COSM 10-K & 10-Q changes, risk factors and insider trading
Cosmos Health Inc. · Nasdaq · Wholesale-Drugs, Proprietaries & Druggists' Sundries · CIK 1474167 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Most-Favoured-Nation (MFN) Pricing and Section 232 Tariffs”
Largest changes
“The U.S. Inflation Reduction Act of 2022 (the "IRA"), includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025 (now effective), thereby effectively eliminating the coverage gap; impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S. …”see in full comparison
“Most-Favoured-Nation (MFN) Pricing and Section 232 Tariffs”see in full comparison
“In December 2024, the EU annual inflation was at 2.4%, significantly lower, compared with 2023, when the annual inflation reached the highest level ever measured at 3.4%. The annual average change in the harmonized index of consumer prices (HICP) in the EU during the period 2015-2024 was 2.52%. The high inflation has adversely affected our business due to the higher costs of purchasing raw materials, the higher transportation costs and the significantly increased operating costs. …”see in full comparison
“In addition, the significant increase in global benchmark interest rates in recent years has adversely affected our business, as substantially all of our loan facilities carry floating interest rates, which may result in increased financing costs and higher cash outflows. During 2025, we observed a modest decline in floating benchmark rates following monetary policy easing by major central banks, including the Federal Reserve and the European Central Bank. …”see in full comparison
“In December 2025, the annual inflation rate in the European Union was approximately 2.3%, reflecting a continued moderation compared to the elevated inflation levels observed in prior years. The annual average change in the Harmonized Index of Consumer Prices (HICP) in the EU during the ten-year period from 2016 to 2025 was approximately 2.6%.”see in full comparison
“Inflationary pressures in recent years have adversely affected our business due to higher costs for raw materials, increased transportation expenses, and higher overall operating costs. Although inflation has moderated during 2024 and 2025, cost levels across several categories remain elevated compared to historical averages.”see in full comparison
Full comparison: every changed paragraph (11)
Currency exchange rate fluctuations could adversely affect our results of operation and financial condition In 2024,2025, we recognized 100%more percentthan 98% of our net sales in markets outside the United States, while we commenced initial sales in the US through our Sky Premium Life nutraceutical brand, with the majority of revenues still generated outside the US., the majority of which were recognized in each market’s respective local currency. We purchase inventory from companies in foreign markets, some of them in U.S. dollars. In preparing our financial statements, we translate net sales and expenses in foreign countries from their local currencies into U.S. dollars using average annual exchange rates. Because our sales are in foreign countries, exchange rate fluctuations may have a significant effect on net sales and earnings. Our reported earnings have been significantly affected by fluctuations in currency exchange rates, with net sales and earnings generally increasing with a weaker U.S. dollar and decreasing with a strengthening U.S. dollar.
Geopolitical issues, conflicts and other global events could adversely affect our results of operations and financial condition Because our business is conducted outside of the United States, it is subject to global political issues and conflicts such as the current war in the Ukraine.Ukraine or the conflict in the Middle East. Such political issues and conflicts could have a material adverse effect on our results of operations and financial condition if they escalate in areas in which we do business. In addition, changes in and adverse actions by governments in foreign markets in which we do business could have a material adverse effect on our results of operations and financial condition.
We collect and retain large volumes of data from employees and independent consultants, including credit card numbers and other personally identifiable information, for business purposes, including transactional and promotional purposes. Our various information technology systems enter, process, summarize and report such data. The integrity and protection of this data are critical to our business. We are subject to significant security and privacy regulations, as well as requirements imposed by the credit card industry. Similarly, a failure to adhere to the payment card industry’s data security standards could cause us to incur penalties from payment card associations, termination of our ability to accept credit or debit card payments, litigation and adverse publicity, any of which could have a material adverse effect on our business and financial condition. Maintaining compliance with these evolving regulations and requirements could be difficult and may increase costs. In addition, a penetrated or compromised data system or the intentional, inadvertent, or negligent release or disclosure of data could result in theft, loss or fraudulent or unlawful use of company, employee, consultant or guest data which could adversely affect our reputation, disrupt our operations, or result in remedial and other costs, fines or lawsuits, which could have a material adverse effect on our results of operations and financial condition. Although we take measures to protect the security, integrity and confidentiality of our data systems, we experience cyber-attacks of varying degrees and types on a regular basis. Our infrastructure may be vulnerable to these attacks, and in some cases, it could take time to discover them. Breaches of our data systems, or those of our vendors, whether from circumvention of security systems, denial-of-service attacks or other cyber-attacks, hacking, “phishing” attacks, computer viruses, ransomware or malware, employee or insider error, malfeasance, social engineering, vendor software supply chain compromises, physical breaches or other actions, could result in material interruptions or malfunctions in our or such vendors’ websites, applications, data processing, or disruption of other business operations. For various reasons or circumstances, our employees may work remotely from time to time. Additionally, outside parties may attempt to fraudulently induce employees, users, or customers to disclose sensitive information to gain access to our data or our users’ or customers’ data. Any such breach or unauthorized access could result in the unauthorized disclosure, misuse or loss of sensitive information and lead to significant legal and financial exposure, regulatory inquiries or investigations, loss of confidence by our sales force, disruption of our operations and damage to our reputation. These risks are heightened as we work with third-party partners and as our sales force uses social media, as the partners and social media platforms could be vulnerable to the same types of breaches.
We may be required to expend significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences. A cyber-attack could also lead to litigation, fines, other remedial action, heightened regulatory scrutiny and diminished customer confidence. In addition, our remediation efforts may not be successful, and we may not have adequate insurance to cover these losses. The unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could have a material adverse effect on our business, results of operations, cash flows and financial condition. Moreover, cyber-attacks against the Ukrainian government and other countries in the region have been reported in connection with the recent conflicts between Russia and Ukraine.Ukraine and in the Middle East, including Iran. To the extent such attacks have collateral effects on global critical infrastructure, financial institutions or us, such developments could adversely affect our business, operating results and financial condition. At this time, it is difficult to assess the likelihood of such threat and any potential impact at this time.
In December 2025, the annual inflation rate in the European Union was approximately 2.3%, reflecting a continued moderation compared to the elevated inflation levels observed in prior years. The annual average change in the Harmonized Index of Consumer Prices (HICP) in the EU during the ten-year period from 2016 to 2025 was approximately 2.6%.
Inflationary pressures in recent years have adversely affected our business due to higher costs for raw materials, increased transportation expenses, and higher overall operating costs. Although inflation has moderated during 2024 and 2025, cost levels across several categories remain elevated compared to historical averages.
