Cosmos Health (NASDAQ: COSM) grows revenue yet flags doubt about its future
Cosmos Health Inc. (COSM) reported higher sales but wider losses for the quarter and six months ended June 30, 2026. Revenue for the quarter rose to $18.99 million from $14.75 million, and six‑month revenue increased to $36.91 million from $28.46 million.
Despite this growth, the company posted a quarterly net loss of $6.09 million versus $2.83 million a year earlier, and a six‑month net loss of $8.89 million versus $3.65 million, driven by higher operating expenses and unfavorable fair‑value changes on convertible notes and digital assets. Operating cash outflow was $2.79 million for the six months.
At June 30, 2026, Cosmos had $2.45 million in cash and restricted cash, positive working capital of $1.83 million, total assets of $61.46 million, liabilities of $40.79 million, and stockholders’ equity of $20.67 million. Management disclosed that recurring losses, negative operating cash flows, and reliance on external financing raise substantial doubt about the company’s ability to continue as a going concern over the next 12 months. To support liquidity, Cosmos raised about $2.94 million via its at‑the‑market equity program, continued to utilize a $300 million senior secured convertible note facility, and authorized a $5 million share repurchase program, under which 2.65 million shares were bought for approximately $0.51 million.
Positive
- Revenue grew strongly, with Q2 2026 sales of $18.99 million up from $14.75 million, and six‑month revenue rising to $36.91 million from $28.46 million, reflecting expansion across the company’s nutraceutical and pharmaceutical distribution activities.
- Total liabilities declined from $47.05 million at December 31, 2025 to $40.79 million at June 30, 2026, while stockholders’ equity increased to $20.67 million, indicating some balance‑sheet strengthening despite ongoing losses.
Negative
- Cosmos reported a significantly larger six‑month net loss of $8.89 million versus $3.65 million a year earlier, with operating expenses and negative fair‑value movements more than offsetting revenue growth.
- The company used $2.79 million of cash in operating activities in the first half of 2026 and ended with only $2.45 million in cash and restricted cash, highlighting tight liquidity.
- Management concluded that recurring losses, negative cash flows, and dependence on external financing raise substantial doubt about Cosmos Health’s ability to continue as a going concern within one year.
- Customer‑credit issues persist, with an allowance for doubtful accounts of $29.84 million and a cumulative $1.57 million revenue reversal related to Medihelm as of June 30, 2026.
Filing Explained
At June 30, 80,671,217 shares were outstanding after substantial issuance, while 34,209,667 additional potential shares were excluded from diluted EPS.
Cosmos Health’s unaudited Form 10-Q reports the quarter ended
During the quarter, the company issued
It also issued 4,115,000 shares to employees, 1,500,000 to consultants, 919,893 to its chief executive officer and 168,135 to its chief financial officer to settle obligations, plus 300,000 shares as note-extension consideration.
The filing reports 83,407,714 shares issued and 80,671,217 outstanding at
Separately, 26,157,286 shares issuable upon convertible-debt conversion and 8,052,381 warrant shares were excluded from diluted EPS as anti-dilutive, so the filing identifies additional potential dilution without stating that those shares were issued.
Key Figures
Key Terms
going concern financial
At-the-Market (ATM) program financial
senior secured convertible promissory notes financial
derivative liability - convertible note financial
variable consideration constraint financial
digital assets financial
FAQ
How did Cosmos Health (COSM) perform financially in Q2 2026?
What were Cosmos Health (COSM)’s results for the first half of 2026?
What is the liquidity position of Cosmos Health (COSM) as of June 30, 2026?
Did Cosmos Health (COSM) disclose going concern risks in this 10-Q?
How is Cosmos Health (COSM) using equity and debt financing in 2026?
What is Cosmos Health (COSM)’s share count and buyback activity?
What issues does Cosmos Health (COSM) face with the customer Medihelm?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
For the transition period from __________ to __________
Commission file number:
(Exact name of registrant as specified in its charter) |
| ||
(State or other jurisdiction of Company or organization) |
| (I.R.S. Employer Identification No.) |
| ||
| ||
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number: (
Securities registered under Section 12(b) of the Exchange Act:
Title of each class |
| Name of each exchange on which registered |
The |
Securities registered under Section 12(g) of the Exchange Act:
Title of each class |
| Name of each exchange on which registered |
Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☐ | Smaller reporting company | ||
(Do not check if a smaller reporting company) | Emerging growth company | ||
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Applicable only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
TABLE OF CONTENTS
PART I | ||||
Item 1. | Condensed Consolidated Financial Statements (Unaudited). | 3 | ||
| ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 50 | ||
| ||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk. | 63 | ||
|
|
|
|
|
Item 4. | Controls and Procedures. |
| 63 |
|
| ||||
PART II | ||||
| ||||
Item 1. | Legal Proceedings. | 65 | ||
| ||||
Item 1A. | Risk Factors. | 65 | ||
| ||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 65 | ||
| ||||
Item 3. | Defaults Upon Senior Securities. | 65 | ||
Item 4. | Mine Safety Disclosures. | 65 | ||
Item 5. | Other Information. | 65 | ||
| ||||
Item 6. | Exhibits. | 66 | ||
| ||||
SIGNATURES |
| 67 | ||
| 2 |
| Table of Contents |
COSMOS HEALTH INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| June 30, 2026 (unaudited) |
|
| December 31, 2025 (audited) |
| ||
|
|
|
|
|
|
| ||
ASSETS |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
CURRENT ASSETS: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ |
|
| $ |
| ||
Restricted cash |
|
|
|
|
|
| ||
Accounts receivable, net |
|
|
|
|
|
| ||
Accounts receivable - related party |
|
|
|
|
|
| ||
Marketable securities |
|
|
|
|
|
| ||
Inventory |
|
|
|
|
|
| ||
Loans receivable |
|
|
|
|
|
| ||
Prepaid expenses and other current assets |
|
|
|
|
|
| ||
Prepaid expenses and other current assets - related party |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
|
|
|
| ||
Goodwill and intangible assets, net |
|
|
|
|
|
| ||
Digital assets |
|
|
|
|
|
| ||
Loans receivable - long term portion |
|
|
|
|
|
| ||
Operating lease right-of-use asset |
|
|
|
|
|
| ||
Financing lease right-of-use asset |
|
|
|
|
|
| ||
Advances for building's acquisition |
|
|
|
|
|
| ||
Other assets |
|
|
|
|
|
| ||
Other assets - related party |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
| $ |
|
| $ |
| ||
Accounts payable and accrued expenses - related party |
|
|
|
|
|
| ||
Accrued interest |
|
|
|
|
|
| ||
Lines of credit |
|
|
|
|
|
| ||
Notes payable |
|
|
|
|
|
| ||
Notes payable - related party |
|
|
|
|
|
| ||
Convertible notes payable |
|
|
|
|
|
| ||
Derivative liability - convertible note |
|
|
|
|
|
| ||
Operating lease liability, current portion |
|
|
|
|
|
| ||
Financing lease liability, current portion |
|
|
|
|
|
| ||
Other current liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Notes payable - long term portion |
|
|
|
|
|
| ||
Convertible notes payable - long term portion |
|
|
|
|
|
| ||
Operating lease liability, net of current portion |
|
|
|
|
|
| ||
Financing lease liability, net of current portion |
|
|
|
|
|
| ||
Other liabilities |
|
|
|
|
|
| ||
TOTAL LIABILITIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (see Note 14) |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
Common stock, $ |
|
|
|
|
|
| ||
Additional paid-in capital |
|
|
|
|
|
| ||
Treasury stock, at cost, |
|
| ( | ) |
|
| ( | ) |
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Accumulated other comprehensive income/(loss) |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
| Table of Contents |
COSMOS HEALTH INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
| Three Months Ended June 30, |
|
| Six months ended June 30, |
| ||||||||||
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
REVENUE |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS SOLD |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Salaries and wages |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales and marketing expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Research and development costs |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization expense |
|
|
|
|
|
|
|
|
|
|
|
| ||||
TOTAL OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Interest expense |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Interest income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gain on equity investments, net |
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||
Non-cash interest expense |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Change in fair value of derivative liability |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gain/(Loss) on digital assets |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
Change in fair value of convertible notes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Foreign currency transaction, net |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
TOTAL OTHER INCOME (EXPENSE), NET |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment, net |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE LOSS |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC NET LOSS PER SHARE |
|
| ( | ) |
| $ | ( | ) |
|
| ( | ) |
| $ | ( | ) |
DILUTED NET LOSS PER SHARE |
|
| ( | ) |
| $ | ( | ) |
|
| ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
| ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
| Table of Contents |
COSMOS HEALTH INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
| |||||||||||||||||
|
| Common Stock |
|
| Additional |
|
|
|
| Treasury Stock |
|
|
|
| Other |
|
| Total |
| |||||||||||||||||
|
| No. of |
|
| Paid-in |
|
| Subscription |
|
| No. of |
|
| Accumulated |
|
| Comprehensive |
|
| Stockholders' |
| |||||||||||||||
|
| Shares |
|
| Value |
|
| Capital |
|
| Receivable |
|
| Shares |
|
| Value |
|
| Deficit |
|
| Loss |
|
| Equity |
| |||||||||
Balance at January 1, 2025 |
|
|
|
|
|
|
| $ |
|
| $ | ( | ) |
|
|
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
| |||||
Foreign currency translation adjustment, net |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Stock-based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Shares issued pursuant to warrant exchange agreement |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Debt exchanges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Balance at March 31, 2025 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
|
|
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
| |||||
Foreign currency translation adjustment, net |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Common stock issued to consultant |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Stock-based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Common stock issued as commitment shares to convertible noteholder |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Debt exchanges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Balance at June 30, 2025 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
|
|
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
| ||||||
|
| Common Stock |
|
| Additional |
|
|
|
|
| Treasury Stock |
|
|
|
|
|
|
|
|
|
| |||||||||||||||
|
| No. of |
|
| Paid-in |
|
| Subscription |
|
| No. of |
|
| Accumulated |
|
| Comprehensive |
|
| Stockholders' |
| |||||||||||||||
|
| Shares |
|
| Value |
|
| Capital |
|
| Receivable |
|
| Shares |
|
| Value |
|
| Deficit |
|
| Loss |
|
| Equity |
| |||||||||
Balance at January 1, 2026 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
| |||||||
Foreign currency translation adjustment, net |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||||
Stock-based compensation - consultants |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Stock-based compensation - employees |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Shares issued in settlement of default interest on convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Debt exchanges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Proceeds from issuance of common stock, net of issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Conversion of convertible debt into common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Balance at March 31, 2026 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
| |||||||
Foreign currency translation adjustment, net |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||||
Stock-based compensation - consultants |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Stock-based compensation - employees |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Shares issued as note extension consideration |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Debt exchanges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Proceeds from issuance of common stock, net of issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Conversion of convertible debt into common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Treasury share repurchases |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||||||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Balance at June 30, 2026 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
| Table of Contents |
COSMOS HEALTH INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| Six Months Ended June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
Net Loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
|
|
|
| ||
Amortization of right-of-use assets |
|
|
|
|
|
| ||
Bad debt expense |
|
|
|
|
|
| ||
Change in fair value of derivative liability |
|
| ( | ) |
|
|
| |
Gain/(Loss) on crypto assets |
|
|
|
|
|
| ||
Lease expense |
|
|
|
|
|
| ||
Interest on finance leases |
|
|
|
|
|
| ||
Stock based compensation |
|
|
|
|
|
| ||
Deferred income taxes |
|
| ( | ) |
|
|
| |
Non-cash financing expense |
|
|
|
|
|
| ||
Change in fair value of convertible notes |
|
|
|
|
|
| ||
Gain on net change in fair value of equity investments |
|
|
|
|
| ( | ) | |
Interest on loan receivable |
|
|
|
|
|
| ||
Revenue reversals |
|
|
|
|
|
| ||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
| ( | ) |
|
| ( | ) |
Accounts receivable - related party |
|
| ( | ) |
|
| ( | ) |
Inventory |
|
|
|
|
| ( | ) | |
Prepaid expenses and other current assets |
|
| ( | ) |
|
| ( | ) |
Prepaid expenses and other current assets - related party |
|
| ( | ) |
|
| ( | ) |
Accounts payable and accrued expenses |
|
| ( | ) |
|
|
| |
Accounts payable and accrued expenses - related party |
|
|
|
|
|
| ||
Accrued interest |
|
|
|
|
|
| ||
Lease liabilities |
|
| ( | ) |
|
| ( | ) |
Other current liabilities |
|
|
|
|
|
| ||
Other liabilities |
|
| ( | ) |
|
| ( | ) |
NET CASH USED IN OPERATING ACTIVITIES |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from loan receivable |
|
|
|
|
|
| ||
Return of advances for acquisition of property |
|
|
|
|
|
| ||
Purchase of digital assets |
|
| ( | ) |
|
|
| |
Purchase of intangible assets |
|
| ( | ) |
|
| ( | ) |
Purchase of property and equipment |
|
| ( | ) |
|
| ( | ) |
NET CASH USED IN INVESTING ACTIVITIES |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from convertible note payable |
|
|
|
|
|
| ||
Payment of note payable |
|
| ( | ) |
|
| ( | ) |
Proceeds from note payable |
|
|
|
|
|
| ||
Payment of related party loan |
|
|
|
|
| ( | ) | |
Proceeds from related party loan |
|
|
|
|
|
| ||
Payment of lines of credit |
|
| ( | ) |
|
| ( | ) |
Proceeds from lines of credit |
|
|
|
|
|
| ||
Proceeds from the sale of common stock |
|
|
|
|
|
| ||
Purchase of treasury stock |
|
| ( | ) |
|
|
| |
Payments of financing fees |
|
| ( | ) |
|
| ( | ) |
Payments of finance lease liability |
|
| ( | ) |
|
| ( | ) |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
CASH AND RESTRCITED CASH AT BEGINNING OF PERIOD |
|
|
|
|
|
| ||
CASH AND RESTRICTED CASH AT END OF PERIOD |
| $ |
|
| $ |
| ||
Cash and Restricted Cash Reconciliation |
|
|
|
| ||||
|
|
|
|
| ||||
Description |
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Cash |
|
|
|
|
|
| ||
Restricted Cash |
|
|
|
|
|
| ||
Total Cash and Restricted Cash |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the year: |
|
|
|
|
|
|
|
|
Interest |
| $ |
|
| $ |
| ||
Income tax |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for convertible notes payable |
| $ |
|
| $ |
| ||
Common Stock issued in settlement of default interest on convertible notes |
| $ |
|
| $ |
| ||
Common stock issued in exchange for debt |
|
|
|
|
| $ |
| |
Debt exchanges |
| $ |
|
| $ |
| ||
Common stock issued to employees |
| $ |
|
| $ |
| ||
Common stock issued to consultants |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 1 – BASIS OF PRESENTATION
The terms “COSM,” “we,” the “Company,” the “Group” and “us” as used in this report refer to Cosmos Health Inc. The accompanying unaudited condensed consolidated balance sheet as of June 30, 2026 and unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2026 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of the management of COSM, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, or any other period. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the financial statements for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”). The accompanying condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes on the accompanying balance sheet.
