SCNX 8-K
Scienture Holdings, Inc. (SCNX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
The information set forth in Item 5.02 below is incorporated herein by reference into this Item 1.01.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 13, 2025, the Board of Directors of Scienture Holdings, Inc. (the “Company”) appointed Eric Sherb to serve as the Company’s Chief Financial Officer effective as of March 13, 2025 (the “Effective Date”). Mr. Sherb (age 38), has served as an accounting consultant for the Company since 2023. The Company’s addition of Mr. Sherb as its full-time Chief Financial Officer brings 16 years of experience in accounting advisory, auditing, and mergers and acquisitions, with substantial experience in financial reporting for public entities.
Mr. Sherb will succeed Prashant Patel, who previously served as the Company’s Interim Principal Financial/Accounting Officer. Mr. Patel notified the Company’s Board of Directors of his intention to resign his position as Interim Principal Financial/Accounting Officer effective as of the Effective Date. Mr. Patel will continue to serve as the Company’s President and Chief Operating Officer. Mr. Patel’s decision to resign as the Company’s Interim Principal Financial/Accounting Officer is not the result of any dispute or disagreement with the Company, the Company’s management or the Company’s Board of Directors on any matter relating to the Company’s operations, policies or practices.
In connection with Mr. Sherb’s appointment as Chief Financial Officer, the Company and EMS Consulting Services, Inc., an entity controlled by Mr. Sherb, entered into an independent contractor agreement (the “Agreement”) whereby Mr. Sherb has agreed to perform, on a full-time basis, all services (a) assigned by the Company’s Chief Executive Officer and (b) otherwise necessary or convenient in fulfilling the obligations associated with serving as the Chief Financial Officer of a publicly-traded company with common stock listed on The Nasdaq Marketplace LLC. In exchange, the Company has agreed to pay Mr. Sherb (i) an annual cash fee of $100,000; (ii) an annual grant of shares of the Company’s common stock equal to an aggregate amount of $50,000, to be issued as soon as reasonably practicable upon signing of this Agreement and every year thereafter during the term of the Agreement; and (c) an annual discretionary bonus in an amount, if any, determined in the sole discretion of the Company’s Board of Directors. The Agreement became effective on the Effective Date and will continue until terminated by the Company or Mr. Sherb on no less than 14 days’ prior notice. The Agreement is filed as Exhibit 5.1 hereto and is incorporated herein by reference.
The Company has not been party to any transactions with Mr. Sherb since the beginning of the Company’s last fiscal year where the amount involved exceeds the lesser of $120,000 or on percent of the average of the Company’s total assets at year-end for the last two completed fiscal years.
Item 5.07. Submission of Matters to a Vote of Security Holders.
Scienture Holdings, Inc. (the “Company”) held its 2024 Annual Meeting of Stockholders both (the “Annual Meeting”) virtually via a live webcast on March 10, 2025. The Company’s stockholders voted on five proposals at the Annual Meeting, each of which is listed below and described in more detail in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on January 27, 2025, as modified on February 18, 2025. With respect to each proposal, holders of the Company’s common stock, par value $0.00001 (“Common Stock”) were entitled to cast one vote per share of Common Stock held as of the close of business on the record date of January 9, 2025. At the beginning of the Annual Meeting, holders of Common Stock representing 6,289,061 votes were represented in person or by proxy at the Annual Meeting, which represented 71.87% of the voting power of the 8,750,582 shares of Common Stock entitled to vote at the Annual Meeting and constituted a quorum for the transaction of business.
At the Annual Meeting, the Company’s stockholders voted on the following proposals:
| 1. | To elect five directors to serve on the Board until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified, or until their earlier resignation or removal; |
| 2. | To ratify the appointment of CM3 Advisory as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025; |
| 3. | To consider and approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers; and |
| 4. | To consider and select the preferred frequency for conducting future stockholder advisory votes on named executive officer compensation on a non-binding, advisory basis. |
The final results of voting on each of the proposals presented at the Annual Meeting, as certified by the Company’s independent inspector of election, are set forth below.
Proposal No. 1: Election of Directors.
