions with the TFDA regarding the unavailability of API-1. We will discuss the statistical results of the PCP using API-2 with Taiwan regulator and proceed with the Phase III PCP study if the U.S. FDA accepts such results and determines that API-1 and API-2 are comparable. The PCP shall not proceed to Phase III until the U.S. FDA accepts the results and determines that API-1 and API-2 are comparable. Based on our prior communications with the TFDA, the Chemistry, Manufacturing, and Controls (“CMC”) and study design for the product are consistent between the U.S. and Taiwan, encompassing two pivotal studies and two open-label extension studies. The protocol for the Phase III clinical trials was approved by the U.S. FDA in December 2009 and subsequently approved by the TFDA in February 2010. Therefore, we believe the TFDA will give due consideration to the comments provided by the U.S. FDA. We have completed the CMC documentation on the active pharmaceutical ingredient-2 (API-2) and a plan to establish comparability between API-1 and API-2 and submitted it to the U.S. FDA on October 16, 2024, and are awaiting feedback from the U.S. FDA. As of this date, the Company is still in the process of providing the information required by the U.S. FDA and has not yet successfully demonstrated the comparability of API-1 and API-2. We are currently collaborating with a supplier to prepare the API-2 CMC documents required by the U.S. FDA. Should the FDA concur that API-1 and API-2 are similar and comparable, we will sign the Quality Agreement with this supplier for the raw materials for API-2. If the U.S. FDA does not agree that API-1 and API-2 are comparable, we will continue to research additional API sources based on our own patent, to pursue additional outsourcing API vendors, and to follow U.S. FDA’s guidance for demonstrating comparability between API-1 and API-2 to the U.S. FDA’s satisfaction. In the event that we are unable to establish comparability between API-1 and API-2, we will be required to repeat the PCP clinical trials using API-2. Prostate cancer begins when cells in the prostate gland start to grow out of control. In general, the more quickly prostate cells grow and divide, the more chances there are for mutations to occur. According to Frost & Sullivan, the global prevalence of prostate cancer increased from 10.0 million in 2017 to 11.2 million in 2020, representing a CAGR of 3.9%. The global prostate cancer market increased from US$9.7 billion in 2017 to US$12.6 billion in 2019, representing a CAGR of 9.1%. In addition, the prostate-specific antigen abnormal population, or PSA abnormal population, representing men over 40 years old with a prostate-specific antigen test value of 4.0 ng/ml or higher, is exposed to a high risk of prostate cancer. From 2015 to 2020, the total number of PSA abnormal populations in the U.S., Taiwan and China increased from 5.0 million to 5.3 million. • IC: Interstitial Cystitis (IC) is our additional key new botanical drug candidate which is composed of polysorbate loaded micelles as nanocarriers which could be used in intravenous injection and intravesical instillation. IC may be a candidate for treatment of certain bladder pain symptoms. IC/BPS, refers to interstitial cystitis and bladder pain symptoms that is often associated with voiding symptomatology and other systemic chronic pain disorders. We incurred research and development expenses of approximately US$1.3 million, US$1.1 million, and US$0.5 million for the years ended December 31, 2022 and 2023, and the six months ended June 30, 2024, respectively. The accompanying financial statements in this prospectus have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be unable to continue as a going concern. We concluded that there is substantial doubt about our ability to continue as a going concern for a period of one year from the date that these unaudited interim consolidated financial statements are issued. In addition, our independent registered public accounting firm has issued a report that included an explanatory paragraph referring to our significant net losses, working capital deficit and need to raise additional funds, which also raised substantial doubt about our ability to continue as a going concern as it noted. As of the date of this prospectus, we have not generated revenue and we had a net working capital deficit of approximately US$12.5 million and US$11.7 million as of December 31, 2023 and June 30, 2024, respectively. This deficit included accrued expenses of approximately US$1.1 million and US$0.9 million, accounts payable of approximately US$2,000 and US$9,000, short-term and long-term loan from banks of approximately US$8.0 million and US$7.5 million, which will be due within the next twelve months, other current liabilities of approximately US$5.0 million and US$3.1 million due to litigation with Taizhou Bay New District Administrative Committee and commitments with Taizhou Resources Bureau, and accrued interest owed under the loan agreement with related parties of approximately US$0.1 million and US$0.1 million as of December 31, 2023 and June 30, 2024, respectively. We will return back land using right to the Taizhou Resource Bureau, according to the notification it has issued to us on September 26, 2024, and $2.9 million of the land idling fee will be waived by the Taizhou Resource Bureau. As a result, $2.9 million of other current liabilities due to comments with Taizhou Resources Bureaus will be reversed when we return land using right to the Taizhou Resource Bureau. If we are unable to complete the offering for a sufficient amount in a timely manner, we may need to seek other financing alternatives such as private financing of debt or equity or collaboration agreements. We will seek future funding based on the requirements of our business operations until we obtain regulatory approvals to market and commercialize our drug candidates and generate sufficient revenue from them. We have the ability to exercise discretion and flexibility to deploy our capital resources used in research and development activities according to the amount and timing of our financing activities. We cannot guarantee that we are able to obtain future financing in sufficient amounts or on terms acceptable to us, if at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to: • significantly delay, scale back or discontinue the development or commercialization of our product candidates; • seek corporate partners for our product candidates when we would otherwise develop our product candidates on our own, or at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; • relinquish or license on unfavorable terms, our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves; or • significantly curtail or cease operations. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented from pursuing development and commercialization efforts, which will have a material and adverse effect on our business, operating results and prospects. As of the date of this prospectus, only two botanical drug products have received the U.S. FDA’s approval for marketing as prescription drugs. The U.S. FDA has not approved any botanical drug products since 2012. The quality control of botanical drug products is very complex due to the variability of botanical raw material and the need to demonstrate that the therapeutic effect for the tested botanical drug product batches is the targeted constituent (or constituents in the aggregate). It is challenging to ensure batch-to-batch consistency, which must be demonstrated to obtain U.S. FDA approval. Minor changes in geographical location of the API source or the manufacturing process can result in meaningful differences in clinical effects and may mean that earlier developed pharmacological, nonclinical and clinical data no longer apply to the changed product. If we are unable to obtain the U.S. FDA’s approval for marketing our drug candidates, or if we experience significant delays in doing so, our business could be materially and adversely affected. Our principal executive offices of our operating subsidiaries are located in New Taipei City, Taiwan.