Going Concern
The Company's unaudited 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 six-month period ended June 30, 2026, the Company generated revenue of $
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. While the Company’s revenues have grown, they remain insufficient to fund operating expenses and meet debt obligations as they become due. Furthermore, the Company remains dependent on external financing sources to sustain operations and fund growth initiatives.
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 six-month period ended June 30, 2026, the Company raised capital through its At-the-Market (“ATM”) program, generating gross proceeds of approximately $
The proceeds from the ATM sales provide additional working capital and mitigate, to some extent, the Company’s liquidity constraints.
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.
The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Such adjustments could include the realization of assets and settlement of liabilities at amounts that may differ materially from those reflected in the accompanying condensed consolidated financial statements.
| 7 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 2 – ORGANIZATION AND NATURE OF BUSINESS
Cosmos Health Inc. and its subsidiaries (Nasdaq: COSM), (“us”, “we”, the “Group”, or the “Company”) are an international healthcare group headquartered in Thessaloniki, Greece. The Group is engaged in the nutraceuticals sector through its own proprietary lines of products “Sky Premium Life” and “Mediterranation”. The Company is operating in the pharmaceutical sector as well, through the provision of a broad line of branded generics and OTC medications. In addition, the Group is involved in the healthcare distribution sector through its subsidiaries in Greece and the UK, serving retail pharmacies and wholesale distributors. The Company is strategically focusing on the research and development (“R&D”) of novel patented nutraceuticals and specialized root extracts, as well as on the R&D of proprietary complex generics and innovative OTC products. The Company has developed a global distribution platform and is currently expanding throughout Europe, Asia, the UAE and North America. The Company has offices and distribution centers in Thessaloniki and Athens, Greece and Harlow, UK.
The Company was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009. On November 14, 2013, we changed our name to Cosmos Holdings Inc., and on November 29, 2022, we changed our name to Cosmos Health Inc. Through its acquisition of Amplerissimo Ltd, on September 27, 2013, the Company changed its principal activities into trading of products, providing representation, and provision of consulting services to various sectors. On August 1, 2014, the Company formed SkyPharm S.A., a Greek Company (“SkyPharm”), a subsidiary that used to focus on the trading, sourcing and export of nutraceutical and pharmaceutical products. In February 2017, the Company acquired Decahedron Ltd., a UK Company (“Decahedron”) which is a fully licensed second-generation wholesaler specializing in imports and exports of generics and OTC pharmaceutical products within the EEA (European Economic Area) and distributor of Sky Premium Life nutraceutical products in the UK. On December 19, 2018, the Company acquired Cosmofarm S.A. (“Cosmofarm”), a pharmaceutical wholesaler specializing in the distribution and export of pharmaceutical products through its extensive pharmacies network. On April 3, 2023, the Company completed the acquisition of ZipDoctor Inc. (“ZipDoctor”), a telehealth company, a direct-to-consumer subscription-based telemedicine platform. On June 30, 2023, the Company acquired Laboratories Holdings (Cyprus) Limited (“Cana”), which wholly owned an operating subsidiary, Pharmaceutical Laboratories Cana S.A. (“Cana SA”), a Greek pharmaceutical company that manufactures, sells, distributes, and markets original branded products researched and developed by leading global pharmaceutical and healthcare companies.
Acquisition Accounting
Cloudscreen
On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition was pursuant to the purchase agreement announced on October 11, 2023. The total purchase price amounted to $637,080. The Company accounted for the acquisition as an asset acquisition in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, (“ASC 805”) and recorded $
ZipDoctor
On April 3, 2023, the Company completed the acquisition of ZipDoctor Inc. (“ZipDoctor”), a telehealth company for a total sum of $
During the year ended December 31, 2024, the Company recognized an impairment charge of $
| 8 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Bikas
On June 15, 2023, Cosmos Health Inc. entered into an Assignment and Assumption Agreement (the “Agreement”) with Ioannis Bikas O.E., a Greek Company (“Bikas”). Bikas is owner of a pharmaceutical distribution network in Greece and agreed to sell to the Company their distribution network and customer base. The purchase price of the network was €100,000 ($
Real Estate Acquisitions
On April 24, 2023, Cosmos Health Inc. purchased a building for a total purchase price of $
On January 6, 2023, the Company entered into an agreement to purchase land and a building located at 1570 rue Richardson, Montreal, Quebec, Canada from 4423607 Canada Inc. (the "Seller") for a total purchase price of $
As the parties were unable to progress toward completion of the transaction, the Company determined that recovery of the advances would occur through repayment rather than through closing of the purchase and sale. During the year ended December 31, 2025, management assessed the recoverability of these advances and recorded a provision of $
Subsequent to December 31, 2025, on March 17, 2026, the Seller provided a formal, signed repayment commitment letter confirming that the full outstanding balance of the advances will be repaid to the Company according to the following schedule:
| · | On or before April 10, 2026: USD $600,000 – received |
| · | On or before December 31, 2026: USD $600,000 – of which amount $100,000 were received as of the date of this report |
| · | On or before March 31, 2027: Remaining outstanding balance |
Cana
On June 30, 2023, the Company acquired Cana Laboratories Holding (Cyprus) Limited (“Cana”), which wholly owned an operating subsidiary, Pharmaceutical Laboratories Cana S.A. (“Cana SA”) for €800,000 ($
| 9 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
During the prior year period, Cana had minimal operations as it was in financial difficulties and seeking for an investor.
Basis of Financial Statement Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP.
Principles of Consolidation
Our consolidated accounts include our accounts and the accounts of our wholly owned subsidiaries, SkyPharm S.A., Decahedron Ltd., Cosmofarm S.A., Cana Laboratories Holdings (Cyprus) Limited and ZipDoctor Inc. The Group’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The unaudited condensed consolidated financial statements reflect the consolidation of all entities in which the Company has control, as determined by the ability to direct the activities that significantly affect the entities’ economic performance. All significant intercompany balances and transactions have been eliminated.
Transactions in and Translations of Foreign Currency
The functional currency for the Greek subsidiaries of the Company (CANA Laboratories, Cosmofarm S.A. and SkyPharm SA) is Euro (€) and for the UK subsidiary (Decahedron Ltd) is GBP (£). ZipDoctor Inc. is a U.S. based entity. As a result, the financial statements of the subsidiaries (except for ZipDoctor Inc.) have been translated from the local currency into U.S. dollars using (i) year-end exchange rates for balance sheet accounts, and (ii) average exchange rates for the reporting period for all income statements accounts. Foreign currency translations gains and losses are reported as a separate component of the unaudited condensed consolidated statements of changes in stockholders’ equity.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
| 10 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Credit Losses
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which amends the requirement on the measurement and recognition of expected credit losses for financial assets held. Furthermore, amendments ASU 2019-10 and ASU 2019-11 provided additional clarification for implementing ASU 2016-13. ASU 2016-13 is effective for the Company beginning January 1, 2023, with early adoption permitted. The Company adopted the standard on January 1, 2023, and the standard did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. The Company is exposed to credit losses primarily through sales to its customers and the loans that it has provided. The Company assesses each customer’s/ borrower’s ability to pay, and a credit loss estimate by conducting a credit review which includes consideration of established credit rating, or an internal assessment of the customer’s creditworthiness based on an analysis of their payment history when a credit rating is not available. The Company monitors credit exposure through active review of customer balances. In accordance with ASC 326 and the Current Expected Credit Loss (CECL) framework, the Company has elected to apply the practical expedient available for its trade receivables, which are short-term in nature and do not contain a significant financing component. The Company applies a loss-rate method for calculating expected credit losses (“ECL”) on accounts receivable, based on a combination of historical experience, industry data, and adjustments for current conditions and reasonable and supportable forecasts.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
The Company maintains bank accounts in the United States denominated in U.S. Dollars, in Greece denominated in Euros, U.S. Dollars and Great Britain Pounds (British Pounds Sterling), and in Bulgaria denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling).
Accounts Receivable, net
Accounts receivable are stated at their net realizable value. The allowance for doubtful accounts against gross accounts receivable, prepaid expenses and other current assets and other assets reflects the best estimate of probable losses inherent in the receivables’ portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of June 30, 2026 and December 31, 2025, the Company’s allowance for doubtful accounts was $
|
| June 30, 2026 |
| |
|
|
|
| |
Balance as of January 1, 2026 |
| $ |
| |
Provisions for credit losses |
|
|
| |
Write-offs |
|
|
| |
Foreign exchange adjustments |
|
| ( | ) |
Other adjustments |
|
|
| |
Balance as of June 30, 2026 |
| $ |
| |
Tax Receivables
The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. As of June 30, 2026 and December 31, 2025, the Company had a VAT net receivable balance of $
| 11 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Inventory
Inventory is stated at the lower-of-cost or net realizable value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e., packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment.
The Company writes down inventories to net realizable value based on physical condition, expiration date, and current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met. No significant judgments have been applied in estimating the selling price of our inventory.
Property and Equipment, net
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows:
| Estimated Useful Life | |||
Leasehold improvements and technical works |
| Lesser of lease term or | ||
Buildings |
|
|
| |
Vehicles |
| |||
Machinery |
| |||
Furniture, fixtures and equipment |
|
| ||
Computers and software |
|
Depreciation expense was $
Property and Equipment additions
Property and Equipment additions are recognized as assets when it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably. Additions are initially measured at cost, which includes all costs directly attributable to bringing the asset to its working condition and location for its intended use. This may include purchase price, freight, installation, and any directly attributable professional fees. They are capitalized if their cost exceeds a certain threshold. The threshold is determined based on materiality considerations. Costs below the threshold are typically expensed as incurred. After initial recognition, additions are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated systematically over the estimated useful life of the asset. They are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount exceeds the recoverable amount, an impairment loss is recognized, and the carrying amount of the asset is adjusted accordingly. Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, including Property and Equipment additions, are capitalized as part of the cost of those assets.
| 12 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Intangibles, net
Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of 5 years for an import/export license and a useful life of 10 years for the pharmaceutical and nutraceutical products licenses included in Note 5 as “Licenses”. A useful life of 10 years is also used for the platforms included in Note 5 as “Software” and the customer base. The Company evaluates the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the remaining amortization period. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. As of June 30, 2026 and December 31, 2025, no revision to the remaining amortization period of the intangible assets was made.
Amortization expense was $
Impairment of Long-Lived Assets
In accordance with ASC 360-10, Long-lived Assets, property and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. For the three months ended June 30, 2026, and 2025, the Company has recorded no impairment charge.
| 13 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Equity Method Investment
For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. The Company records its share in the earnings of the investee and is included in “Equity earnings of affiliate” in the unaudited condensed consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognizes an impairment loss to adjust the investment to its then current fair value.
Investments in Equity Securities
Investments in equity securities are accounted for at fair value with changes in fair value recognized in net income (loss). Equity securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Equity securities that are readily available for sale in current operations are reported as a component of current assets on the accompanying condensed consolidated balance sheets. Equity securities that are not considered available for use in current operations would be reported as a component of long-term assets on the accompanying condensed consolidated balance sheets. For equity securities with no readily determinable fair value, the Company elects a measurement alternative to fair value. Under this alternative, the Company measures the investments at cost, less any impairment, and adjusted for changes resulting from observable price changes in transactions for identical or similar investments of the investee. The election to use the measurement alternative is made for each eligible investment.