The stockholders elected each of the five director nominees to serve on the Company’s Board of Directors until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified, or until their earlier resignation or removal. The results of the vote taken were as follows:
| Nominee | Votes For | Votes Against | Abstentions | Broker Non-Votes | ||||
| Surendra Ajjarapu | 6,225,992 | 1,226 | 12,582 | 49,261 | ||||
| Donald G. Fell | 6,199,653 | 1,243 | 38,904 | 49,261 | ||||
| Mayur Doshi | 6,220,506 | 1,242 | 18,052 | 49,261 | ||||
| Subbarao Jayanthi | 6,220,506 | 1,238 | 18,056 | 49,261 | ||||
| Shankar Hariharan | 5,157,373 | 1,064,371 | 18,056 | 49,261 |
Proposal No. 2: Ratification of Appointment of Independent Registered Public Accounting Firm
The stockholders ratified the appointment by the Board’s Audit Committee of CM3 Advisory as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025. The results of the vote taken were as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 6,275,649 | 823 | 12,589 | — |
Proposal No. 3: Approval, on a Non-Binding, Advisory Basis, of the Compensation of the Company’s Named Executive Officers
The stockholders approved the non-binding advisory resolution approving the compensation of the Company’s named executive officers. The results of the vote taken were as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 6,270,914 | 5,494 | 12,653 | — |
Proposal No. 4: Approval, on a Non-Binding, Advisory Basis of the Frequency of Conducting Future Stockholder Advisory Votes on Named Executive Officer Compensation
The stockholders voted in favor of “1 Year” as the preferred frequency for holding future advisory votes to approve the compensation of the Company’s named executive officers. The results of the vote taken were as follows:
Shares Voted For 1 Year | Shares Voted For 2 Years | Shares Voted For 3 Years | Abstentions | Broker Non-Votes | ||||
| 3,829,343 | 503 | 2,393,125 | 16,829 | 49,261 |
Proposal No. 5: Approval of Adjournment of the Annual Meeting, if Necessary or Appropriate
The stockholders of the Company approved a proposal to adjourn the Annual Meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies if there were insufficient votes to approve the presented proposals or to constitute a quorum. Although this proposal was approved by the Company’s stockholders, because there was a quorum present and there were sufficient votes represented at the time of the Annual Meeting to approve the proposals, adjournment of the Special Meeting was deemed unnecessary. The results of the vote taken were as follows:
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| 6,263,377 | 12,498 | 13,186 | — |
Item 9.01. Financial Statements and Exhibits.
| Exhibit No. | Description | |
| 5.1 | Independent Contractor Agreement by and between Scienture Holdings, Inc. and EMS Consulting Services, LLC. | |
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SCIENTURE HOLDINGS, INC. | ||
| By: | /s/ Surendra Ajjarapu | |
| Surendra Ajjarapu | ||
| Chief Executive Officer | ||
| Date: March 13, 2025 | ||
Exhibit 5.1
INDEPENDENT CONTRACTOR AGREEMENT
THIS INDEPENDENT CONTRACTOR AGREEMENT (this “Agreement”) is made as of March 13, 2025 (the “Effective Date”), by and between Scienture Holdings, Inc., a Delaware corporation (the “Company”) and EMS Consulting Services, LLC (the “Contractor”). In consideration of the mutual covenants, terms and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Contractor agree as follows:
1. Services. Subject to approval by the Company’s Board of Directors, Eric Sherb, a member of the Contractor (the “Principal”) shall serve as the Company’s Chief Financial Officer (“CFO”) during the term of this Agreement.
(a) Upon execution of this Agreement, the Principal will report to the Company’s Chief Executive Officer (“CEO”) and agrees to perform all services (i) assigned by the CEO and (ii) otherwise necessary or convenient in fulfilling the obligations associated with serving as the CFO of a publicly-traded company with common stock listed on The Nasdaq Marketplace LLC (“Nasdaq”), including, but not limited to, (A) overseeing and directing all financial and risk management activities of the Company; (B) assessing and evaluating the Company’s financial performance with regard to short and long-term goals, budgets and forecasts, managing audit processes (including working with the Company’s external auditor and audit committee); (C) overseeing the Company’s reporting and registration obligations under the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the execution by the Principal of any reports filed by the Company under the Securities Act or Exchange Act, as necessary; (D) overseeing the Company’s financial compliance functions (the “Services”).
(b) The Principal agrees to (i) use the Principal’s reasonable best efforts, skill, and attention as the primary financial principal for the Company in the best interest of the Company; (ii) comply with all applicable laws, rules, and regulations, including, but not limited to, the rules and regulations promulgated by Nasdaq, in connection with providing the Services to the Company; and (iii) provide the Services on a full-time basis by working no less than forty (40) hours per week for the Company.