In addition, the significant increase in global benchmark interest rates in recent years has adversely affected our business, as substantially all of our loan facilities carry floating interest rates, which may result in increased financing costs and higher cash outflows. During 2025, we observed a modest decline in floating benchmark rates following monetary policy easing by major central banks, including the Federal Reserve and the European Central Bank. However, interest rates remain, on average, higher than levels observed during most periods prior to the recent tightening cycle, which may continue to result in higher financing costs for the Company.
In December 2024, the EU annual inflation was at 2.4%, significantly lower, compared with 2023, when the annual inflation reached the highest level ever measured at 3.4%. The annual average change in the harmonized index of consumer prices (HICP) in the EU during the period 2015-2024 was 2.52%. The high inflation has adversely affected our business due to the higher costs of purchasing raw materials, the higher transportation costs and the significantly increased operating costs. Moreover, the significant rise in the interest rates during 2023 may also adversely affect our business since all of our loan facilities carry floating interest rates and this may cause increased financing outflows. In 2024 we noticed a slight decrease in the floating rates mostly affected by the interest rate cuts imposed by the Federal Reserve, however they are on average still significantly higher compared to all recent periods prior to 2023.
The U.S. Inflation Reduction Act of 2022 (the “IRA”), includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025,2025 (now effective), thereby effectively eliminating the coverage gap; impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition; require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation; and delay until January 1, 2032 the implementation of the U.S. Department of Health and Human Services (HHS) rebate rule that would have limited the fees that pharmacy benefit managers can charge. Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one rare disease designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it may not qualify for the orphan drug exemption. Although we do notcurrently have currentlimited sales in the United States, the effects of the IRAIRA, including any regulatory action by the Trump Administration pertaining to the IRA, on any future business of ours and the healthcare industry in general is not yet known.
Most-Favoured-Nation (MFN) Pricing and Section 232 Tariffs
The U.S. Inflation Reduction Act of 2022 (the "IRA"), includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025 (now effective), thereby effectively eliminating the coverage gap; impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition; require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation; and delay until January 1, 2032 the implementation of the U.S. Department of Health and Human Services (HHS) rebate rule that would have limited the fees that pharmacy benefit managers can charge. Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one rare disease designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it may not qualify for the orphan drug exemption. The administration has also pursued Most-Favoured-Nation (MFN) pricing agreements, which seek to tie U.S. drug prices to the lowest prices paid by other developed nations. If implemented, MFN pricing could significantly reduce the prices we are able to charge for our products in the U.S. market, which could have a material adverse effect on our revenues and results of operations. Additionally, based on a Commerce Department investigation into national security risks arising from reliance on foreign-manufactured drugs, the administration is applying Section 232 of the Trade Expansion Act of 1962 to impose tariffs on pharmaceutical imports beginning in 2026. These tariffs could increase our cost of goods and disrupt our supply chain. We are continuing to monitor these developments and assess their potential impact on our business, financial condition, and results of operations.
Management's Discussion & Analysis (MD&A)
New heading “General and Administrative Expenses”
New heading “Salaries and Wages”
New heading “Sales and Marketing Expenses”
New heading “Research and Development Costs”
New heading “Depreciation and Amortization”
New heading “Impairment Charges”
New heading “Loss from Operations”
New heading “Non-Cash Interest Expense”
New heading “Change in Fair Value of Derivative Liability”
New heading “Gain/(Loss) on Digital Assets”
New heading “Change in Fair Value of Convertible Notes”
New heading “Working Capital”
Largest changes
“Management’s plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. The exclusive distribution agreement signed for its Sky Premium Life products in the United Arab Emirates (“UAE”) and the significant orders already received, are expected to substantially strengthen its operating cash flow. Furthermore, the Company intends to vertically integrate the supply chain distribution network. …”see in full comparison
“As of December 31, 2025, the Company was in compliance with all financial and non-financial covenants under its outstanding debt agreements, including but not limited to all notes payable, credit facilities, and other borrowing arrangements. There were no events of default, nor any conditions or events that, with the passage of time or the giving of notice, would reasonably be expected to constitute an event of default, with respect to any of the Company's debt obligations as of such date.”see in full comparison
“The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the year ended period December 31, 2024, the Company had revenue of $54,426,402, net loss of $16,183,018 and net cash used in operations of $7,717,034. Additionally, as of December 31, 2024, the Company had negative working capital of $296,193, an accumulated deficit of $114,022,275, and stockholders’ equity of $24,532,929. …”see in full comparison
“However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.”see in full comparison
“As of December 31, 2024, the Company had net cash of $315,105, compared to net cash of $3,833,195 as of December 31, 2023. The decrease in net cash is primarily due to the operating cash outflows during the period, reflecting the Company's ongoing investment in key operational activities. For the year ended December 31, 2024, the Company used net cash of $7,717,034 in operating activities, compared to net cash used of $15,635,999 for the year ended December 31, 2023. …”see in full comparison
Full comparison: every changed paragraph (109)
As used in this prospectus, the terms “we,” “us” “our” “Cosmos”, “Cosmo Health” and the “Company” mean Cosmos Health Inc. unless the context requires otherwise. The following discussion and analysis should be read in conjunction with our audited (and unaudited) financial statements and the related notes that appear elsewhere in this prospectus. All dollar amounts in this registration statement refer to U.S. dollars unless otherwise indicated.
We have created and developed our own proprietary branded nutraceutical products, named “Sky Premium Life®” which was launched in 2018 and “Mediterranation®” which was launched in 2022. Utilizing unique formulations, and specialized extraction processes which follow strict pharmaceutical standards, our proprietary lines of nutraceuticals aim for excellence. We have a full portfolio of fast-moving and specialty formulas with more than 160 product codes including vitamins, minerals and other herbal extracts. Our nutraceutical products are manufactured exclusively by Doc Pharma. Our nutraceutical products have penetrated several markets within 2022 and 2023 through digital channels such as Amazon and Tmall. We focus on nutraceutical products because we foresee it as a market with high growth opportunities due to its large market size and margin contribution as the demand for nutraceutical products is increasing globally.
For the 12-monthtwelve-month period ended December 31, 2024,2025, the Company’sCompany's total revenue increased by 1.97%,19.9%, reaching $54,426,402,$65,271,815, compared to $53,376,874$54,426,402 for the prior year period ended December 31, 2023.2024. This growth was primarily driven by the following factors:
The combination of these factors contributed to the overall revenue growth for the period.
