1. Introduction

These Corporate Governance Guidelines (the "Guidelines") set forth the framework for the governance practices followed by the Board of Directors (the "Board") of Scienture Holdings, Inc. (the "Company"). The Board is committed to maintaining the highest standards of corporate governance and integrity in managing the Company’s affairs. These Guidelines reflect the Company's commitment to transparency, accountability, and stakeholder engagement.

2. Board Composition

Board Size and Structure

The Board shall be composed of an appropriate number of directors as determined by resolution of the Board in accordance with the Company’s Amended and Restated Bylaws, with a majority being independent non-executive directors. The Board will periodically review its composition to ensure that it provides the necessary expertise, independence, and diversity.

Independence

A director is considered independent if (i) they satisfy all of the applicable independence requirements of Nasdaq or such other securities exchange upon which the Company’s securities are listed at any time and (ii) the Board affirmatively determines that they have no material relationship with the Company, its executives, or its major shareholders that could compromise their ability to act objectively in the best interests of the Company and its shareholders.

Board Leadership

The roles of the Chairperson of the Board and the Chief Executive Officer (CEO) should be separate. The Chairperson should be an independent director to ensure effective leadership of the Board and proper oversight of management.

Director Qualifications and Diversity

The Board shall seek directors with diverse backgrounds, experiences, and skills, including those in areas such as healthcare, science, regulatory affairs, finance, and law. Diversity is a key component in ensuring a variety of perspectives in Board decision-making. The Board believes that director candidates should have certain minimum qualifications, including being able to read and understand basic financial statements and having the highest personal integrity and ethics.

Limit on Number of Other Boards

Performing the duties and fulfilling the responsibilities of a director requires a significant commitment of time and attention.  The Board does not believe, however, that explicit limits on the number of other boards of directors on which a director sits, or on other activities a director pursues, are appropriate.  The Board, however, recognizes that excessive time commitments can interfere with a director’s ability to perform and fulfill his or her duties and responsibilities effectively. The Nominating Committee will consider whether the performance of a Director has been or is likely to be adversely affected by excessive time commitments, including service on other boards of directors.  Directors must notify the Chair of the Nominating Committee prior to accepting a seat on the board of directors of another business corporation so that the potential for conflicts or other factors compromising the director’s ability to perform or fulfill his duties and responsibilities may be fully assessed by the Board’s leadership.

Term and Age Limits

The Board does not believe that limits on the number of consecutive terms a director may serve or on the directors’ ages are appropriate in light of the substantial benefits of a sustained focus on the Company’s business, strategy and industry over a significant period of time.  Each director’s performance will be assessed by the Nominating Committee in light of relevant factors.

Stockholder Recommendations and Nominations

The Nominating Committee shall consider candidate recommendations from stockholders and evaluate such candidates in accordance with the criteria discussed herein. A stockholder desiring to nominate a person directly for election to the Board at an annual meeting of the stockholders must meet the deadlines and other requirements in the Company’s bylaws and all applicable laws and regulatory requirements.

Directors With a Change in Professional Status

The Board does not believe directors who retire or change their principal occupation or business association should necessarily leave the Board.  However, promptly following any such event, the director should notify the Nominating Committee, so that it can review and advise the Board regarding the continued appropriateness of the director’s Board membership.

3. Responsibilities of the Board

Oversight of Management and Performance

The Board is responsible for overseeing the Company’s business, strategic direction, financial performance, and management practices. This includes:

Approving the Company’s strategy and ensuring its alignment with long-term goals.

Evaluating the performance of the CEO and senior management.

Ensuring adequate succession planning for key executive roles.

Ethical and Legal Compliance

Although management has responsibility for the day-to-day performance of the Company, the Board shall exercise oversight over management in order to ensure that the Company complies with applicable laws, regulations, and ethical standards, including those specific to the pharmaceutical industry such as regulatory drug approval processes, clinical trials, manufacturing, operational and financial matters and marketing practices.

Corporate Social Responsibility (CSR)

The Board will support and oversee the Company’s CSR initiatives in order to ensure alignment with the Company’s values and long-term sustainability goals, including initiatives to improve patient access to medicines and reduce environmental impacts.

4. Board Committees

Audit Committee

The Audit Committee shall consist solely of independent directors and be responsible for:

• Overseeing the Company’s financial reporting and audit process.
• Monitoring internal controls in order to ensure the accuracy of financial statements.
• Reviewing the Company’s compliance with legal and regulatory requirements.