As of June 30, 2026, investments consisted of
Fair Value Measurement
The Company applies ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
In addition, ASC 825-10-25, Fair Value Option, (“ASC 825-10-25”), expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value.
| 14 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
The following tables presents assets and liabilities that are measured and recognized at fair value as of June 30, 2026 and 2025, on a recurring basis:
|
| June 30, 2026 |
|
| Total Carrying |
| ||||||||||
Assets |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Value |
| ||||
Marketable securities – National Bank of Greece |
| $ |
|
|
|
|
|
|
|
| $ |
| ||||
Digital assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
|
|
|
|
|
|
| $ |
| ||||
|
| June 30, 2026 |
|
| Total Carrying |
| ||||||||||
Liabilities |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Value |
| ||||
Convertible notes payable |
| $ |
|
|
|
|
|
|
|
| $ |
| ||||
Derivative liability - convertible note |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
|
|
|
|
|
|
| $ |
| ||||
|
| December 31, 2025 |
|
| Total Carrying |
| ||||||||||
Assets |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Value |
| ||||
Marketable securities – National Bank of Greece |
| $ |
|
|
|
|
|
|
|
| $ |
| ||||
Digital assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
|
|
|
|
|
| |
|
| $ |
| ||
|
| December 31, 2025 |
|
| Total Carrying |
| ||||||||||
Liabilities |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Value |
| ||||
Convertible notes payable |
| $ |
|
|
|
|
|
|
|
| $ |
| ||||
Derivative liability - convertible note |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
|
|
|
|
|
|
| $ |
| ||||
Digital assets consist of cryptocurrency holdings measured at fair value using quoted prices on active exchanges and are therefore classified as Level 1 (Note 17). For information regarding convertible notes and derivative liabilities measured at fair value, refer to Note 11 — Convertible Debt.
In addition, ASC 825-10-25, Fair Value Option ("ASC 825-10-25"), expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value option for any of its qualifying financial instruments other than as described in Note 11 — Convertible Debt.
Our financials also included the following financial instruments as of June 30, 2026 and December 31, 2025: cash, accounts receivable, inventory, prepaid expenses, loans receivable, accounts payable, notes payable and lines of credit. Except for the loans receivable which carry fixed interest rates, the carrying value of the remaining instruments, approximates fair value due to their short-term nature.
| 15 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Convertible Promissory Note
As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“ASC 825”), the Company elects to account for its convertible promissory note, which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value are recorded as a component of non-operating loss in the condensed consolidated statements of operations. This election is made on an instrument-by-instrument basis as permitted under ASC 825. The portion of total changes in fair value of the convertible promissory note attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income in the accompanying condensed Consolidated Statements of Operations and Comprehensive Income (Loss). As a result of electing the fair value option, direct costs and fees related to the convertible promissory note are expensed as incurred.
The Company estimates the fair value of the convertible promissory note using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration of the convertible promissory note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, we estimate our expected future volatility based on the actual volatility of our common stock and historical volatility of our common stock utilizing a lookback period consistent with the time to expiration. The time to expiration is based on the contractual maturity date, giving consideration to the voluntary, mandatory and potential accelerated redemption scenarios. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using Bloomberg's Default Risk function which uses our financial information to calculate a default risk specific to the Company.
Digital Assets
In December 2023, FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires certain crypto assets to be measured at fair value separately on the balance sheet with gains and losses from changes in the fair value reported as unrealized gains or losses in the condensed consolidated statement of income (loss) and comprehensive income (loss) each reporting period. ASU 2023-08 also enhances the other intangible asset disclosure requirements by requiring the name, cost basis, fair value, and number of units for each significant crypto asset holding. The Company adopted ASU 2023-08 during 2025 in conjunction with its initial acquisition of digital assets.
The Company's digital assets are initially recorded at cost and are subsequently measured at fair value as of each reporting period. The Company determines the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement, based on quoted prices in its principal market for Ethereum (Level 1). Changes in fair value are recognized as incurred in the Company's unaudited condensed consolidated statement of operations and comprehensive loss, as “Gain (loss) on digital assets,” within non-operating (income) and expenses, net.
Customer Advances
The Company receives prepayments from certain customers for pharmaceutical products prior to those customers taking possession of the Company’s products. The Company records these receipts as current liabilities until it has met all the criteria for recognition of revenue including passing control of the products to its customer, at such point, the Company will reduce the customer advances balance and credit the Company’s revenues.
| 16 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Revenue Recognition
In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company uses a five-step model for recognizing revenue by applying the following steps:
| 1) | Identification of the Contract: The Company identifies a contract with a customer when it enters into an agreement that creates enforceable rights and obligations. |
|
|
|
| 2) | Identification of Performance Obligations: The Company identifies distinct performance obligations within each contract, which represent promises to transfer goods or services to the customer. |
|
|
|
| 3) | Determination of Transaction Price: The Company determines the transaction price, which represents the amount of consideration to which it expects to be entitled in exchange for transferring promised goods or services to the customer, excluding any amounts collected on behalf of third parties. |
|
|
|
| 4) | Allocation of Transaction Price: The Company allocates the transaction price to each distinct performance obligation based on its standalone selling price. If the standalone selling price is not observable, the Company estimates it using an appropriate method. |
|
|
|
| 5) | Recognition of Revenue: Revenue is recognized when (or as) the Company satisfies a performance obligation by transferring a promised good or service to the customer. This typically occurs at a point in time or over time, depending on the nature of the performance obligation. |
Wholesale revenue and sales of own branded nutraceutical and pharmaceutical products
The Company has contracts or signed partnership forms (usual in the wholesale sector of the pharma industry) with its customers, stipulating the enforceable rights and obligations. The Company is responsible for transferring the goods to the customer’s location, which represents its sole performance obligation. Thus, the transaction price, which is predetermined in most of the products sold, is exclusively allocated to this performance obligation. Revenue is recognized at a single point in time, which is upon issuance of the corresponding sales invoice. The Company has assessed the impact of the items invoiced but not delivered to the customer’s location as of June 30, 2026 and 2025 and deemed that it had no material effect.
Pharma manufacturing
The Company has active contracts with its customers, stipulating the enforceable rights and obligations. The Company is responsible for the manufacturing and the packaging of specific products assigned by its customers, which represents its performance obligations to which the Company allocates the transaction price determined. The customers are responsible for providing the raw materials to the Company. Revenue is recognized over a period of time, which is during the production and packaging period of the respective products. As of June 30, 2026 and 2025 there were no products or batches of products for which the production or packaging phase was in progress.
Medihelm SA
Effective January 1, 2023, and pursuant to the distribution agreement with Medihelm SA ("Medihelm"), the exclusive distributor of the Company's proprietary line of nutraceutical products, the Company determined that the transaction price for sales to Medihelm includes variable consideration. In accordance with ASC 606, Revenue from Contracts with Customers, and specifically ASC 606-10-32-5, the Company applies the "expected value" method to estimate the transaction price, subject to the constraint on variable consideration. This approach was necessitated by the existence of significant overdue receivables from Medihelm, which raised substantial doubt regarding full collectability of the contractual amounts. The Company reassesses the collectability of receivables from the distributor at each reporting date and considers changes in facts and circumstances in determining the amount of revenue that should be constrained.
Based on this assessment, the Company deferred $367,000 of revenue related to sales to Medihelm during the year ended December 31, 2024. Due to significantly limited sales activity with Medihelm and the substantial allowance for doubtful accounts recorded in prior periods, the Company determined that the cumulative revenue constraint was no longer necessary and reversed the $
During 2025, Medihelm continued to represent a significant and concentrated trade receivable exposure for the Company across its subsidiaries SkyPharm S.A., Cosmofarm S.A., and Decahedron Ltd. Historical credit performance has been weak, with cumulative bad debt allowances recorded during 2023–2024 representing a substantial portion of the total historical gross exposure to the distributor. The commercial relationship with Medihelm encompasses multiple transaction streams, including sales of proprietary nutraceutical products through SkyPharm S.A., wholesale pharmaceutical sales through Cosmofarm S.A., and legacy receivables at Decahedron Ltd. arising from historical sales of personal protective equipment that predate 2020 and for which the underlying business relationship is no longer active.
| 17 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
During the year ended December 31, 2025, the Company generated approximately $
For the six months ended June 30, 2026, the Company generated revenue of $
Management will continue to monitor the customer's payment performance. If collection trends improve during 2026, any corresponding recovery will be recognized as increases to revenue in the period of collection.
Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin No. 107 (“SAB 107”) regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock-based compensation at fair value using the Black-Scholes Option Pricing Model.
The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU 2018-07, “Compensation-Stock Compensation-Improvements to Nonemployee Share-Based Payment Accounting.”
Income Taxes
The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company is liable for income taxes in Greece and the United Kingdom. The corporate income tax rate is
We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At June 30, 2026, we believe our United Kingdom and Greece deferred tax assets will not be realized, as such, we did not record a reversal on the full valuation approach we followed during the year ended December 31, 2025.
Leases
The Company accounts for leases in accordance with ASC 842. For all leases, the Company recognizes a right-of-use (ROU) asset and a lease liability on the balance sheet. The ROU asset represents the Company's right to use the underlying asset for the lease term, and the lease liability represents the obligation to make lease payments arising from the lease, both measured at the present value of future lease payments. Lease payments are recognized as an operating expense on a straight-line basis over the lease term. The interest on the lease liability and the amortization of the ROU asset are recognized separately in the income statement. Initial direct costs incurred by the Company in negotiating and securing leases are capitalized and amortized over the lease term on a straight-line basis. The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the average interest rate of our long-term debt on the date of inception.
| 18 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Retirement and Termination Benefits
Under Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s years of service and remuneration at the date of termination or retirement. If an employee remains with the Company until full retirement eligibility, the employee is entitled to a lump-sum equal to 40% of the compensation that would be payable upon termination on the same date.
The Company periodically evaluates the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefit obligations of its Greek subsidiaries.
During the year ended December 31, 2025, the Company engaged an actuarial expert and updated the liability based on a new actuarial valuation prepared in accordance with ASC 715, Compensation—Retirement Benefit. As a result, the Company recorded a retirement and termination benefits liability of $
No new actuarial valuation was obtained during the three and six months ended June 30, 2026, as management determined that no significant events or changes in underlying assumptions had occurred that would materially affect the obligation. As of June 30, 2026, the liability remained at $
Basic and Diluted Net Loss per Common Share
Basic income per share is calculated by dividing the income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method. In accordance with ASC 260, Earnings Per Share, the following tables reconcile basic shares outstanding to fully diluted shares outstanding for the three- and six-month periods ended June 30, 2026 and 2025.
|
| Three months ended, |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Weighted average number of common shares outstanding Basic |
|
|
|
|
|
| ||
Potentially dilutive common stock equivalents |
|
|
|
|
|
|
|
|
Weighted average number of common and equivalent shares outstanding – Diluted |
|
|
|
|
|
| ||
|
| Six months ended, |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Weighted average number of common shares outstanding Basic |
|
|
|
|
|
| ||
Potentially dilutive common stock equivalents |
|
|
|
|
|
| - |
|
Weighted average number of common and equivalent shares outstanding – Diluted |
|
|
|
|
|
| ||
The following table summarizes potential common shares that were excluded as their effect is anti-dilutive:
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Warrants |
|
|
|
|
|
| ||
Shares issuable upon conversion of convertible debt |
|
|
|
|
|
| ||
Total |
|
|
|
|
|
| ||
Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented.
| 19 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Recent Accounting Pronouncements
ASU 2025‑01 – Income Statement: Clarifying Effective Date of Expense Disaggregation (Subtopic 220‑40)
Issued January 7, 2025
This update clarifies that ASU 2024‑03’s requirement to disclose disaggregated expense categories applies for annual reporting periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. Public business entities may early adopt. Entities with non‑calendar year ends should note that interim adoption in early periods is not required under this clarification.
ASU 2025‑03 – Business Combinations: Identifying the Accounting Acquirer in a VIE Transaction (Topics 805 and 810)
Issued May 12, 2025
This update amends ASC 805 and ASC 810 to require entities to consider the ASC 805‑10‑55‑12 through 55‑15 factors when identifying the accounting acquirer in business combinations effected primarily via equity exchange—even when the acquiree qualifies as a variable interest entity (VIE). The amendment enhances comparability with voting interest entity combinations and may result in reverse-acquisition accounting in more cases. It is effective for fiscal years beginning after December 15, 2026, including interims, and must be applied prospectively to combinations after adoption. Early adoption is permitted.
ASU 2025-04, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer
Issued May 15, 2025
The FASB issued ASU 2025-04, clarifying the accounting for share-based non-cash consideration payable to a customer. The update revises the definition of a “performance condition”, eliminates the forfeitures-as-incurred election in this context, and clarifies the interaction with variable consideration under ASC 606. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods, with early adoption permitted. The Company is currently assessing the potential impact of this standard.
ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
Issued July 30, 2025
The FASB issued ASU 2025-05, introducing a practical expedient and policy election for estimating expected credit losses on current accounts receivable and contract assets arising from ASC 606 contracts. The amendments are effective for annual reporting periods beginning after December 15, 2025, including interim periods, with early adoption permitted. The Company has evaluated the effect of these amendments on its financial position, results of operations and cash flows and concluded that they do not have a material impact.
ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
Issued September 30, 2025
The FASB issued ASU 2025-06 to modernize the accounting for internal-use software costs and enhance related disclosure requirements. The amendments are effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.
ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract
Issued September 30, 2025
The FASB issued ASU 2025-07 to expand the derivatives scope exception for certain contracts and clarify the accounting for share-based noncash consideration received from customers in revenue contracts. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.
ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements
Issued November 24, 2025
The FASB issued ASU 2025-09 to simplify and clarify certain aspects of hedge accounting. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.
| 20 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities
Issued December 18, 2025
The FASB issued ASU 2025-10 to establish guidance for the recognition, measurement, presentation, and disclosure of government grants received by business entities. The amendments are effective for annual reporting periods beginning after December 15, 2028, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.
ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements
Issued December 18, 2025
The FASB issued ASU 2025-11 to clarify interim reporting disclosure requirements and improve the navigability of interim reporting guidance. The amendments are effective for interim reporting periods within fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.
NOTE 3 – EQUITY METHOD INVESTMENTS
CosmoFarmacy LP
In September 2019, the Company entered into an agreement with an unaffiliated third party to incorporate CosmoFarmacy L.P. for the purpose of providing strategic management consulting services and the retail trade of pharmaceutical products, and OTC to pharmacies. CosmoFarmacy was incorporated with a 30-year term through May 31, 2049. The unaffiliated third party is the general partner (the “GP”) of the limited partnership and is responsible for management and decision-making associated with CosmoFarmacy. The initial share capital was set to EUR 150,000 ($
NOTE 4 – PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following at June 30, 2026 and December 31, 2025:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
Land |
| $ |
|
|
|
| ||
Buildings and improvements |
|
|
|
|
|
| ||
Leasehold improvements |
|
|
|
|
|
| ||
Vehicles |
|
|
|
|
|
| ||
Furniture, fixtures and equipment |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Less: Accumulated depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
Total |
| $ |
|
|
|
| ||
| 21 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 5 – INTANGIBLE ASSETS
Goodwill and intangible, net assets consist of the following at June 30, 2026 and December 31, 2025:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
License |
| $ |
|
| $ |
| ||
Trade name / mark |
|
|
|
|
|
| ||
Customer base |
|
|
|
|
|
| ||
Software |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Less: Accumulated amortization & impairment |
|
|
|
|
|
|
|
|
License |
|
| ( | ) |
|
| ( | ) |
Trade name / mark |
|
| ( | ) |
|
| ( | ) |
Customer base |
|
| ( | ) |
|
| ( | ) |
Software |
|
| ( | ) |
|
| ( | ) |
Subtotal |
|
|
|
|
|
| ||
Goodwill |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
At June 30, 2026, the estimated aggregate amortization expense for intangible assets subject to amortization for each of the succeeding fiscal years is as follows:
Year |
| Amount |
| |
2027 |
| $ |
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
2031 |
|
|
| |
Thereafter |
|
|
| |
Total |
| $ |
| |
NOTE 6 – LOAN RECEIVABLE
On October 30, 2021, the Company entered into a ten-year loan agreement with Medihelm S.A. to formalize €4,284,521 ($
During the three-month and six-month periods ended June 30, 2026, the Company recognized interest income of €39,327 ($
| 22 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 7 – INCOME TAXES
The Company is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company had no U.S. taxable income for the three months ended June 30, 2026, and 2025.
The Company’s Greek subsidiaries are governed by the income tax laws of Greece. The corporate tax rate in Greece is
The Company’s United Kingdom subsidiaries are governed by the income tax laws of the United Kingdom. The corporate tax rate in the United Kingdom is
As of June 30, 2026, and 2025, the Company’s effective tax rate differs from the U.S. federal statutory tax rate primarily due to a valuation allowance recorded against net deferred tax assets in in the United States and the United Kingdom.
We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. As of June 30, 2026, and December 31, 2025, the Company has maintained a valuation allowance against all net deferred tax assets in the United States, Greece, and the UK.
For the three and six months ended June 30, 2026, and 2025, the Company has not recorded any tax benefits/expenses in any jurisdiction where it is subject to income tax.
NOTE 8 – CAPITAL STRUCTURE
On September 30, 2025, the Company amended its Articles of Incorporation to increase the number of authorized shares of capital stock of the Company to
Preferred Stock
The Company is authorized to issue
Treasury stock
As of June 30, 2026 and December 31, 2025, the Company held
On June 26, 2026, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of up to $
| 23 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Common Stock
The Company is authorized to issue
Issuance of Common Stock
At-the-Market Offering
During the three-month period ended June 30, 2026, the Company issued an aggregate of
During the three-month period ended March 31, 2026, the Company issued an aggregate of
Stock-Based Compensation
During the three-month period ended June 30, 2026, the Company issued an aggregate of
During the three-month period ended June 30, 2026, the Company entered into consulting agreements with three consultants and issued an aggregate of
Settlement of Related Party Obligations
During the three-month period ended March 31, 2026, the Company issued an aggregate of
During the three-month period ended June 30, 2026, the Company issued an aggregate of
Conversion of Convertible Notes
During the three-month period ended March 31, 2026, the Company issued an aggregate of
During the three-month period ended March 31, 2026, the Company issued an aggregate of
| 24 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
During the three-month period ended March 31, 2026, the Company issued an aggregate of
During the three-month period ended June 30, 2026, the Company issued an aggregate of
On June 9, 2026, the Company issued
Share Repurchase Program
During the three-month period ended June 30, 2026, the Company repurchased
2025 Issuances
During the period from September 22 to December 31, 2025, the Company issued an aggregate of
During the year ended December 31, 2025, the Company issued an aggregate of
On December 31, 2025, the Company issued
On December 30, 2025, the Company granted an aggregate of
| 25 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
During the period from November 24, 2025 through December 7, 2025, the Company issued an aggregate of 783,430 shares of its common stock upon the conversion of the Company’s May 2025 Convertible Promissory Notes (the “May 2025 Notes”), resulting in the full settlement of the notes. The conversions satisfied total obligations of $
On September 5, 2025, the Company entered into a marketing services agreement with a third-party advisor, pursuant to which it issued
On August 5, 2025, the Company issued an additional
On July 24, 2025, the Company entered into a marketing services agreement with a third-party advisor, pursuant to which it issued
On July 1, 2025, the Company entered into a consulting agreement with a third-party advisor, pursuant to which it issued
On June 9, 2025, in connection with the execution of a secured convertible loan agreement with an aggregate principal amount of $
On June 3, 2025 (the “Effective Date”), the Company issued
On September 26, 2024, the Company had entered into a Warrant Inducement Letter with an investor pursuant to which the Company issued
Warrant Classification
The Company determines the classification of its warrants upon issuance by identifying the instrument issued to determine if it is debt or equity classified. The Company determined its warrants meet the scope exception in ASC 815-10 and are equity classified because, (a) the warrant is indexed to the Company’s own stock, (b) require settlement in equity shares, and (c) the Company has enough authorized and unissued shares.
| 26 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 9 – RELATED PARTY TRANSACTIONS
Doc Pharma S.A.
Doc Pharma S.A. is considered a related party to the Company due to the fact that the CEO of Doc Pharma is the son of Grigorios Siokas, the Company’s CEO and principal shareholder, who also served as a principal of Doc Pharma S.A. in the past.
Prepaid expenses and other current assets – related party
As of June 30, 2026 and December 31, 2025, the Company had a prepaid balance of $
The significant outstanding amount in the prepaid balance primarily reflects high prepayments related to the increased demand for exports in the UAE and other related countries (refer to the “Distribution Agreements” section).
For the three-month period ended June 30, 2026 approximately $
Accounts payable and accrued expenses - related party
As of June 30, 2026 and December 31, 2025, the Company had an accounts payable balance to Doc Pharma of $
The remaining balance of Accounts Payable and Accrued Expenses – Related Party relates to compensation payable to management as further described in this related party disclosure (“Other Related Parties” section).
Accounts receivable - related party
Additionally, the Company had a receivable balance of $
The remaining balance of Accounts Receivable – Related Party relates to amounts due from Maria Kozari’s wholly owned pharmacy (Maria Kozari is the daughter of Panagiotis Kozaris, a former General Operational Manager and current employee of Cosmofarm S.A.), as further described in this related party disclosure.
Sales and Purchases
During the six months ended June 30, 2026 and 2025, the Company purchased products from Doc Pharma S.A in the amounts of $
During the six months ended June 30, 2026 and 2025, the Company sold products to Doc Pharma S.A. totaling $
Other Agreements
On October 10, 2020, the Company entered into a contract manufacturer outsourcing (“CMO”) agreement with Doc Pharma whereby Doc Pharma is responsible for the development and manufacturing of pharmaceutical products and nutritional supplements according to the Company’s specifications based on strict pharmaceutical standards and good manufacturing practice (“GMP”) protocols as the National Organization for Medicines of Greece requires. The Company has the exclusive ownership rights for trading and distribution of its own branded nutritional supplements named “Sky Premium Life®”. The duration of the agreement is for five years, however, either party may terminate the agreement at any time giving three-month advance notice. Doc Pharma is exclusively responsible for supplying the raw materials and packaging required to manufacture the final product. However, it is not responsible for potential delays that may arise, concerning their import. Doc Pharma is also obligated to store the raw and packaging materials. The delivery of raw and packaging materials should be purchased at least 30 and 25 days, respectively, before the delivery date of the final product. The Manufacturer solely delivers the finished product to the Company. There is a minimum order quantity (“MoQ”) of
| 27 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
For the six months ended June 30, 2026 and 2025, the Company has purchased $
For the three months ended June 30, 2026 and 2025, the Company has purchased $
On May 17, 2021, Doc Pharma and the Company entered into a Research and Development (“R&D”) agreement whereby Doc Pharma will be responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life®.
Purchase of branded pharmaceuticals
On June 28, 2023, the Company approved the purchase of five proprietary and innovative branded pharmaceuticals with significant market presence and material profit contribution from Zakalia Ltd., the parent company of Doc Pharma, for €1,800,000 ($
On December 29, 2023, the Company approved the purchase of an additional 19 generic licenses from Doc Pharma, with a total value of €3,200,000 ($
Loans receivable - related party
As of December 31, 2022, prepaid expenses due from Doc Pharma totaled €7,103,706 ($
During the year ended December 31, 2025, management assessed the recoverability of the outstanding loan balance in light of approximately 18 months of non-payment of both principal and interest. Given the prolonged arrears and the uncertainty surrounding the counterparty's ability to resume scheduled payments, the Company recorded a full allowance of $
As of June 30, 2026, there were no changes in relation to the loan receivable from Doc Pharma. The outstanding balance remains fully impaired following the allowance for expected credit losses recorded as of December 31, 2025. No additional repayments, interest receipts, or reversals of impairment were recognized during the three-month period ended June 30, 2026.
| 28 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Panagiotis Kozaris
Panagiotis Kozaris is considered a related party due to the fact that he is a former General operational manager and current employee of Cosmofarm S.A.
Prepaid Expenses and Other Current Assets - Related Party
From time to time, the Company repurchases shares owned by Panagiotis Kozaris and records them as treasury shares. The Company makes advance payments to Panagiotis Kozaris for these shares and receives the shares upon execution of a cumulative stock purchase agreement (“SPA”).
During the year ended December 31, 2025, given the prolonged period during which no SPA had been executed and the uncertainty surrounding the timing and completion of the share repurchase, management determined that the advance was no longer recoverable with sufficient certainty. Accordingly, the Company recorded a full allowance of $
As of June 30, 2026, there were no changes in relation to the advance payments made to Panagiotis Kozaris for the future repurchase of shares. No additional payments were made during the six-month period, and no cumulative stock purchase agreement (“SPA”) had been executed. The outstanding balance remains fully impaired following the allowance recorded as of December 31, 2025.
Maria Kozari
Maria Kozari is considered a related party to the Company due to the fact that she is the daughter of Panagiotis Kozaris, a former Operational General Manager and current employee of Cosmofarm S.A.
Accounts Receivable - Related Party
During 2021, the Company, through its subsidiary, Cosmofarm SA, commenced a partnership with a pharmacy called “Pharmacy & More”, owned by Maria Kozari. The transactions with the respective pharmacy were in Cosmofarm’s normal course of business, however, a more flexible credit policy was allowed as the pharmacy was new and needed to be established in the market. During the six-month periods ended June 30, 2026 and 2025 the Company’s net sales to Pharmacy & More amounted to $
The Company's previously contemplated acquisition of Pharmacy & More was not completed. Instead, on May 14, 2026, Pharmacy & More was sold by its owner to an unrelated third party. Pursuant to the related arrangements, the Company expects to receive approximately €400,000 from the sale proceeds as partial settlement of the outstanding receivable due from Pharmacy & More. The remaining outstanding balance is expected to be repaid by Panagiotis Kozaris, the father of Maria Kozari and a related party to the Company, pursuant to an installment repayment arrangement commencing in 2028.
Other Related Parties
Additionally, the Company has the following material related-party balances as of June 30, 2026: (a) a prepaid balance of $
For the three-month period ended June 30, 2026, the Company also accrued $
For the six-month period ended June 30, 2026, the Company also accrued $
| 29 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Notes Payable – Related Party
A summary of the Company’s related party notes payable as of June 30, 2026 and December 31, 2025 is presented below:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
|
|
|
|
|
|
| ||
Beginning Balance |
| $ |
|
| $ |
| ||
Payments |
|
|
|
|
|
| ||
Foreign currency translation |
|
| ( | ) |
|
|
| |
Ending Balance |
| $ |
|
| $ |
| ||
Dimitrios Goulielmos
Dimitris Goulielmos was the Company’s former CEO and a Director of the Company.