The combination of these factors contributed to the overall revenue growth for the period. Our future revenue growth will continue to be affected by various factors such as industry growth trends, including drug utilization, the introduction of new innovative brand therapies, the likely increase in the number of generic drugs that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs,manufacturers, price increases and price deflation, general economic conditions in the member states of the European Union, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third partythird-party reimbursement rates to our customers, and changes in government rules and regulations.
While COGS increased in absolute terms, it grew at a slower pace than revenue (14.5% vs. 19.9%), reflecting a favourable shift in our revenue mix. Specifically, our higher-margin business lines — pharmaceutical manufacturing through CANA S.A. and own-branded nutraceutical sales through Decahedron Ltd. (UK) and SkyPharm S.A. (Greece) — grew at a faster rate than our wholesale operations during the period. This mix shift contributed to meaningful gross margin expansion, with gross margin improving to 12.1% for the year ended December 31, 2025, compared to 7.9% for the year ended December 31, 2024.
Our wholesale subsidiary, Cosmofarm S.A., continues to represent approximately 90% of total revenues and COGS. While wholesale operations are characterized by lower gross margins relative to our manufacturing and own-branded segments, the strong volume growth at Cosmofarm S.A. remains a critical driver of overall revenue scale. As our manufacturing and own-branded nutraceutical segments continue to grow as a proportion of total revenues, we expect this favourable mix shift to continue to positively impact our consolidated gross margins over time.
The increase in COGS was proportionate to revenue growth and was primarily influenced by a shift in revenue mix, with a larger portion of total revenue derived from our wholesale segment. Historically, our wholesale operations generate lower gross margins compared to other revenue streams, contributing to the overall increase in COGS as a percentage of revenue.
For the year ended December 31, 2024,2025, our gross profit was $4,311,323,$7,895,575, representing aan decreaseincrease of $38,246,$3,584,252, or 0.88%,83.1%, compared to $4,349,569$4,311,323 for the prior fiscal year ended December 31, 2023.2024.
The significant improvement in gross profit was primarily attributable to revenue growing at a faster pace than COGS (19.9% vs. 14.5%), driven by a favourable shift in our revenue mix toward higher-margin business lines. Our pharmaceutical manufacturing subsidiary, CANA S.A., and our own-branded nutraceutical operations conducted through Decahedron Ltd. (UK) and Skypharm S.A. (Greece), grew disproportionately faster than our wholesale segment during the period, contributing to meaningful margin expansion. As a result, gross margin improved to 12.1% for the year ended December 31, 2025, compared to 7.9% for the year ended December 31, 2024.
The change in gross profit was primarily attributable to the differing year-over-year growth rates of revenue and cost of goods sold (COGS). While revenue increased compared to the prior-year period, COGS grew at a comparatively higher rate, resulting in a contraction of gross profit.
For the year ended December 31, 2024,2025, total operating expenses were $19,856,153,$24,599,179, compared to $26,180,786$19,856,153 for the prior fiscal year ended December 31, 2023,2024, representing aan decreaseincrease of $6,324,633,$4,743,026, or 24.16%.23.9%. The decreasechange in operating expenses was primarily attributable to the following factors:
General and Administrative Expenses
General and administrative expenses increased by $3,885,923, or 33.1%, to $15,619,160 for the year ended December 31, 2025, compared to $11,733,237 for the prior year. The increase was primarily driven by the following:
Salaries and Wages
Salaries and wages increased by $1,084,842, or 19.1%, to $6,778,278 for the year ended December 31, 2025, compared to $5,693,436 for the prior year. The increase was primarily driven by our pharmaceutical manufacturing subsidiary, CANA S.A., which continued to expand its workforce during the period — hiring both production personnel to strengthen manufacturing capacity and management personnel to support the subsidiary's ongoing growth phase.
Sales and Marketing Expenses
Sales and marketing expenses decreased by $204,729, or 57.7%, to $150,240 for the year ended December 31, 2025, compared to $354,969 for the prior year. The decline reflects a strategic reduction in promotional investment related to the Company's own-branded nutraceutical products during the period.
Research and Development Costs
Research and development costs remained relatively stable at $519,363 for the year ended December 31, 2025, compared to $533,293 for the prior year, a decrease of $13,930, or 2.6%, as no new R&D agreements were entered into during 2025.
Depreciation and Amortization
Depreciation and amortization expense was $1,369,353 for the year ended December 31, 2025, compared to $1,249,238 for the prior year, an increase of $120,115, or 9.6%, remaining broadly consistent with the prior year level.
Impairment Charges
For the year ended December 31, 2025, the Company recorded total impairment charges of $162,785, compared to $291,980 for the prior year. The current year charges related to the following:
Loss from Operations
Despite the overall decline in operating expenses, certain cost categories increased:
As a result of thesethe expense changes,foregoing, our netloss operatingfrom lossoperations for the year ended December 31, 20242025 was $15,544,830,$16,703,604, representing an improvementincrease of $6,286,387$1,158,774, (28.8%)or 7.5%, compared to a netloss operatingfrom lossoperations of $21,831,217$15,544,830 for the year ended December 31, 2023.2024.
For the year ended December 31, 2024,2025, the Company reportedrecorded other incomeexpense, net of $86,737,$233,443, compared to other expenseincome, net of $65,867$86,737 for the year ended December 31, 2023. This represents a net favorable variance of $152,604, or 231.69% year-over-year improvement.2024.
The increasecurrent year expense of $233,443 primarily relates to prior period expense adjustments recorded by our subsidiaries Cosmofarm S.A. and SkyPharm S.A. The prior year other income of $86,737 was primarily attributable to the reversal of a previously recorded adjustment related to the cumulative impact of discounted sales to Medihelm SA,S.A., the exclusive distributor of the Company’sCompany's proprietary line of nutraceutical products.products, Duringwhich 2023,management determined was no longer required given the Companysignificant hadallowance adoptedalready arecorded conservative accounting approach to reflectand the lowlimited collectabilitylevel riskof associatednew sales activity with historical sales to Medihelm andduring hadthat therefore recognized a corresponding expense.period.
In 2024, however, due to the significant allowance already recorded in 2023 and the limited level of new sales activity with Medihelm during the current year, management determined that this adjustment was no longer required. As such, the Company reversed the previously recorded charge, resulting in an increase to other income.
For additional details, refer to Note 2 – Summary of Significant Accounting Policies, under the “Revenue Recognition” section of the accompanying consolidated financial statements.