Compensation Committee

The Compensation Committee shall be responsible for:

• Reviewing and approving executive compensation policies and packages.
• Ensuring that executive compensation is aligned with the Company’s performance and long-term shareholder interests.
• Developing succession plans for senior management roles.

Nominating and Governance Committee

The Nominating and Governance Committee shall be responsible for:

• Identifying qualified individuals for Board membership and recommending appointments.
• Reviewing the performance of the Board and its committees.
• Ensuring the effectiveness of governance practices and compliance with these Guidelines.
5. Director Responsibilities

Attendance and Preparation

Directors are expected to attend all Board meetings and relevant committee meetings, and come prepared to engage in meaningful discussions. Directors should devote sufficient time and effort to fulfill their responsibilities.

Code of Conduct

Directors must adhere to the Company’s Code of Conduct, which outlines expectations for ethical behavior, compliance with laws, and the handling of conflicts of interest. Each director must annually complete a conflict-of-interest disclosure form. The Board shall also oversee the compliance of management and employees with the Company’s Code of Conduct. Only the Board shall have the authority to grant waivers thereof.

Conflicts of Interest

Directors must promptly disclose any potential conflicts of interest, and refrain from participating in any discussions or decisions where they have a personal interest. Any material transaction or relationship that could lead to a conflict must be disclosed to the Board.

Executive Sessions

The non-management directors will meet at regularly scheduled executive sessions without management participation, and at least once each year the non-management directors alone will meet in executive session.  If the Chair is a non-management director and an independent director, then the Chair will preside at these meetings.  If the Chair is not an independent director, then the director who presides at these meetings will be chosen by those present at a meeting.  In either case, the director who presides at these meetings, and his or her name, or the process by which he or she is selected, will be disclosed, if required by SEC rules, in the annual proxy statement or, if the Company does not file an annual proxy statement, in the Company’s annual report on Form 10-K filed with the SEC.  To permit interested parties to make their concerns known to the non-management directors, the Company will also disclose a method by which they can communicate directly and confidentially with the presiding Director or with the non-management directors as a group.

6. Executive Compensation

Alignment with Company Performance

Executive compensation should be designed to align the interests of management with the long-term success of the Company and the interests of shareholders. The Compensation Committee will review and approve the compensation packages for the CEO and other senior executives.

Incentive Programs

The Company shall have appropriate short-term and long-term incentive programs, including performance-based stock options and bonuses. The Compensation Committee is responsible for approving and overseeing these programs in order to support the Company’s business strategy and long-term goals.

Clawback Provisions

The Company shall have clawback provisions in place to recover any bonuses or stock options if financial results are restated due to misconduct or errors in compliance with applicable SEC and stock exchange listing requirements.

7. Shareholder Engagement

Transparency

The Company shall provide timely, accurate, and comprehensive information to its shareholders, including annual and quarterly reports, and any other material information that may impact shareholder decisions.

Annual General Meeting (AGM)

The Company shall hold an AGM where shareholders can engage with the Board, ask questions, and vote on key matters, including the election of directors, executive compensation, and other significant decisions.

Shareholder Rights

Shareholders have the right to propose matters for consideration at the AGM, subject to the provisions of the Company’s articles of incorporation, bylaws and relevant laws. Shareholder views and concerns will be taken into account by the Board.

8. Board Evaluation

Self-Assessment

The Board shall conduct an annual self-assessment to evaluate its performance, the performance of its committees, and the effectiveness of its governance practices.

Director Evaluations

The Board will evaluate individual directors on an ongoing basis, assessing their contributions, attendance, and commitment to the Company’s goals.

9. Corporate Governance Practices

Ongoing Education

The Company shall provide regular training and educational opportunities for its directors to stay current on industry trends, governance best practices, and regulatory developments.

Amendment of Guidelines

These Guidelines may be amended from time to time by the Board, as needed, to ensure they remain aligned with the Company’s goals and evolving best practices in corporate governance.

10. Conclusion

The Board is committed to upholding the principles of good corporate governance and ensuring that the Company operates with the highest levels of integrity, transparency, and accountability. These Guidelines serve as a foundation for maintaining effective governance practices, mitigating risks, and enhancing shareholder value.

February 2025

Scienture Holdings Board of Directors