On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan has no maturity date and is non-interest bearing. As of June 30, 2026 and December 31, 2025, the Company had a principal balance of €10,200 ($
The above balances are adjusted for the foreign currency rate as of the balance sheet date.
Loans Payable – Related Party
A summary of the Company’s related party loans payable as of June 30, 2026 and December 31, 2025 is presented below:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
|
|
|
|
|
|
| ||
Beginning balance |
| $ |
|
| $ |
| ||
Proceeds |
|
|
|
|
|
| ||
Set-offs |
|
|
|
|
|
| ||
Payments |
|
| ( | ) |
|
| ( | ) |
Foreign currency translation |
|
|
|
|
|
| ||
Ending balance |
| $ |
|
| $ |
| ||
| 30 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Grigorios Siokas
From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. As of June 30, 2026 and December 31, 2025 the Company had an outstanding principal balance under these loans of $
The above balances are adjusted for the foreign currency rate as of the balance sheet date.
Except as set forth above, we have not entered into any material transactions with any director, executive officer, promoter, beneficial owner of more than five percent of our common stock, or any family members of such persons, other than compensation arrangements for officers and members of the Board of Directors, which are annually approved by the Board of Directors. For related balances, please refer to the “Other Related Parties” section above.
NOTE 10 – LINES OF CREDIT
A summary of the Company’s lines of credit as of June 30, 2026 and December 31, 2025 is presented below:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
National |
| $ |
|
| $ |
| ||
Alpha |
|
|
|
|
|
| ||
Credia Bank SA |
|
|
|
|
|
| ||
EFG |
|
|
|
|
|
| ||
Ending balance |
| $ |
|
| $ |
| ||
The Company has three lines of credit with the National Bank of Greece, which are renewed annually. The three lines have interest rates of
The maximum borrowing allowed for the 6% line of credit was $
The cumulative maximum borrowing allowed for the COSME 1 Facility and COSME 2 Facility (collectively, the "Facilities") was $
The Company maintains a line of credit with Alpha Bank of Greece ("Alpha LOC"), which is renewed annually and has a current interest rate of
The Company holds a line of credit with CrediaBank S.A. (formerly Pancreta Bank, renamed following its merger with Attica Bank during 2025) which is renewed annually and has a current interest rate of
The Company maintains a line of credit with EGF ("EGF LOC"), which is renewed annually and has a current interest rate of
On January 27, 2025, the Company entered into a bond loan agreement with CrediaBank S.A. (formerly Attica Bank, renamed following its merger with Pancreta Bank during 2025), providing for maximum borrowings of up to €2,200,000 ($
| 31 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Under the aforementioned line of credit agreements, the Company is required to maintain certain financial ratios and covenants. As of June 30, 2026, and December 31, 2025, the Company was in compliance with these ratios and covenants.
All lines of credit are guaranteed by customer receivable checks, which are a type of factoring in which postponed customer checks are assigned by the Company to the bank, in order to be financed at an agreed upon rate.
Interest expense on the Company’s outstanding lines of credit balances for the six months ended June 30, 2026 and 2025, was $
Interest expense on the Company’s outstanding lines of credit balances for the three months ended June 30, 2026 and 2025, was $
NOTE 11 – CONVERTIBLE DEBT
A summary of the Company’s convertible debt during the 3-month period ended June 30, 2026 and the year ended December 31, 2025 is presented below:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
|
|
|
|
|
|
| ||
Beginning balance convertible notes |
| $ |
|
| $ |
| ||
Issuance of new convertible notes |
|
|
|
|
|
| ||
Fair value adjustment |
|
| ( | ) |
|
|
| |
Payments |
|
|
|
|
|
| ||
Conversion to common stock |
|
| ( | ) |
|
| ( | ) |
Subtotal notes |
|
|
|
|
|
| ||
Unamortized debt discount |
|
| ( | ) |
|
| ( | ) |
Convertible note payable, net of fair value adjustment and unamortized debt disc |
|
|
|
|
|
| ||
Convertible Notes payable – long-term |
|
|
|
|
|
| ||
Convertible Notes payable - short-term |
| $ |
|
| $ |
| ||
As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“ASC 825”), the Company elects to account for its convertible promissory note, which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value are recorded as a component of non-operating loss in the condensed consolidated statements of operations. This election is made on an instrument-by-instrument basis as permitted under ASC 825. The portion of total changes in fair value of the convertible promissory note attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income in the accompanying condensed Consolidated Statements of Operations and Comprehensive Income (Loss). As a result of electing the fair value option, direct costs and fees related to the convertible promissory note are expensed as incurred.
The Company estimates the fair value of the convertible promissory note using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration of the convertible promissory note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, we estimate our expected future volatility based on the actual volatility of our common stock and historical volatility of our common stock utilizing a lookback period consistent with the time to expiration. The time to expiration is based on the contractual maturity date, giving consideration to the voluntary, mandatory and potential accelerated redemption scenarios. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using Bloomberg's Default Risk function which uses our financial information to calculate a default risk specific to the Company.
| 32 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
May & July 2025 Convertible Promissory Notes
On May 23, 2025 the Company issued two convertible promissory notes (the “May 2025 Notes”) to two separate investors. One of the May 2025 Notes had a principal amount of $
On July 9, 2025 the Company issued two convertible promissory notes; one convertible promissory note was issued to Boot (the “Second Boot Note”) and other was issued to Vanquish Funding Group, Inc. (the “Vanquish Note”). Together, the two notes are referred to as the “July 2025 Notes”. The Second Boot Note has a principal amount of $
Due to certain embedded features within the May and July 2025 Notes, the Company elected to account for the May and July 2025 Notes and all the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the condensed consolidated statements of operations.
During the period from November 24, 2025 through December 7, 2025, the Company issued an aggregate of
During the six-month period ended June 30, 2026, the Company issued an aggregate of
For the year ended December 31, 2025, the Company recorded a loss of $
Interest expense on the July 2025 Notes totaled $
June 2025 Convertible Promissory Note
On June 9, 2025 the Company issued a secured convertible promissory note (the “June 2025 Note”) to an investor. The June 2025 Note has a principal amount of $
Due to certain embedded features within the June 2025 Note, the Company elected to account for the June 2025 Note and all the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the condensed consolidated statements of operations.
The fair value of the convertible notes was estimated using a Monte Carlo simulation model. Significant assumptions included a stock price of $
| 33 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
On August 5, 2025, the Company entered into an amendment to its June 2025 Note. The amendment was executed following the Company’s failure to make its initial interest payment, which constituted an event of default under the original agreement. Under the terms of the amendment, the Company issued
The amendment further introduced provisions requiring the Company to apply 30% of any proceeds from future At-The-Market (“ATM”) equity offerings with A.G.P. toward repayment of the June 2025 Note, established a
The issuance of shares to the investor was accounted for as a non-cash debt modification expense, measured at the fair value of the shares on the amendment date of $439,000 and recorded in change in fair value of convertible notes in the condensed consolidated statements of operations. The amendment did not represent a substantial modification or extinguishment of the existing debt under ASC 470-50, as the primary economic terms of the June 2025 Note remained intact.
On June 9, 2026, the Company entered into an extension agreement with the holder of the June 2025 Note, pursuant to which the maturity date of the note was extended from June 9, 2026 to September 30, 2026. In connection with the extension agreement, the Company issued
During the six-month period ended June 30, 2026, the Company issued an aggregate of
For the three and six months ended June 30, 2026 the Company recorded a loss of
Interest expense on June 2025 Note totaled $
August 2025 Convertible Promissory Note
On August 5, 2025 the Company issued a senior secured convertible promissory note (the “August 2025 Note”) to an investor. The August 2025 Note has a principal amount of $
The Company identified certain embedded features within the August 2025 Note that were required to bifurcated as derivative liabilities in accordance with ASC 815-40. Upon issuance, the Company recognized the fair value of the derivative liability of $
During the six-month period ended June 30, 2026, the Company issued an aggregate of
In connection with the conversions during the three- and six-month periods ended June 30, 2026, the Company recognized a conversion loss of approximately $
| 34 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
For the three and six months ended June 30, 2026, the Company recorded a gain of $
Interest expense related to the August 2025 Note totaled $
The following table presents the change in fair value of the derivative liability for the periods identified:
Balance, January 1, 2026 |
| $ |
| |
Change in fair value of the derivative liability |
|
| ( | ) |
Balance, June 30, 2026 |
| $ |
|
April 2026 Convertible Promissory Notes
On April 1 and April 16, 2026 the Company issued two convertible promissory notes (the “April 2026 Notes”) to two separate investors. One of the April 2026 Notes had a principal amount of $
Due to certain embedded features within the April 2026 Notes, the Company elected to account for the April 2026 Notes and all the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the condensed consolidated statements of operations.
For the three and six months ended June 30, 2026 the Company recorded a loss of $
Interest expense on the April 2026 Notes totaled $
| 35 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 12 – NOTES PAYABLE
A summary of the Company’s third-party debt as of and for period ended June 30, 2026, and the year ended December 31, 2025 is presented below:
June 30, 2026 |
| Trade Facility |
|
| Third Party |
|
| COVID Loans |
|
| Total |
| ||||
Beginning balance, December 31, 2025 |
| $ |
|
|
|
|
|
|
|
|
|
| ||||
Payments |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Foreign currency translation |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Ending balance, June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable - long-term |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Notes payable - short-term |
| $ |
|
|
|
|
|
|
|
|
|
| ||||
December 31, 2025 |
| Trade Facility |
|
| Third Party |
|
| COVID Loans |
|
| Total |
| ||||
Beginning balance, January 1, 2025 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Proceeds |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Payments |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Debt exchanges |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Recapitalization of debt |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Ending balance, December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable – long-term |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Notes payable - short-term |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Our outstanding debt as of June 30, 2026 is repayable as follows:
|
| June 30, 2026 |
| |
2027 |
| $ |
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
2031 and thereafter |
|
|
| |
Total debt |
|
|
| |
Less: notes payable - current portion |
|
| ( | ) |
Notes payable - long term portion |
| $ |
| |
| 36 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Trade Facility Agreements
On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the “TFF”) with Synthesis Structured Commodity Trade Finance Limited (the “Lender”), as amended on November 16, 2017, May 16, 2018, and December 22, 2022. Under the 2022 amendment, which became effective as of October 31, 2022, the parties amended the interest and repayment terms and extended the final repayment date to October 31, 2025. The amended interest rate was
No principal repayments were made during the six-month period ended June 30, 2026. As of June 30, 2026, the Company had an outstanding principal balance of €1,050,000 ($
June 23, 2020 Debt Agreement
On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the National Bank of Greece S.A. (the “Bank”) to borrow up to €500,000 ($
November 19, 2020 Debt Agreement
On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($
July 30, 2021 Debt Agreement
On July 30, 2021, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($
June 9, 2022 Debt Agreement
On June 9, 2022, the Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($
| 37 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
July 14, 2023 Debt Agreement
On July 14, 2023, the Company entered into an agreement with a third-party lender in the principal amount of €1,000,000 ($
Cloudscreen Promissory Note
On January 23, 2024, the Company completed the acquisition of Cloudscreen, an AI-powered drug repurposing platform, for total consideration of $
July 29, 2024 Debt Agreement
On July 29, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($
December 20, 2024 Debt Agreement
On December 20, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($
January 27, 2025 Debt Agreement
On January 27, 2025, the Company entered into a bond loan agreement with Attica Bank, providing for maximum borrowings of up to €2,200,000 ($
May 29, 2025 Debt agreement
On May 29, 2025, the Company entered into a business loan agreement with a third-party lender in the principal amount of $
COVID-19 Loans
On May 12, 2020, the Company’s wholly owned subsidiary, SkyPharm SA, was granted a loan from the Greek government in the amount of €300,000 (approximately $
On June 24, 2020, the Company’s subsidiary, Decahedron, received a loan £50,000 ($
None of the above loans were made by any related parties.
| 38 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 13 – LEASES
Operating Leases
The Company’s weighted-average remaining lease term relating to its operating leases is
The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of June 30, 2026:
Maturity of Operating Lease Liability |
|
|
| |
2027 |
| $ |
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 and thereafter |
|
|
| |
Total undiscounted operating lease payments |
| $ |
| |
Less: Imputed interest |
|
| ( | ) |
Present value of operating lease liabilities |
| $ |
| |
The Company incurred lease expense, due to amortization of operating lease right-of-use assets, of $
Finance Leases
The Company's finance leases were immaterial as of June 30, 2026 (finance lease right-of-use assets of approximately $
| 39 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 14 – OTHER LIABILITIES
As of June 30, 2026 the Company’s other liabilities primarily consist of obligations to local tax authorities, payroll taxes, fines, and other miscellaneous liabilities.
The significant components of other liabilities are as follows:
| · | The Company’s Greek subsidiaries have $ |
|
|
|
| · | Payroll and other tax-related current liabilities amount to $ |
|
|
|
| · | A provision of $ |
|
|
|
| · | A provision of $ |
| · | Customer prepayments totaling $
|
| · | Other various current liabilities were $ |
Liabilities that are due within 12 months from the balance sheet date are classified under “Other Current Liabilities. “Obligations that extend beyond 12 months are classified as “Other Non-Current Liabilities.”
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company may be involved in litigation relating to claims arising out of the Company’s operations in the normal course of business. As of June 30, 2026, the following proceedings were pending. None is expected to have a material financial or operational impact upon the Company.