For the year ended December 31, 2024,2025, interest expense totalled $1,012,314,$1,899,872, representing an increase of $145,838,$887,558, or 16.83%,87.7%, compared to $866,476$1,012,314 for the prior year ended December 31, 2023.2024. The increase was primarily driven by new debt facilities totallingentered $828,080,into during 2025, specifically: (i) a bond loan facility with CrediaBank S.A. (formerly Attica Bank S.A., renamed following its merger with Pancreta Bank in 2025) entered into by our subsidiarywholesale subsidiary, Cosmofarm SA.S.A.; and (ii) the convertible note facilities entered into by Cosmos Health Inc. at the parent company level. For further details on the convertible notes, refer to Note 12 — Convertible Debt in the accompanying consolidated financial statements.
Interest income for the year ended December 31, 2024,2025 was $406,449,$396,413, reflectingremaining arelatively decrease of $256,410, or 38.68%,stable compared to $662,859$406,449 for the prior year ended December 31, 2023.2024, Thisa decrease of $10,036, or 2.5%. The modest decline was primarily due toreflects the receiptordinary repayment of loan repayments during 2024, which reduced outstandingexisting loan receivable balances and,during consequently,the period, with no new loan agreements entered into, and consequently a slight reduction in outstanding balances generating interest earned on them and the absence of interest income from treasury bills, which contributed approximately $55,000 to interest income in 2023 but were not in place during 2024.income.
For the year ended December 31, 2025, the Company recognized a gain on extinguishment of debt of $68,610, with no comparable amount in the prior year. The gain arose from the debt exchange of the outstanding balance owed under the Promissory Note related to the acquisition of Cloudscreen, an AI-powered drug repurposing platform acquired on January 23, 2024. During 2025, the Company repaid $22,421 of the outstanding balance and converted the remaining balance of $293,400 into shares of common stock pursuant to a debt exchange agreement. The gain represents the difference between the carrying value of the extinguished debt and the fair value of the shares issued in settlement, reflecting the conversion price of $0.65 per share agreed under the exchange agreement compared to the market price of $0.498 per share on the date of the exchange.
Non-Cash Interest Expense
For the year ended December 31, 2025, the Company recorded non-cash interest expense of $722,763, with no comparable amount in the prior year. This amount represents the amortization of debt discounts recorded in connection with the convertible note facilities entered into by the Company during 2025, including the debt discount attributable to the bifurcated derivative liability recognized at issuance. This is a non-cash charge with no impact on the Company's operating cash flows.
Change in Fair Value of Derivative Liability
For the year ended December 31, 2025, the Company recorded a gain on the change in fair value of its derivative liability of $1,525,020, with no comparable amount in the prior year. The derivative liability relates to embedded derivatives identified within the convertible note agreement entered into with ATW Partners in August 2025. The gain reflects the favourable mark-to-market remeasurement of these embedded derivatives as of December 31, 2025. Given that the full-year gain of $1,525,020 compares to a gain of $311,778 recorded through September 30, 2025, the favourable movement accelerated significantly in the fourth quarter of 2025, primarily reflecting changes in the Company's stock price and other valuation inputs used in the fair value measurement.
Gain/(Loss) on Digital Assets
For the year ended December 31, 2025, the Company recorded a net loss on digital assets of $588,916, with no comparable amount in the prior year. During 2025, the Company invested approximately $2,000,000 in digital assets, primarily Ethereum (ETH). The loss reflects the net change in fair value of the Company's digital asset holdings during the period. This item is non-cash in nature to the extent it relates to unrealized fair value movements, and is presented separately given the growing significance of the Company's digital asset strategy.
Change in Fair Value of Convertible Notes
For the year ended December 31, 2025, the Company recorded a loss on the change in fair value of its convertible notes of $1,347,658, with no comparable amount in the prior year. The Company elected the fair value option for its convertible notes issued during 2025, and accordingly remeasures these instruments at fair value at each reporting date with changes recognized in the consolidated statements of operations. The loss reflects the mark-to-market remeasurement of the convertible instruments issued in the second and third quarters of 2025 through the December 31, 2025 measurement date. Given that the loss through September 30, 2025 was $2,317,631, the full-year loss of $1,347,658 reflects a favourable reversal in the fourth quarter of 2025, primarily driven by changes in the Company's stock price and other inputs used in the valuation model.
For the year ended December 31, 2024, we did not recognize any gains on debt extinguishment.
For the year ended December 31, 2023, we recorded a gain on extinguishment of debt of $1,910,967, which was primarily attributable to an $1,605,499 gain from the termination of our agreement with Marathon Global Inc., which resulted in the write-off of the share-settled debt obligation outstanding as of December 31, 2022 and a $305,468 gain from the forgiveness of debt related to the Synthesis Structured debt facility of our subsidiary SkyPharm SA.
On June 30, 2023, the Company completed the acquisition of CANA. As a result of the acquisition, we recognized a bargain purchase gain of $1,440,249, which arose because the fair value of CANA’s net assets at the acquisition date exceeded the total fair value of the consideration transferred.
The bargain purchase gain was recognized as other income in the Consolidated Statements of Operations for the year ended December 31, 2023. Management determined that the gain resulted primarily from negotiated purchase terms and the specific financial condition of the seller at the time of the transaction.
As no similar transactions occurred during the year ended December 31, 2024, no such gains were recognized in the current period.
For the year ended December 31, 2025, the Company recorded a total comprehensive loss of $16,678,564, compared to a total comprehensive loss of $24,093,129 for the year ended December 31, 2024. The improvement was primarily attributable to the following factors:
For the year ended December 31, 2024, the Company recorded a net comprehensive loss of $24,093,129, compared to a net comprehensive loss of $25,071,043 for the year ended December 31, 2023. This change in net comprehensive loss was primarily due to the unrealized foreign currency translation loss and a change in deemed dividends, as detailed below:
The significantcombination fluctuation inof the unrealizedabove factors, most notably the elimination of deemed dividends and the favorable foreign currency resultstranslation wasswing, drove the primaryoverall factor influencing the differenceimprovement in total comprehensive loss between the two years.year-over-year. For a comprehensive understanding of the key accounting policies and assumptions underlying these changes, readers are encouraged to review the relevant Notes to the Financial Statements,Statements as indicated above.
The Company's consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which contemplates the continuation of the Company as a going concern.
For the year ended December 31, 2025, the Company had revenue of $65,271,815, a net loss of $19,144,998, and net cash used in operations of $8,447,614. Additionally, as of December 31, 2025, the Company had cash and cash equivalents of $715,674 and restricted cash of $2,744,219, the latter designated for the purchase of digital assets (Ethereum) pursuant to the Convertible Note Agreement dated August 5, 2025. The Company had positive working capital of $116,412, an accumulated deficit of $133,167,273, and stockholders' equity of $18,424,629.
