Company: OSRH
Filing Date: 2025-04-22
Form Type: 10-K
Source: 0001213900-25-034116
Chunk: 79

Company: OSR Holdings, Inc.
Filing Date: 2025-04-22
Form: 10-K
Item: Item 1
Chunk 79
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 the healthcare industry in Korea.

Our Korean subsidiary, RMC, is a distributor of medical products currently
serving only the Korea market. Three customers of RMC have in recent years represented approximately 95% of RMC’s total sales.
This customer concentration creates risks for RMC (and OSR) in the event that one or more of those customers terminates its distribution
agreement with RMC, one of which occurred on November 20, 2024, when Penumbra Inc. and RMC terminated negotiations for a new (or
extended) distribution agreement. Sales of Penumbra’s reperfusion catheter, neuron delivery catheter and related tubing and canister
represented between 27% and 47% of RMC’s quarterly revenues in 2023 and 2024, and 40% and 36% of revenues for the years ending December 31,
2023 and 2024, respectively. While RMC may continue to sell its existing inventory of Penumbra products (Penumbra will not repurchase
RMC’s inventory), RMC may be unable to sell its inventory or to sell it without discounting the prices. If RMC is unable to sell
its inventory and is required by accounting rules to write off the inventory, RMC may incur losses. Since RMC is OSR’s only revenue
producing subsidiary, with the termination of RMC’s distribution agreement with Penumbra, OSR expects its revenue to decrease substantially
in 2025 and possibly longer, until RMC can replace sales of Penumbra’s products by increasing sales of products from other manufacturers.
While RMC intends to replace sales of Penumbra products by becoming the sales representative of other neuro-intervention medical
device equipment manufacturers, as well as expanding sales of products offered by companies it currently represents, such efforts may
take a substantial time period (which RMC cannot predict) for revenues to return to their current levels.

RMC is required under some of its sales agency agreements to make annual
minimum purchases of products, which if not sold may decline in value and require RMC to write-down the value under accounting standards.
In addition, failure to meet sales goals may result in termination of RMC’s contracts with medical product manufacturers. RMC’s
sales are currently exclusively to hospitals, hospital networks and physicians across Korea, so that its business is highly dependent
upon economic conditions and government regulation of the healthcare industry in Korea.

Our principal assets are our interests in