Urban Planning Compensation Claim – Cana Laboratories
In October 2023, the Company’s subsidiary, Cana Laboratories, was approached by an attorney representing two clients seeking compensation of €39,211 related to 34.70 square meters of urban sprawl, for which an Act of Imputation had been issued by the Department of Urban Planning. The Company’s legal counsel has advised that Cana is not obligated to accept the compensatory value as agreed and has suggested exploring an out-of-court settlement. As of the date of this report, the clients’ attorney has not provided further communication.
Pending Lawsuits Against Hospitals – Cana Laboratories SA
Cana Laboratories SA v. Evangelismos Hospital (Case No. ΑΓ1530/2022) — Cana Laboratories SA filed a lawsuit seeking recovery of approximately €278,054 ($
Cana Laboratories SA v. Evangelismos Hospital (Case No. ΑΓ1225/2023) — Cana Laboratories SA filed a lawsuit seeking recovery of approximately €248,382 ($
Cana Laboratories SA v. Konstantopouleio Hospital (Case No. ΑΓ1234/2023) — Cana Laboratories SA had initiated legal proceedings to recover approximately €1,291 ($
Cana Laboratories SA v. Papanikolaou Hospital (Case No. ΑΓ575/2024) — Cana Laboratories SA had initiated legal proceedings to recover approximately €89,948 ($
Cana Laboratories SA v. Theageneio Hospital (Case No. ΑΓ574/2024) — Cana Laboratories SA had initiated legal proceedings to recover approximately €16,272 ($
All above claims have been classified under “Other assets” within non-current assets in the Company’s consolidated balance sheets as of June 30, 2026.
| 40 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Employment Dispute – Cana Laboratories
A lawsuit filed on April 5, 2018, by a former employee against the Company’s subsidiary, Cana, before the Athens Court of First Instance, sought the nullification of the termination of employment and compensation for unpaid wages and moral damages. Following multiple appeals, Judgment No. 1192/2024 was issued on September 26, 2023, requiring Cana to reinstate the former employee, with a penalty of €200 per day for non-compliance. According to the Company’s legal counsel, for the penalty to be enforceable, the former employee must file a new lawsuit requesting reinstatement. As of the date of this report, no such lawsuit or request for reinstatement has been received.
On April 28, 2025, the Company entered into a settlement agreement with a former employee, acknowledging its obligation to pay €62,500 ($
Neiada A., Neiadas B. v. Cana Laboratories SA
In February 2025, plaintiffs filed a lawsuit against the Company’s subsidiary, Cana Laboratories SA before the Single-Member First Instance Court of Athens, seeking restitution of a leased property and recovery of approximately €21,678 ($
DA Melissotopi Ltd v. Cana Laboratories SA
In July 2025, plaintiff filed a lawsuit against Cana Laboratories SA before the Single-Member First Instance Court of Athens, asserting claims of approximately €17,868 ($
Claims for Recovery of Receivables
Cosmofarm SA v. Papaleka E. — Cosmofarm SA has initiated legal proceedings before the Single-Member First Instance Court of Athens to recover approximately €20,301 ($
Cosmofarm SA v. Katsanis G. — Cosmofarm SA has initiated legal proceedings before the Single-Member First Instance Court of Athens to recover approximately €15,143 ($
Cosmofarm SA v. Renieris A. — Cosmofarm SA has initiated legal proceedings before the Single-Member First Instance Court of Athens to recover approximately €15,255 ($
Tax Assessments — SkyPharm S.A.
In February 2026, the Greek tax authorities issued corrective assessments against the Company's subsidiary SkyPharm S.A.
| 41 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Advisory Agreements
The Company has entered into various advisory and consulting agreements with third-party advisors, under which the advisors provide marketing, investor relations, digital marketing, and general business advisory services. As consideration, the Company issues common stock, with the number of shares, fair value, and vesting schedules established at the grant date. Certain agreements include clawback provisions for unvested shares if the arrangement is terminated prior to full vesting. Stock-based compensation expense related to these agreements is recognized evenly over the respective service periods and is classified as “General and administrative expenses” in the consolidated statements of operations and comprehensive income (loss).
On July 24, 2025, the Company entered into a marketing services agreement with a third-party advisor, pursuant to which it issued
On November 21, 2023, the Company entered into certain consulting agreements with four third-party consultants for the provision of a variety of services such as digital marketing, advisory services relating to target acquisitions and M&As and other additional services as described in the respective agreements. The agreements have duration from ten to 18 months and the consultants will solely receive stock consideration for the services rendered. More precisely, they have been awarded a total of
On July 1, 2024 the Company entered into a consulting agreement with a third-party consultant for the provision of a variety of services such as preparation of press releases and other publications, relationship management and other additional services as described in the respective agreement. The agreement has a duration of 16 months, and the consultant will solely receive stock consideration for the services rendered. More precisely, they have been awarded a total of
On May 19, 2026 the Company entered into certain consulting agreements with three third-party consultants for the provision of a variety of services such as digital marketing, advisory services relating to target acquisitions and M&As and other additional services as described in the respective agreements. The agreements have duration of 18 months and the consultants will solely receive stock consideration for the services rendered. More precisely, they have been awarded a total of
The corresponding stock-based compensation expense is accrued evenly over the term of the agreements. For the six months ended June 30, 2026 and 2025 the Company has recorded $
| 42 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Research and Development Agreements
The Company entered into a Research & Development agreement with Doc Pharma S.A. on May 17, 2021. Under this agreement, Doc Pharma is responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life®. More specifically, Doc Pharma is responsible for the product development and the Company has added 165 of such products codes in its portfolio as of June 30, 2026. The licenses purchased by Doc Pharma SA are capitalized and included in “Goodwill and intangible assets, net” of the Company’s Unaudited Condensed Consolidated Balance Sheets as of June 30, 2026. Thus, no relevant R&D expense had been charged to the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive income (Loss), concerning this agreement.
On June 25, 2022, the Company signed a research and development (“R&D”) agreement with a third party (CloudPharm PC), through which the Company assigned to the third party the development of new products and services in the field of health, focusing on the human intestinal microbiome. The project includes two phases. Phase 1 has a 20-month duration and its cost amounts to EUR 758,000 ($
On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition is pursuant to the purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves uncovering new target proteins or indications for existing drugs for use in treating different diseases. The total purchase price amounted to $
On December 3, 2024, the Company and the National Hellenic Research Foundation (NHRF) (Contractor) signed a Research Study Agreement. NHRF will conduct an in vitro study to support modifications to an invention, pursuant to the prior agreement involving CloudPharm PC (signed on June 15, 2022). NHRF ensures scientific rigor, provides updates, and maintains confidentiality. Cosmos Health provides necessary support and documentation. Rights to the research protocol belong to CloudPharm PC, NHRF, and Cosmos Health, while NHRF retains control over its methodologies. NHRF cannot publish findings without Cosmos Health’s approval and cannot use the study for other purposes. The total fee to be paid by the Company amounts to €60,000 plus VAT, payable in three installments. For the six-month period ended June 30, 2026, the Company incurred no fee concerning this agreement.
On December 6, 2024, the Company signed an Independent Contractor Agreement with a third-party contractor (the “Contractor”). The Contractor will provide oncology research and development services exclusively to the Company. The contract lasts three years (December 5, 2024 – December 5, 2027) and may be extended by mutual agreement. The Company may terminate the contract immediately for specific causes, including felony conviction, fraud, or loss of medical license. Either party may terminate the contract with 30 days' written notice. Certain compensation obligations will remain even after termination. The monthly consideration to be paid to the Contractor is based on the commencement of the Clinical Trials and New Drugs Applications and additional cash and stock consideration is payable based on certain milestones. None of the milestones were met as of June 30, 2026, and thus the Company has incurred no expenses as of the end of the period.
On December 31, 2025, the Company signed an agreement with a related party, DocPharma SA (the “Licensor”), through which the Company obtained a royalty-bearing, exclusive worldwide license to actively commercialize the patents owned by the Licensor, through research and preclinical and clinical trials for the useful life of the patents, or for 20 years, whichever is longer. The patents, filed in 2016 and 2017 respectively, cover innovative treatments for cancer. The terms of the agreement include an initial payment of EUR 500,000 due by the end of 2024, followed by fixed annual payments of EUR 350,000 during the five-year Start-Up Term from 2025 to 2030. After the Start-Up Term, the Company will pay a 1.5% royalty on annual net sales of licensed products covered by an issued patent. Moreover, the Company retains an optional buy-out right for a total amount of EUR 7,500,000, which can be exercised with 60 days' notice and a 60-day close period. The Company also has the right to sublicense the patents. For the six months ended June 30, 2026, the Company did not incur any royalties under this agreement. However, it incurred $
NOTE 16 – STOCK OPTIONS AND WARRANTS
Omnibus Equity Incentive Plan
On September 19, 2022, the Company held a Board of Directors meeting, whereas, the Board of Directors had elected to adopt an Omnibus Equity Incentive Plan (the “2022 Plan”), that includes reserving
On April 3, 2023, the Company approved incentive stock awards for the CFO, certain officers and directors and other employees of the Company.
| 43 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
On August 21, 2023, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2023 Omnibus Equity Incentive Plan (the “2023 Plan”). The 2023 Plan is designed to enable the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. Subject to certain adjustments (as provided in Section 4.2 of the 2023 Plan) and exception (as provided in Section 5.6(b) of the 2023 Plan), the maximum number of shares reserved for issuance under the Plan (including incentive share options) is
On September 16, 2024, the Company’s Board of Directors approved incentive stock awards for the CEO, the CFO, certain officers and directors and other key employees of the Company pursuant to the 2023 Plan. The awards are in the form of restricted stock and will vest in two parts: 50% on September 16, 2025 and 50% on September 16, 2026. A total of
On September 16, 2024, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2024 Omnibus Equity Incentive Plan (the “2024 Plan”). The 2024 Plan is designed to enable the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. Subject to certain adjustments (as provided in Section 4.2 of the 2024 Plan) and exception (as provided in Section 5.6(b) of the 2024 Plan), the maximum number of shares reserved for issuance under the Plan (including incentive share options) is
On August 5, 2025, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2025 Omnibus Equity Incentive Plan (the “2025 Plan”). The 2025 Plan is designed to enable the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. Subject to certain adjustments (as provided in Section 4.2 of the 2025 Plan) and exception (as provided in Section 5.6(b) of the 2025 Plan), the maximum number of shares reserved for issuance under the Plan (including incentive share options) is
On December 30, 2025, the Company’s Board of Directors approved incentive stock awards for the Chief Executive Officer, the Chief Financial Officer, certain officers and directors, and other key employees of the Company pursuant to the 2024 Plan. The awards were granted in the form of restricted stock and vest in two installments, with 50% vesting on December 31, 2026 and the remaining 50% vesting on December 31, 2027. A total of
On May 15, 2026 the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2026 Omnibus Equity Incentive Plan (the “2026 Plan”). The 2026 Plan is designed to enable the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. Subject to certain adjustments (as provided in Section 4.2 of the 2026 Plan) and exception (as provided in Section 5.6(b) of the 2026 Plan), the maximum number of shares reserved for issuance under the Plan (including incentive share options) is
| 44 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
On May 19, 2026 the Company’s Board of Directors approved incentive stock awards for the Chief Executive Officer, the Chief Financial Officer, certain officers and directors, and other key employees of the Company pursuant to the 2024 and 2025 Plans. The awards were granted in the form of restricted stock and vest in two installments, with 50% vesting on May 19, 2027 and the remaining 50% vesting on May 19, 2028. A total of
Warrant Anti-Dilution Adjustment and Deemed Dividend
As of June 30, 2026, there were
A summary of the Company’s warrant activity for the three months ended June 30, 2026 and the year ending December 31, 2025 is as follows:
|
|
|
|
|
|
|
| Weighted |
|
|
|
| ||||
|
|
|
|
| Weighted |
|
| Average |
|
|
|
| ||||
|
|
|
|
| Average |
|
| Remaining |
|
| Aggregate |
| ||||
|
| Number of |
|
| Exercise |
|
| Contractual |
|
| Intrinsic |
| ||||
Warrants |
| Shares |
|
| Price |
|
| Term |
|
| Value |
| ||||
Balance Outstanding, January 1, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Granted |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| |
Forfeited |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Exercised |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Expired |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Balance Outstanding, December 31, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Granted |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
| |
Forfeited |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Exercised |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Expired |
|
| ( | ) |
|
| - |
|
|
| - |
|
|
| - |
|
Balance Outstanding, June 30, 2026 |
|
|
|
|
|
|
|
|
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, June 30, 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
| 45 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
NOTE 17 – DIGITAL ASSETS
The Company holds digital assets consisting of Ethereum (ETH) and Bitcoin (BTC) that are measured at fair value on a recurring basis. Digital assets with quoted prices in active markets for identical assets are classified as Level 1 within the fair value hierarchy as established under ASC 820, Fair Value Measurement.
During the six months ended June 30, 2026, the Company purchased
|
| Quantity |
|
| Cost Basis |
|
| Fair Value |
|
| Cumulative Unrealized Loss |
| ||||
Ethereum |
|
|
|
| $ |
|
| $ |
|
|
| ( | ) | |||
Bitcoin |
|
|
|
|
|
|
|
|
|
|
| ( | ) | |||
Total digital assets |
|
|
|
| $ |
|
| $ |
|
|
| ( | ) | |||
A summary of the movements in digital assets during the six-month period ended June 30, 2026, is presented below, disaggregated by each individual digital asset.