The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the year ended period December 31, 2024, the Company had revenue of $54,426,402, net loss of $16,183,018 and net cash used in operations of $7,717,034. Additionally, as of December 31, 2024, the Company had negative working capital of $296,193, an accumulated deficit of $114,022,275, and stockholders’ equity of $24,532,929. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing.
The Company’sCompany's revenues are not able to sustain its operations, and concerns exist regarding the Company’sCompany's ability to meet its obligations as they become due. The Company is subject to a number of risks similar to those of smaller commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the need to obtain additional capital, competition from larger companies, and other pharmaceutical and health care companies.
Management evaluated the above conditions which raise substantial doubt about the Company’sCompany's ability to continue as a going concern to determine if it can meet its obligations for the subsequent 12 months from the date of this filing. Management considered its ability to access future capital, curtail expenses if needed, expand product lines, and acquire new products. Management's plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. The exclusive distribution agreement signed for its Sky Premium Life products in the United Arab Emirates ("UAE") and the significant orders already received are expected to substantially strengthen its operating cash flow. Furthermore, the Company intends to vertically integrate its supply chain distribution network.
With respect to capital markets activities, the Company has undertaken and intends to continue pursuing the following initiatives:
Management's plans also include postponing certain debt repayments through achieving favourable amendments to its debt facilities and making substantial efforts to secure additional debt financing. Additionally, the Company's management is considering postponing certain repayments to suppliers and creditors as necessary.
However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.
Management’s plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. The exclusive distribution agreement signed for its Sky Premium Life products in the United Arab Emirates (“UAE”) and the significant orders already received, are expected to substantially strengthen its operating cash flow. Furthermore, the Company intends to vertically integrate the supply chain distribution network. On top of that, the Company plans to access the capital markets further in order to raise additional funds through equity offerings. More specifically, commencing from August 2025, the Company will be eligible to utilize an S-3 registration statement, (12 months following the date that the Company had regained compliance with Listing Rule 5250(c)(1) (the “Filing Rule”)), to be in a position to raise equity capital more efficiently in conjunction with utilizing potential equity proceeds by its outstanding warrants. Management’s plans also include postponing certain debt repayments, through achieving favorable amendments to its debt facilities and in parallel intends to make substantial efforts to receive additional debt financing. Moreover, the Company’s management is considering of postponing certain repayments of suppliers and creditors. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.
Working Capital
What changed in the latest 10-Q
Risk Factors
The Company is not required to provide the information called for in this item due to its status as a Smaller Reporting Company. You should refer to the other information set forth in this report, including the information set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our condensed consolidated financial statements and the related notes. Our business prospects, financial condition or results of operations could be adversely affected by any of these risks.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Supplemental Impact of Medihelm Revenue Reversal (Unaudited) - (6 Months)”
Largest changes
“Supplemental Impact of Medihelm Revenue Reversal (Unaudited) - (6 Months)”see in full comparison
From a financing perspective, during the three-month period endedsee in full comparisonMarchJune31,30, 2026, the Company raised capital through its At-the-Market (“ATM”) program, generating gross proceeds of approximately$1,832,524,$2,941,760, which enhanced its liquidity position. In addition, on August 5, 2025, the Company entered into a Securities Purchase Agreement for the issuance of up to $300 million of senior secured convertible promissory notes, with an initial $8 million closing completed on August 6, 2025, and potential additional tranches subject to certain conditions; this agreement remains in effect. The Company may also enter into new convertible financing arrangements and intends to continue and potentially expand its ATM program to support future liquidity needs.Moreover, on November 7, 2025, the Company filed a shelf Registration Statement on Form S-3 (File No. 333-286550) with the Securities and Exchange Commission to register up to $200.0 million of securities, including common stock, preferred stock, warrants, units, and subscription rights, for potential future capital raising activities. The filing also served as a replacement registration statement pursuant to Rule 415(a)(6) under the Securities Act for previously unsold securities registered under the prior Registration Statement on Form S-3 (File No. 333-267550). As of the filing date of these unaudited condensed consolidated financial statements, the registration statement has not yet been declared effective by the SEC.
“Our other operating subsidiary, SkyPharm SA continued to expand the distribution of its proprietary nutraceutical brand, Sky Premium Life ("SPL"), in the United Arab Emirates, Cyprus, and Greece, achieving strong growth across export channels. However, its revenue growth was partially impacted by revenue reversals related to Medihelm, as discussed in Note 2, Revenue Recognition. Due to the limited collectability history with this customer, the Company recorded revenue reversals for amounts not collected during the period in accordance with the variable consideration constraint under ASC 606. …”see in full comparison
see in full comparisonForRevenue for the three months endedMarchJune31,30,2026,2026theincreasedCompanybyreportedapproximatelyrevenue of $17,927,892 and a net loss of $2,805,423,28.8% compared torevenue of $13,712,528 and a net loss of $818,097 forthecorrespondingsame period in 2025.Revenue forFor thethree-monthsix months ended June 30, 2026, revenue increased by approximately 29.7% compared to the same periodincreasedin30.7% year-over-year,2025, primarily driven by higher sales generated by our wholly ownedsubsidiariessubsidiaries,SkyPharmDecahedronS.A.,Ltd, CosmofarmS.A.S.A., and Cana S.A.SkyPharmDecahedroncontinuedLtd, our U.K. wholesale subsidiary, nearly doubled its revenue compared toexpandthedistributionsame period in 2025, driven by increased sales ofitstheproprietaryCompany's nutraceuticalbrand Sky Premium Life ("SPL") in the United Arab Emirates, Cyprus,andGreece,pharmaceuticalachieving strong growth across export channels.products. Cana, our pharmaceutical manufacturing subsidiary, further expanded its contract manufacturing agreements and renewed existing customer relationships, resulting in a materialupliftincrease in revenue. Additionally, our wholesale subsidiary, Cosmofarm S.A., was theprimarykeydrivercontributorofto revenue growth, havingsignificantlyexpanded its client portfoliowithbyapproximatelyadding more than 75 new pharmacies during the period, reflectingconsistentcontinued momentum across its growing customer base in nutraceutical and pharmaceutical distribution.