(c) The Contractor represents and warrants to the Company that the Contractor has the full power and authority to provide the Services and that the provision of the Services will not result in the breach of any agreement to which the Contractor is a party.
2. Term and Termination. This Agreement will become effective as of the Effective Date, and will continue in effect until terminated by the Company or Consultant with or without cause upon no less than fourteen (14) days’ prior notice (the “Term”).
3. Fees. During the Term, the Company will pay Consultant the following fees as full consideration for the Services: (a) an annual cash fee of $100,000, payable in accordance with the Company’s standard accounts payable policies and procedures, (b) an annual grant of shares of the Company’s common stock equal to an aggregate amount of $50,000, to be issued as soon as reasonably practicable upon signing of this Agreement and every year thereafter during the Term, at a price equal to the closing price of the Company’s common stock as reported by Nasdaq on the date before such issuance, and (c) an annual discretionary bonus in an amount, if any, determined in the sole discretion of the Company’s Board of Directors to be paid in cash or in shares of the Company’s common stock.
4. Expenses. The Company shall reimburse the Consultant during the Term for all reasonable and necessary business expenses incurred by the Consultant in connection with the provision of the Services; provided, however, that any reimbursement by the Company of such expenses is contingent upon the Consultant complying with the Company’s expense reimbursement policies and procedures then in-effect and delivering any documentation regarding such expenses as reasonably requested by the Company.
5. Taxes. The Contractor agrees to provide to the Company any tax documentation, including, but not limited to, a Form W-9, as reasonably requested by the Company. The Contractor acknowledges and agrees that the Company shall provide a Form 1099 for tax filing purposes in accordance with the Company’s standard accounting policies and procedures. The Contractor acknowledges and agrees that (a) the Contractor solely is responsible for paying any applicable corporate and personal income taxes as required under the laws of any applicable jurisdictions in which the Contractor is subject to taxation and (b) the Company shall have no obligation therefore or related thereto. The Contractor agrees to indemnify and hold harmless the Company from and against any and all damages or losses suffered by the Company, directly or indirectly, as a result of, or based upon or arising from any failure by the Contractor to timely pay any tax or to comply with any applicable law relating to taxes.
6. Independent Contractor. The Contractor shall be deemed to be an independent contractor for all purposes under this Agreement and shall not be deemed to be a representative, agent, or employee of the Company in the performance of the Services.
7. Confidentiality and Intellectual Property. Consultant understands that the Company may suffer indeterminable and irreparable harm from the disclosure of any proprietary information not generally available to the public of the Company (“Confidential Information”). Contractor agrees to treat all Confidential Information as confidential and, unless otherwise prohibited by applicable law, shall not disclose any Confidential Information to any other person or entity without the consent of the Company. Consultant agrees to take, at the Company’s request, all necessary and appropriate measures to ensure adherence with the terms of this paragraph 7. For purposes of this paragraph 7, the “Company” shall refer to the Company as well as any affiliated entities and subsidiaries. The Contractor’s confidentiality obligations in this paragraph 7 shall survive termination of this Agreement.
8. Miscellaneous. This Agreement supersedes all prior agreements between the parties and constitutes the entire agreement between the parties. The parties agree that there are no other collateral agreements or understandings between them except as set out in this Agreement. This Agreement shall be deemed to be a contract governed by the laws of the State of Delaware and shall for all purposes (whether in contract or in tort) be construed in accordance with the laws of such state, without reference to the conflicts of law provisions thereof. This Agreement is not assignable by the Consultant. This Agreement is assignable by the Company. This Agreement may be amended only in a writing signed by both parties. All headings in this Agreement are for convenience only and shall not be used in the interpretation of this Agreement. Each of the parties, upon the request of any other party, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, documents and assurances as may be reasonably necessary or desirable to effect complete consummation of the transactions contemplated by this Agreement. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument and may be delivered by facsimile transmission.
[Signatures on next page.]
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first stated above.
| Scienture Holdings, Inc. | ||
| By: | /s/ Surendra Ajjarapu | |
| Surendra Ajjarapu | ||
| Chief Executive Officer | ||
| EMS Consulting Services, LLC | ||
| By: | /s/ Eric Sherb | |
| Eric Sherb | ||
| Authorized Signatory | ||