DIGITAL ASSET ROLLFORWARD |
| |||||||||||||||||||
For the six months ended June 30, 2026 |
| |||||||||||||||||||
|
| Number of Units |
|
| Weighted Average Cost Per Unit ($) |
|
| Cost Basis ($) |
|
| Fair Value ($) |
|
| Unrealized Loss ($) |
| |||||
Ethereum (ETH) |
| |||||||||||||||||||
Beginning Balance, January 1, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
Purchases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Sales / Transfers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Ending Balance, June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
|
| Number of Units |
|
| Weighted Average Cost Per Unit ($) |
|
| Cost Basis ($) |
|
| Fair Value ($) |
|
| Unrealized Loss ($) |
| |||||
Bitcoin (BTC) |
| |||||||||||||||||||
Beginning Balance, January 1, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Purchases |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
Sales / Transfers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Ending Balance, June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
NOTE 18 – DISAGGREGATION OF REVENUE
ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.). ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue.
The Company disaggregates revenue by country to depict the nature and economic characteristics affecting revenue.
| 46 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
The following table presents our revenue disaggregated by country for the three months ended June 30, 2026 and June 30, 2025:
Country |
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Albania |
| $ |
|
|
|
| ||
Bulgaria |
|
|
|
|
|
| ||
Croatia |
|
|
|
|
|
| ||
Cyprus |
|
|
|
|
|
| ||
Greece |
|
|
|
|
|
| ||
SKOPJE North Macedonia |
|
|
|
|
|
| ||
UAE |
|
|
|
|
|
| ||
UK |
|
|
|
|
|
| ||
USA |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
The following table presents our revenue disaggregated by country for the six months ended June 30, 2026 and June 30, 2025:
Country |
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Albania |
| $ |
|
|
|
| ||
Bulgaria |
|
|
|
|
|
| ||
Croatia |
|
|
|
|
|
| ||
Cyprus |
|
|
|
|
|
| ||
Greece |
|
|
|
|
|
| ||
SKOPJE North Macedonia |
|
|
|
|
|
| ||
UAE |
|
|
|
|
|
| ||
UK |
|
|
|
|
|
| ||
USA |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
NOTE 19 – SEGMENT REPORTING
A. Basis for segmentation
The Group operates through various operating segments, which include the wholesale sector, the pharmaceutical manufacturing sector, the nutraceuticals and pharmaceuticals sector and other, with only the first three of them being reportable segments based on the criteria (quantitative thresholds) of ASC 280. The financial information utilized by our Chief Operating Decision Maker (“CODM”), which is our CEO, for resource allocation and performance evaluation is included within the operating segments described above. The reconciling items presented in the tables below are excluded from the segment data provided to the Chief Operating Decision Maker (“CODM”). The “Other” category primarily consists of corporate expenses, including, but not limited to, costs related to SEC legal and compliance matters, executive compensation, audit and review fees, and other corporate overhead expenses.
| 47 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
B. Information about reportable segments
The table below presents information about the Company's reportable segments for the six and three-month periods ended June 30, 2026 and June 30, 2025. The accounting policies followed in the preparation of the reportable segments are the same with those followed in the preparation of the Company's condensed consolidated financial statements.
Six-month period ended June 30, 2026
|
| Wholesale |
|
| Pharma manufacturing |
|
| Nutraceuticals & Pharmaceuticals |
|
| Other |
|
| Total |
| |||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cost of Sales |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
General and Administrative expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Salaries and wages |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Sales and Marketing expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net finance costs |
|
| ( | ) |
|
|
|
|
| ) |
|
| ( | ) |
|
| ( | ) | ||
Segment profit / (loss) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Non-cash interest |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Change in fair value of derivative liability |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Gain/(Loss) on digital assets |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Change in fair value of convertible notes |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Other income (expense), net |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
|
|
|
| |||
Net profit/(loss) before Income Taxes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Six-month period ended June 30, 2025
|
| Wholesale |
|
| Pharma manufacturing |
|
| Nutraceuticals & Pharmaceuticals |
|
| Other |
|
| Total |
| |||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cost of Sales |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
General and Administrative expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Salaries |
|
| ( |
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Sales and Marketing expenses |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Research and Development costs |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Net finance costs |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Segment profit / (loss) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Foreign currency adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income and expenses |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Net profit/(loss) before Income Taxes |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
| 48 |
| Table of Contents |
COSMOS HEALTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026
Three-month period ended June 30, 2026
|
| Wholesale |
|
| Pharma manufacturing |
|
| Nutraceuticals & Pharmaceuticals |
|
| Other |
|
| Total |
| |||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cost of Sales |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
General and Administrative expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Salaries |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Sales and Marketing expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net finance costs |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Segment profit / (loss) |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Non-cash interest expense |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Change in fair value of derivative liability |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Gain/(Loss) on digital assets |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Change in fair value of convertible notes |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Other income (expense), net |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Net profit/(loss) before Income Taxes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Three-month period ended June 30, 2025 |
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Wholesale |
|
| Pharma manufacturing |
|
| Nutraceuticals & Pharmaceuticals |
|
| Other |
|
| Total |
| |||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cost of Sales |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
General and Administrative expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Salaries |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Sales and Marketing expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Research and Development costs |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Net finance costs |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Segment profit / (loss) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Stock based compensation |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Foreign currency adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income and expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Net profit/(loss) before Income Taxes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
The following summary describes the operations of each reportable segment:
Reportable segments |
| Operations |
Wholesale |
| Distribution and export of pharmaceutical products |
Pharma manufacturing |
| Production of pharmaceutical products |
Nutraceutical and pharmaceuticals |
| Trade of owned nutraceutical & pharmaceutical products |
NOTE 20 – SUBSEQUENT EVENTS
During the subsequent period, the Company issued an aggregate of
During the subsequent period, the Company repurchased an additional
| 49 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The financial statements and this Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A") have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.
The Company expects to continue to incur significant operating losses for the foreseeable future. If the Company is unable to secure additional capital, it may be required to take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays or entirely prevent the Company's continued efforts to commercialize its current or future products, which are critical to the realization of its business plan and the future operations of the Company. This uncertainty, along with the Company's history of losses, indicates that there is substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.
In addition to accessing public markets through the exercise of outstanding warrants, additional public and private debt and equity financings, management believes that the Company has access to additional capital resources through public and/or private equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, it is possible that the Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's shareholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion, or future commercialization efforts, which could adversely affect its business prospects. The Company is subject to risks associated with any pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that the Company's research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable.
Available Information
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 June 30, 2026.
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.
We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.
Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Overview
Summary
We are diversified, vertically integrated global healthcare group, owner of proprietary pharmaceutical and nutraceutical brands, generics, manufacturer and distributor of healthcare products, engaged in research & development of innovative medicines and repurposing drugs as well as operator of a telehealth platform. The Company, through its subsidiaries, is operating within the pharmaceutical industry and in order to compete successfully in the healthcare industry, must demonstrate that its products offer medical benefits as well as cost advantages. Currently, most of the products that the Company is trading, compete with other products already on the market in the same therapeutic category, and are subject to potential competition from new products that competitors may introduce in the future.
| 50 |
| Table of Contents |
Revenue sources
Full Line Wholesaler
As a full line pharmaceutical wholesaler, we distribute a comprehensive range of pharmaceutical products, including prescription medications, over-the-counter (OTC) drugs, medical devices, food supplements, nutraceuticals, cosmetics and other healthcare products, to various businesses within the healthcare sector such as retail pharmacies, hospitals, private clinics and other wholesale pharmaceutical distributors.
Branded Pharmaceuticals & Generics
We are engaged in the production, promotion, distribution and sale of licensed branded generics and OTC products throughout Europe by our subsidiaries in Greece and UK. Our capital efficient business model is based on infrastructure, efficiency and scale. We believe that there is a significant growth on opportunities through product additions and geographic expansion.
Healthcare Distribution
We conduct direct distribution and sales of pharmaceuticals, medical devices, branded generics and OTC products. Our automated and GDP licensed distribution facilities ensure all medications reach their destination daily on an efficient and secure way. Our network exceeds over 1,500 pharmacies in Greece. We have created an upgraded and high-end distribution center in Greece due to our Robotic systems and integrated automations (“ROWA” robotics).
Nutraceutical
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.
Regulations and Licenses
Decahedron received its Wholesale Distribution Authorization for human use on February 5, 2021, from the UK Medicines and Healthcare Products Regulatory Agency (“MHRA”) in accordance with Regulation 18 of the Human Medicines Regulations 2012 (SI 2012/1916) and it is subject to the provisions of those Regulations and the Medicines Act 1971. This License will continue to remain in force from the date of issue by the Licensing Authority unless cancelled, suspended, revoked or varied as to the period of its validity or relinquished by the authorization holder.
Cosmofarm received its Wholesale Distribution Authorization for human use on February 15, 2019, issued by the National Organization for Medicines. The license is valid for a period of five years in accordance with EU Directive 2013/C343/01 and was renewed on February 14, 2024. Furthermore, Cosmofarm was granted a GDP (Good Distribution Practice) certificate on November 11, 2019.
Our subsidiary, Cana SA, is a holder of Good Manufacturing Practices license (GMP), which means that it is certified for fulfilling the minimum standards that a medicines manufacturer must meet in the production processes.
Our subsidiaries are ISO 9001 certified for a management system for the trade and distribution of pharmaceuticals. As part of the certification process by the International Organization for Standardization, we need to be compliant with the General Data Protection Regulation (“GDPR”) adopted by the European Union in May 2018. GDPR applies to the processing of personal data of persons in the EU by a controller or processor.
| 51 |
| Table of Contents |
General Risks
Supply chain disruption is a growing concern for the European pharmaceutical industry as it increasingly looks to cut costs by relying on ‘emerging markets’, where standards can be lower in terms of compliance, ethics and health and safety. Our business depends on the timely supply of materials, services and related products to meet the demands of our customers, which depends, in part, on the timely delivery of materials and services from suppliers and contract manufacturers. Significant or sudden increases in demand for our products, as well as worldwide demand for the raw materials and services we require to manufacture and sell our products, may result in a shortage of such materials or may cause shipment delays due to transportation interruptions or capacity constraints. Such shortages or delays could adversely impact our suppliers’ ability to meet our demand requirements. Difficulties in obtaining sufficient and timely supply of materials or services can have an adverse impact on our manufacturing operations and our ability to meet customer demand.
We may also experience significant interruptions of our manufacturing operations, delays in our ability to deliver products, increased costs or customer order cancellations as a result of:
| · | the failure or inability to accurately forecast demand and obtain sufficient quantities of quality raw materials on a cost-effective basis; |
|
|
|
| · | volatility in the availability and cost of materials or services, including rising prices due to inflation; |
|
|
|
| · | difficulties or delays in obtaining required import or export approvals; |
|
|
|
| · | shipment delays due to transportation interruptions or capacity constraints, such as reduced availability of air or ground transport or port closures; |
|
|
|
| · | information technology or infrastructure failures, including those of a third-party supplier or service provider; and |
|
|
|
| · | natural disasters or other events beyond our control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or extreme weather conditions, fires, regional economic downturns, regional or global health epidemics, pandemics, geopolitical turmoil, increased trade restrictions between the U.S. and China and other countries, social unrest, political instability, terrorism, or acts of war) in locations where we or our customers or suppliers have manufacturing or other operations. |
Hikes in the price of medicine and their impact on the sustainability of the healthcare systems are garnering more and more attention. European regulators are willing to play their part in safeguarding continued access to safe and effective medicines. Regulators can speed up the approval of branded pharmaceuticals and biosimilars to boost competition and drive down prices.
Cuts in healthcare spending have been frequently occurring since the financial crises of the late of 2000’s. Europe’s slow recovery has been uneven, with austerity and economic uncertainty, especially in the EU’s poorer member states, such as Greece.
Distribution and Trade Agreements
On November 25, 2021, SkyPharm SA signed a trade agreement with a wholesaler which operates in the storage, distribution, trading and promotion of pharmaceutical products (“Distributor C”). Based on the agreement, Distributor C is appointed as the exclusive representative for the promotion and distribution of our proprietary nutraceutical products Sky Premium Life® in Greece.
During July 2021, the Company’s subsidiary Decahedron Ltd created a distribution page on Amazon UK, through which it sells, advertises and promotes our own proprietary branded nutraceutical product line Sky Premium Life®, directly to final consumers.
On September 22, 2022, the Company entered into a distribution agreement with a third party in order to become the distributor of Monkeypox Virus Real-Time PCR Detection Kits. Cosmos has exclusive distribution rights for Greece and Cyprus, with the opportunity to distribute the test kits across Europe on a non-exclusive basis.