“Gross profit for the three months ended March 31, 2026 was $1,381,171, compared to $2,049,799 for the same period in 2025, representing a decline of approximately 32.6% despite the 30.7% increase in revenue. Gross margin compressed to approximately 7.7% from approximately 15.0% in the prior year period. …”see in full comparison
“For the six months ended June 30, 2026, gross profit was $2,892,833, a decrease of approximately 10.0% compared to $3,213,613 for the same period in 2025. Gross margin was approximately 7.8% for the six months ended June 30, 2026, compared to approximately 11.3% for the same period in 2025. The decrease in gross profit and gross margin for the six-month period was primarily attributable to the revenue reversal recognized in connection with Medihelm, as discussed in Note 2, Revenue Recognition. …”see in full comparison
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The following discussion should be read in conjunction with our interim Condensed Consolidated Financial Statements and the related notes and other financial information appearing elsewhere in this report as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Form 10-K for the year ended December 31, 2025 (“Form 10-K”) and this Quarterly Report on Form 10-Q for the quarter ended MarchJune 31,30, 2026.
For the three months ended June 30, 2026, the Company reported revenue of $18,986,376 and a net loss of $ 6,086,522, compared to revenue of $14,745,702 and a net loss of $2,828,068 for the corresponding period in 2025.
For the six months ended June 30, 2026, the Company reported revenue of $36,914,268 and a net loss of $8,891,945, compared to revenue of $28,458,230 and a net loss of $3,646,165 for the corresponding period in 2025.
ForRevenue for the three months ended MarchJune 31,30, 2026,2026 theincreased Companyby reportedapproximately revenue of $17,927,892 and a net loss of $2,805,423,28.8% compared to revenue of $13,712,528 and a net loss of $818,097 for the correspondingsame period in 2025. Revenue forFor the three-monthsix months ended June 30, 2026, revenue increased by approximately 29.7% compared to the same period increasedin 30.7% year-over-year,2025, primarily driven by higher sales generated by our wholly owned subsidiariessubsidiaries, SkyPharmDecahedron S.A.,Ltd, Cosmofarm S.A.S.A., and Cana S.A. SkyPharmDecahedron continuedLtd, our U.K. wholesale subsidiary, nearly doubled its revenue compared to expandthe distributionsame period in 2025, driven by increased sales of itsthe proprietaryCompany's nutraceutical brand Sky Premium Life ("SPL") in the United Arab Emirates, Cyprus, and Greece,pharmaceutical achieving strong growth across export channels.products. Cana, our pharmaceutical manufacturing subsidiary, further expanded its contract manufacturing agreements and renewed existing customer relationships, resulting in a material upliftincrease in revenue. Additionally, our wholesale subsidiary, Cosmofarm S.A., was the primarykey drivercontributor ofto revenue growth, having significantly expanded its client portfolio withby approximatelyadding more than 75 new pharmacies during the period, reflecting consistentcontinued momentum across its growing customer base in nutraceutical and pharmaceutical distribution.
Our other operating subsidiary, SkyPharm SA continued to expand the distribution of its proprietary nutraceutical brand, Sky Premium Life ("SPL"), in the United Arab Emirates, Cyprus, and Greece, achieving strong growth across export channels. However, its revenue growth was partially impacted by revenue reversals related to Medihelm, as discussed in Note 2, Revenue Recognition. Due to the limited collectability history with this customer, the Company recorded revenue reversals for amounts not collected during the period in accordance with the variable consideration constraint under ASC 606. As a result, reported SkyPharm revenue for the three and six months ended June 30, 2026 reflects the impact of these reversals. To provide additional transparency regarding the underlying performance of the business, the Company has included a supplemental table at the end of the revenue and gross profit analysis presenting revenue and gross profit excluding the impact of these reversals.
Net loss for the three months ended June 30, 2026 increased by approximately 115.2% (or $3,258,454) compared to the same period in 2025. For the six months ended June 30, 2026, net loss increased by approximately 143.9% (or $5,245,780) compared to the same period in 2025. The wider loss in both periods reflects several non-cash items recognized during the three months ended June 30, 2026, including a $401,413 non-cash interest expense on convertible notes, a $404,145 loss on digital assets, and a $2,384,374 charge from the change in fair value of convertible notes, partially offset by a $577,347 gain from the change in fair value of the derivative liability.
Gross profit for the three months ended March 31, 2026 was $1,381,171, compared to $2,049,799 for the same period in 2025, representing a decline of approximately 32.6% despite the 30.7% increase in revenue. Gross margin compressed to approximately 7.7% from approximately 15.0% in the prior year period. This compression reflects two principal factors: first, a higher proportion of revenue was derived from Cosmofarm S.A.'s wholesale distribution business, which operates at structurally lower gross margins relative to our nutraceutical and contract manufacturing segments; and second, $375,337 of nutraceutical revenue attributable to sales to Medihelm S.A. — a customer with a significant historical allowance — was reversed during the period, as the Company recognizes revenue from this customer only to the extent that cash is actually received.
The net loss increased $1,987,326 (approximately 243%) for the three-month period. The wider loss reflects the gross margin compression described above, as well as newly recognized non-cash charges, including:
partially offset by a $239,480 gain on the change in fair value of convertible notes and a $231,968 gain on the change in fair value of derivative liabilities.
For the three months ended June 30, 2026 and 2025, the Company reported cost of goods sold ("COGS") of $17,474,714 and $13,581,888, respectively, representing an increase of $3,892,826, or approximately 28.7%. For the six months ended June 30, 2026 and 2025, COGS was $34,021,435 and $25,244,617, respectively, representing an increase of $8,776,818, or approximately 34.8%. The increase in COGS was primarily attributable to higher sales volumes across the Company's wholesale, manufacturing, and proprietary nutraceutical businesses, particularly at Cosmofarm S.A., Decahedron Ltd, and CANA S.A. The increase in COGS generally reflects the higher level of business activity during the period and changes in product mix.
For the three months ended March 31, 2026 and 2025, the Company reported cost of goods sold ("COGS") of $16,546,721 and $11,662,729, respectively — an increase of $4,883,992 (approximately 41.9%). The growth in COGS is consistent with the significant increase in revenue over the period; however, because a higher proportion of revenue was derived from Cosmofarm S.A.'s wholesale distribution business, which carries structurally lower gross margins, COGS grew at a faster rate than revenue. This dynamic, combined with the reversal of $375,337 in nutraceutical revenue related to Medihelm S.A., resulted in gross margin compression to approximately 7.7% for the three months ended March 31, 2026, compared to approximately 15.0% for the same period in 2025.
For the three months ended June 30, 2026, the Company reported gross profit of $1,511,662, an increase of approximately 29.9% compared to $1,163,814 for the same period in 2025. Gross margin was approximately 8.0% for the three months ended June 30, 2026, compared to approximately 7.9% for the same period in 2025.
