Company: OSRH
Filing Date: 2025-04-22
Form Type: 10-K
Source: 0001213900-25-034116
Chunk: 316

Company: OSR Holdings, Inc.
Filing Date: 2025-04-22
Form: 10-K
Item: Item 1A
Chunk 316
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 prospects may be materially diminished if the clinical development or potential commercialization
prospects of a subsidiary’s product candidate or program or one or more of the intellectual property rights held by a specific subsidiary
becomes impaired. Furthermore, a large proportion of our consolidated revenue may at any time be derived from one, or a small number of,
licensed technologies, and termination or expiration of licenses to these technologies would likely have a material adverse effect on
our consolidated revenue. Any material adverse impact on the value of a particular subsidiary, including its intellectual property rights
or the clinical development of its product candidate or program, could have a material adverse effect on our consolidated business, financial
condition, results of operations or prospects.

The business of our subsidiary that is a distributor of medical
products is subject to other risks, including risks related to its customer concentration, its holding inventory that may decline in value,
foreign exchange rate fluctuations, its dependency on sales agency agreements and the risks relating to economic conditions and government
regulation of 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