For the six months ended June 30, 2026, gross profit was $2,892,833, a decrease of approximately 10.0% compared to $3,213,613 for the same period in 2025. Gross margin was approximately 7.8% for the six months ended June 30, 2026, compared to approximately 11.3% for the same period in 2025. The decrease in gross profit and gross margin for the six-month period was primarily attributable to the revenue reversal recognized in connection with Medihelm, as discussed in Note 2, Revenue Recognition. Because the related cost of goods sold had previously been recognized, the revenue reversal reduced gross profit and gross margin for the period. Excluding the impact of this accounting adjustment, the Company's underlying gross profit and gross margin would have been higher, as reflected in the supplemental information below.
Supplemental Impact of Medihelm Revenue Reversal (Unaudited) - (6 Months)
For the three months ended March 31, 2026, gross profit was $1,381,171, compared to $2,049,799 for the same period in 2025, representing a decrease of $668,628 (approximately 32.6%). As discussed above, the decline in gross profit and the compression in gross margin to approximately 7.7% from approximately 15.0% in the prior year period reflect the shift in revenue mix toward wholesale distribution and the Medihelm S.A. revenue reversal.
For the three months ended MarchJune 31,30, 2026, total operating expenses were $3,565,350,$4,437,269, an increase of $682,406$628,136 (approximately 23.7%16.5%) compared to $2,882,944$3,809,133 for the same period in 2025. TheFor the six months ended June 30, 2026, total operating expenses were $8,002,619, an increase wasof primarily$1,310,542 driven(approximately by19.6%) highercompared personnelto costs$6,692,077 consistent withfor the Company'ssame operationalperiod expansion.in 2025.
Total other income (expense), net, amounted towas a loss of $621,244$3,160,915 for the three months ended MarchJune 31,30, 2026, compared to incomea loss of $15,048$182,749 for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, total other income (expense), net, was a loss of $3,782,159, compared to a loss of $167,701 for the same period in 2025. The adversewider movementloss in both periods is primarily explained by newthe non-cash financial items introduceddiscussed during 2025,above, as follows:
The overall decline in other income (expense) results primarily from the introduction of non-cash valuation and fair value remeasurement items which did not exist in the prior year period,period (including the $2,384,374 charge from the change in fair value of convertible notes), together with higher interest expense from new financing arrangements,expense, partially offset by the gains$577,347 gain on the change in fair value remeasurement of convertible notes andthe derivative liabilitiesliability noted above.
For the three months ended June 30, 2026, the Company recognized a foreign currency translation loss of $56,360, compared to a gain of $1,562,470 for the same period in 2025. For the six months ended June 30, 2026, the Company recognized a foreign currency translation loss of $351,421, compared to a gain of $2,593,738 for the same period in 2025.
ForThe translation losses during the three and six months ended MarchJune 31,30, 2026,2026 theprimarily Companyreflected recognizedfluctuations ain foreign currency translationexchange lossrates, ofincluding $295,061,changes compared to a gain of $1,031,268 forin the samerelative period in 2025. The current period loss reflects the strengtheningvalue of the U.S. dollar relative toagainst the euro during Q1 2026,euro, which reducedimpacted the USD-translated carrying valuevalues of the Company's European subsidiaries. The priorprior-year yeartranslation gaingains reflected the opposite dynamic,impact of exchange rate movements, as thechanges euro appreciated againstin the U.S.euro-to-U.S. dollar duringexchange Q1rate 2025, increasingincreased the USD value of Europeanthe netCompany's assetsforeign operations upon translation.
Quarter-to-quarterPeriod-to-period fluctuations in foreign currency translation gains and losses are driven by thechanges timing ofin period-end exchange rates, the relative strength of the U.S. dollar, and the composition of foreign-currency-denominated assets and liabilities across the Group, highlighting the Company's ongoing exposure to currency translation risk.
As of MarchJune 31,30, 2026 compared with December 31, 2025
As of MarchJune 31,30, 2026, the Company held total cash and restricted cash of $2,158,921,$2,445,168, compared to $3,459,893 at December 31, 2025, reflecting net cash outflows during the quartersix-month period ended June 30, 2026, primarily from operating and investing activities. Of the MarchJune 31,30, 2026 balance, $1,644,219$644,219 represents restricted cash specifically earmarked for the purchase of certain crypto assets in accordance with the convertible note agreement signed on August 5, 2025, with the remaining $514,702$1,800,949 representing unrestricted cash and cash equivalents.
Cash flows used in operating activities amounted to $1,067,066$2,785,320 for the threesix months ended MarchJune 31,30, 2026, compared to $186,316$1,396,236 for the same period in 2025. The outflow was driven primarily by the consolidated net loss of $2,805,423,$8,891,945, partially offset by non-cash adjustments including stock-based compensation of $535,786,$1,094,644, depreciation and amortization of $346,520,$694,053, non-cash financing expense of $448,697,$850,110, loss from the change in fair value of convertible notes of $2,144,894 and a loss on digital assets of $442,439,$846,584, partially offset by gains on the change in fair value of convertible notes and derivative liabilities of $239,480 and $231,968, respectively.$809,315. Working capital movements had a mixed impact, with reductionsan in accounts receivable and increasesincrease in other current liabilities providing a partial offsetsoffset to the net loss, while an increase in accounts receivable, a decrease in accounts payable and accrued expenses, and increases in prepaid expenses and related party prepayments represented additional cash outflows.
Investing activities during the threesix months ended MarchJune 31,30, 2026, resulted in a net cash outflow of $708,963,$594,358, primarily driven by the purchase of $1,100,000 in digital assets, partially offset by the return of $399,809$599,714 in advances previously made for a property acquisition. ExpendituresExpenditure on property and equipment and intangible assets were minimal during the period. Net cash usedprovided inby investing activities compared to $7,069 in the same period in 2025,2025 was $64,751, with the variance driven almost entirely by the digital asset purchase, which had no equivalent in the prior year period.
Financing activities generated net cash inflows of $347,627$2,136,372 for the threesix months ended MarchJune 31,30, 2026, compared to $560,862$2,165,227 for the same period in 2025. The Company actively managed its lines of credit during the period, drawing $7,972,951$17,045,999 and repaying $9,142,284,$17,232,393, reflecting ongoing oversight of short-term debt facilities. Proceeds from the issuance of common stock totallingtotaling $1,832,524$2,941,760 were related to sales conducted pursuant to the Company's at-the-market (ATM) equity program. Additionally, the Company received proceeds of $516,000 from the issuance of convertible notes entered into during April 2026. Financing cash outflows included payments of financing fees of $54,976,$129,253, repayments of notes payable of $258,640, and$488,859, payments of finance lease liabilities of $1,948.$3,885, and the repurchase of treasury stock totaling $512,997. No proceeds were received from convertible notes, new note payables,payables or related party loans during the period.
In summary, for the six months ended June 30, 2026, total cash and restricted cash decreased by $1,014,725, from $3,459,893 at December 31, 2025 to $2,445,168 at June 30, 2026, primarily reflecting net cash outflows from operating and investing activities, partially offset by financing inflows. Operating activities used $2,785,320 of cash, while investing activities resulted in a net outflow of $594,358, primarily due to the acquisition of digital assets, partially offset by the return of advances previously made for a property acquisition. Financing activities generated net cash inflows of $2,136,372, supported by ATM equity issuances, convertible note proceeds, and active management of the Company’s short-term debt facilities.
In summary, for the three months ended March 31, 2026, net cash decreased by $1,300,972 with operating and investing outflows exceeding financing inflows. Total cash and restricted cash at March 31, 2026 stood at $2,158,921, compared to $3,459,893 at December 31, 2025. The restricted cash balance of $1,644,219, earmarked for crypto purchases under the August 5, 2025 convertible note agreement, represents a planned and strategic deployment of funds. The Company continues to rely on a combination of lines of credit, ATM equity issuances, and convertible note financing to sustain working capital and fund its operational and strategic requirements.
The Company’sCompany's unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“"U.S. GAAP”"), which contemplates the continuation of the Company as a going concern. For the three-monthsix-month period ended MarchJune 31,30, 2026, the Company generated revenue of $17,927,892,$36,914,268, incurred a net loss of $2,805,423,$8,891,945, and used $1,067,067$2,785,320 of net cash in operating activities. As of MarchJune 31,30, 2026, the Company had cash and cash equivalents of $514,702$1,800,949 and restricted cash of $1,644,219,$644,219, compared to $715,674 and $2,744,219 as of December 31, 2025. The Company also had positive working capital of $2,812,487,$1,825,987, an accumulated deficit of $135,972,696,$142,059,218, and stockholders’stockholders' equity of $19,826,359.$20,674,483.
Management has evaluated these factors and its ability to meet obligations due within the next 12 months. Its plans include expanding the portfolio of brand‑ name and private‑ label products, launching new distribution channels, and increasing sales from recently secured agreements, such as the exclusive distribution of Sky Premium Life products in the United Arab Emirates (“UAE”). Significant purchase orders have already been received under this agreement and are expected to contribute to operating cash inflows in the near term. Moreover, the Company is planning to expand the customer base of its subsidiary, Cosmofarm S.A., which is expected to substantially increase its wholesale revenue stream. In addition, the Company’s manufacturing subsidiary, CANA S.A., which is already demonstrating improved revenue and gross profit, is planning to strengthen its existing contract manufacturing agreements and secure new ones.
From a financing perspective, during the three-month period ended MarchJune 31,30, 2026, the Company raised capital through its At-the-Market (“ATM”) program, generating gross proceeds of approximately $1,832,524,$2,941,760, which enhanced its liquidity position. In addition, on August 5, 2025, the Company entered into a Securities Purchase Agreement for the issuance of up to $300 million of senior secured convertible promissory notes, with an initial $8 million closing completed on August 6, 2025, and potential additional tranches subject to certain conditions; this agreement remains in effect. The Company may also enter into new convertible financing arrangements and intends to continue and potentially expand its ATM program to support future liquidity needs. Moreover, on November 7, 2025, the Company filed a shelf Registration Statement on Form S-3 (File No. 333-286550) with the Securities and Exchange Commission to register up to $200.0 million of securities, including common stock, preferred stock, warrants, units, and subscription rights, for potential future capital raising activities. The filing also served as a replacement registration statement pursuant to Rule 415(a)(6) under the Securities Act for previously unsold securities registered under the prior Registration Statement on Form S-3 (File No. 333-267550). As of the filing date of these unaudited condensed consolidated financial statements, the registration statement has not yet been declared effective by the SEC.
As noted above, the accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing to fund its operations and meet its obligations as they become due. Considering the Company’s significant net loss and negative operating cash flows for the reporting period, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.
During the three-month period ended MarchJune 31,30, 2026, we continued to execute on the core elements of our “Growth Strategy”, which remains as follows:
As of MarchJune 31,30, 2026, there were no off-balance sheet arrangements.
As of MarchJune 31,30, 2026, we had 49,867,75083,407,714 shares of our common stock issued, respectively,issued and 49,781,25380,671,717 shares outstanding. In addition, there were 39,816,91834,209,667 common shares issuable upon the conversion of our outstanding convertible notes and the exercise of our outstanding warrants.
COSM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 5 Form 4 filings (2 insiders, 5 trade dates, 2,204,138 shares, about $457.1K) and open-market sales in 0 filings. Net open-market shares: 2,204,138 (purchases minus sales); net value about $457.1K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-30 | Siokas Grigorios |
Open-market purchase | 349,825 | $0.20 | $70.0K |
| 2026-07-29 | Terzis Georgios |
Grant/award | 328,407 | $0.18 | $59.1K |
| 2026-07-29 | Siokas Grigorios |
Open-market purchase | 766,284 | $0.18 | $137.9K |
| 2026-06-16 | Terzis Georgios |
Open-market purchase | 168,135 | $0.25 | $42.0K |
| 2026-06-11 | Siokas Grigorios |
Open-market purchase | 218,447 | $0.21 | $45.9K |
| 2026-06-10 | Siokas Grigorios |
Open-market purchase | 701,447 | $0.23 | $161.3K |
| 2026-05-19 | Karkantzos Theodoros Christos |
Grant/award | 20,000 | $0.28 | $5.6K |
| 2026-05-19 | Hoidas John James |
Grant/award | 20,000 | $0.28 | $5.6K |
| 2026-05-19 | Demetriades Demetrios G. |
Grant/award | 20,000 | $0.28 | $5.6K |
| 2026-05-19 | Aslidis Anastasios |
Grant/award | 40,000 | $0.28 | $11.2K |
| 2026-05-19 | Bhutawala Suhel |
Grant/award | 20,000 | $0.28 | $5.6K |
| 2026-05-19 | Terzis Georgios |
Grant/award | 850,000 | $0.28 | $238.0K |
| 2026-05-19 | Siokas Grigorios |
Grant/award | 2,350,000 | $0.28 | $658.0K |
Well-known investors holding COSM (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 390,500 | $123.9K | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 40,306 | $12.8K | — | Sold out |