On June 27, 2024, the Company entered into an exclusive distribution agreement (the “Agreement”) with Pharmalink for the distribution of its Sky Premium Life® products in the United Arab Emirates (UAE). Under the Agreement, Pharmalink is responsible for all key functions, including sales and marketing, regulatory affairs, logistics, supply, and distribution of the Sky Premium Life® product line within the UAE. The Company has received an initial purchase order from Pharmalink for 130,000 units and expects to receive orders exceeding 500,000 units during 2026, and more than 3,000,000 units over the next five years. However, as of the filing date, no additional orders have been executed.
| 52 |
| Table of Contents |
Acquisitions and Co-Ventures
ZipDoctor
On September 28, 2022, the Company entered into a non-binding letter of intent (“LOI”) agreement to wholly acquire ZipDoctor Inc., a company that possesses a direct-to-consumer subscription-based telemedicine platform, that expects to provide its customers affordable, unlimited, 24/7 access to board certified physicians and licensed mental and behavioral health counselors and therapists. The current parent company of the acquiree will continue to manage all its aspects of the day-to-day operations, including product development, marketing, and operational support.
On March 17, 2023, the Company entered into a definitive agreement to acquire ZipDoctor Inc. for a total sum of $150,000. The transaction closed on April 3, 2023.
CANA
In June 2023, the Company completed the acquisition of Cana Laboratories Holdings (Cyprus) Limited (“Cana”), including its wholly owned subsidiary Pharmaceutical Laboratories Cana S.A., a Greek pharmaceutical company engaged in the manufacturing, distribution, and marketing of branded pharmaceutical and healthcare products. The total consideration consisted of €800,000 in cash, 46,377 shares of restricted common stock valued at $800,000, and a €4.1 million secured promissory note. The acquisition strengthened the Company’s vertical integration capabilities and manufacturing operations through Cana’s GMP-licensed facilities and established relationships with multinational healthcare companies.
Bikas
In June 2023, the Company also acquired the pharmaceutical distribution network and customer base of Ioannis Bikas O.E. (“Bikas”) for total consideration of approximately €400,000, consisting of cash and common stock. The acquisition was accounted for as an asset acquisition under ASC 805, resulting in the recognition of an intangible asset related to the acquired customer base. The acquisition expanded the Company’s distribution footprint in Greece and contributed to increased revenues and operational synergies.
Cloudscreen
In January 2024, the Company completed the acquisition of Cloudscreen, an AI-powered drug repurposing platform, for total consideration of $637,080 consisting of common stock and cash payable under a promissory note. The acquisition was accounted for as an asset acquisition under ASC 805, and the acquired technology platform was recorded as an intangible asset.
Results of Operations
Revenue and net loss
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.
Revenue for the three months ended June 30, 2026 increased by approximately 28.8% compared to the same period in 2025. For the six months ended June 30, 2026, revenue increased by approximately 29.7% compared to the same period in 2025, primarily driven by higher sales generated by our wholly owned subsidiaries, Decahedron Ltd, Cosmofarm S.A., and Cana S.A. Decahedron Ltd, our U.K. wholesale subsidiary, nearly doubled its revenue compared to the same period in 2025, driven by increased sales of the Company's nutraceutical and pharmaceutical products. Cana, our pharmaceutical manufacturing subsidiary, further expanded its contract manufacturing agreements and renewed existing customer relationships, resulting in a material increase in revenue. Additionally, our wholesale subsidiary, Cosmofarm S.A., was the key contributor to revenue growth, having expanded its client portfolio by adding more than 75 new pharmacies during the period, reflecting continued 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.
| 53 |
| Table of Contents |
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.
Cost of Goods Sold
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.
Gross Profit
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)
(USD) |
| As Reported |
|
| Impact of Revenue Reversal |
|
| Excluding Revenue Reversal |
| |||
Revenue |
|
| 36,914,268 |
|
|
| 802,528 |
|
|
| 37,716,796 |
|
Cost of goods sold |
|
| 34,021,435 |
|
|
| — |
|
|
| 34,021,435 |
|
Gross profit |
|
| 2,892,833 |
|
|
| 802,528 |
|
|
| 3,695,361 |
|
Gross margin |
|
| 7.8 | % |
|
| — |
|
|
| 9.8 | % |
| 54 |
| Table of Contents |
Operating Expenses
For the three months ended June 30, 2026, total operating expenses were $4,437,269, an increase of $628,136 (approximately 16.5%) compared to $3,809,133 for the same period in 2025. For the six months ended June 30, 2026, total operating expenses were $8,002,619, an increase of $1,310,542 (approximately 19.6%) compared to $6,692,077 for the same period in 2025.
Breakdown of principal expense categories:
| · | General and Administrative Expenses increased by approximately 38.6% to $2,066,053 for the three months ended June 30, 2026, compared to $1,490,485 in the prior year period. For the six months ended June 30, 2026, General and Administrative Expenses increased by approximately 30.2% to $3,866,215, compared to $2,969,187 for the same period in 2025. The increase was primarily attributable to higher audit and review fees, increased investor relations expenses incurred by Cosmos Health Inc., the parent company, and higher administrative costs at Decahedron Ltd. associated with the expansion of its operations. |
| · | Salaries and Wages decreased by approximately 0.7% to $1,855,257 for the three months ended June 30, 2026, compared to $1,868,443 in the prior year period. For the six months ended June 30, 2026, Salaries and Wages increased by approximately 11.8% to $3,252,914, compared to $2,908,462 for the same period in 2025. The change was primarily due to normal fluctuations in payroll costs, as overall headcount and salary levels remained substantially consistent with the prior year period. |
| · | Sales and Marketing Expenses increased to $98,226 for the three months ended June 30, 2026, compared to $21,706 for the same period in 2025, an increase of approximately 352.5%. For the six months ended June 30, 2026, Sales and Marketing Expenses increased to $117,578, compared to $49,861 for the same period in 2025, an increase of approximately 135.8%. The increase was primarily attributable to higher advertising and promotional expenses incurred by SkyPharm S.A. to support the marketing of its proprietary nutraceutical brands, including increased radio and television advertising costs, as well as certain corporate marketing expenses incurred by Cosmos Health Inc., the parent company. |
| · | Research and Development Costs were $68,552 for the three months ended June 30, 2026, compared to $74,637 in the same period in 2025. For the six months ended June 30, 2026, Research and Development Costs were $68,552, compared to $90,266 in the same period in 2025. R&D costs include costs incurred under agreements with third-party contract research organizations, contract manufacturing organizations and other third parties, as well as other costs associated with the Company's R&D programs. |
| · | Depreciation and Amortization decreased by approximately 1.3% to $349,181 for the three months ended June 30, 2026, compared to $353,862 in the prior year period. For the six months ended June 30, 2026, Depreciation and Amortization increased by approximately 3.4% to $697,360, compared to $674,301 for the same period in 2025. The changes were primarily due to normal fluctuations in depreciation and amortization expense, as the Company did not have significant additions or disposals of depreciable or amortizable assets during the period. Overall, depreciation and amortization remained substantially consistent with the prior year period. |
Other Income (Expense)
Total other income (expense), net, was a loss of $3,160,915 for the three months ended June 30, 2026, compared to a loss of $182,749 for the three months ended June 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 wider loss in both periods is primarily explained by the non-cash items discussed above, as follows:
| · | Non-cash Interest Expense amounted to $401,413 for the three months ended June 30, 2026, compared to $163,103 for the same period in 2025, representing an increase of $238,310, or approximately 146.1%. For the six months ended June 30, 2026, non-cash Interest Expense amounted to $791,763, compared to $163,103 for the same period in 2025, representing an increase of $628,660, or approximately 385.4%. The increase was primarily attributable to higher amortization of debt discounts associated with the Company's August 2025 convertible note. |
| · | Other Income (Expense), Net was income of $37,980 for the three months ended June 30, 2026, compared to an expense of $42,190 for the same period in 2025, representing an improvement of $80,170. For the six months ended June 30, 2026, Other Income (Expense), Net was income of $479,042, compared to an expense of $110,327 for the same period in 2025, representing an improvement of $589,369. The improvement was primarily attributable to the recognition of income related to the write-off of a Greek tax liability of Cana S.A., as well as a gain of approximately $100,000 resulting from the receipt of advances related to a building project in Canada that had previously been written off as uncollectible. |
| · | Change in Fair Value of Convertible Notes resulted in a loss of $2,384,374 for the three months ended June 30, 2026, compared to a loss of $139,592 for the same period in 2025, representing an increase in expense of $2,244,782, or approximately 1,607.0%. For the six months ended June 30, 2026, the Company recorded a loss of $2,144,894, compared to a loss of $139,592 for the same period in 2025, representing an increase in expense of $2,005,302, or approximately 1,436.4%. The increase was primarily attributable to changes in the fair value of the Company's convertible note obligations, which are remeasured at fair value each reporting period. |
| · | Change in Fair Value of Derivative Liabilities resulted in a gain of $577,347 for the three months ended June 30, 2026, compared to $nil for the same period in 2025. For the six months ended June 30, 2026, the Company recorded a gain of $809,315, compared to $nil for the same period in 2025. The gains reflect fair value adjustments related to embedded derivatives arising from the ATW convertible note agreement entered into in August 2025. |
| · | Loss on Digital Assets amounted to $404,145 for the three months ended June 30, 2026, compared to $nil for the same period in 2025. For the six months ended June 30, 2026, Loss on Digital Assets amounted to $846,584, compared to $nil for the same period in 2025. The losses resulted from the remeasurement of the Company's digital asset holdings based on changes in fair value during the period and the majority of the loss is attributable to the Company’s ETH holdings (refer to Note 17). |
| 55 |
| Table of Contents |
| · | Gain on Equity Investments was $3,650 for the three months ended June 30, 2026, compared to $2,639 for the same period in 2025, representing an increase of $1,011, or approximately 38.3%. For the six months ended June 30, 2026, the Company recorded a loss of $7,602, compared to a gain of $5,781 for the same period in 2025, representing a decrease of $13,383. These amounts reflect realized and unrealized changes in the fair value of equity investments. |
| · | Interest Expense increased to $602,364 for the three months ended June 30, 2026, compared to $388,814 for the same period in 2025, representing an increase of $213,550, or approximately 54.9%. For the six months ended June 30, 2026, Interest Expense increased to $1,025,593, compared to $575,921 for the same period in 2025, representing an increase of $449,672, or approximately 78.1%. The increase was primarily attributable to higher interest costs associated with the Company's financing arrangements, including convertible notes. The increase was mainly driven by interest expense related to the Company's August 2025 Convertible Note, which was issued during the third quarter of 2025 and therefore did not generate any interest expense during the three and six months ended June 30, 2025. Interest expense associated with this note increased the Company's overall borrowing costs during the three and six months ended June 30, 2026. |
| · | Interest Income was $45,741 for the three months ended June 30, 2026, compared to $105,787 for the same period in 2025, representing a decrease of $60,046, or approximately 56.8%. For the six months ended June 30, 2026, Interest Income was $92,414, compared to $197,113 for the same period in 2025, representing a decrease of $104,699, or approximately 53.1%. The decrease in Interest Income was primarily driven by the continued impact of the DocPharma S.A. note receivable write-off recognized in the prior year. As the related interest income from this note is no longer recognized, the reduction in interest income continued to affect the three and six months ended June 30, 2026 periods compared to the same periods in 2025. |
| · | Foreign Currency Transaction Loss, Net was $33,336 for the three months ended June 30, 2026, compared to a gain of $442,524 for the same period in 2025, representing an unfavorable change of $475,860. For the six months ended June 30, 2026, Foreign Currency Transaction Loss, Net was $346,493, compared to a gain of $618,348 for the same period in 2025, representing an unfavorable change of $964,841. The change primarily reflects fluctuations in foreign exchange rates affecting USD- and GBP-denominated balances held by entities with EUR functional currencies. |
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 (including the $2,384,374 charge from the change in fair value of convertible notes), together with higher interest expense, partially offset by the $577,347 gain on the change in fair value of the derivative liability noted above.
| 56 |
| Table of Contents |
Foreign Currency Translation Adjustment
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.
The translation losses during the three and six months ended June 30, 2026 primarily reflected fluctuations in foreign currency exchange rates, including changes in the relative value of the U.S. dollar against the euro, which impacted the USD-translated carrying values of the Company's European subsidiaries. The prior-year translation gains reflected the opposite impact of exchange rate movements, as changes in the euro-to-U.S. dollar exchange rate increased the USD value of the Company's foreign operations upon translation.
Period-to-period fluctuations in foreign currency translation gains and losses are driven by changes in 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.
Liquidity and Capital Resources
As of June 30, 2026 compared with December 31, 2025
As of June 30, 2026, the Company held total cash and restricted cash of $2,445,168, compared to $3,459,893 at December 31, 2025, reflecting net cash outflows during the six-month period ended June 30, 2026, primarily from operating and investing activities. Of the June 30, 2026 balance, $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 $1,800,949 representing unrestricted cash and cash equivalents.
Cash Flows from Operating Activities
Cash flows used in operating activities amounted to $2,785,320 for the six months ended June 30, 2026, compared to $1,396,236 for the same period in 2025. The outflow was driven primarily by the consolidated net loss of $8,891,945, partially offset by non-cash adjustments including stock-based compensation of $1,094,644, depreciation and amortization of $694,053, non-cash financing expense of $850,110, loss from the change in fair value of convertible notes of $2,144,894 and a loss on digital assets of $846,584, partially offset by gains on the change in fair value of derivative liabilities of $809,315. Working capital movements had a mixed impact, with an increase in other current liabilities providing a partial offset to the net loss, while an increase in accounts receivable, a decrease in accounts payable and accrued expenses, and increases in related party prepayments represented additional cash outflows.
Cash Flows from Investing Activities
Investing activities during the six months ended June 30, 2026, resulted in a net cash outflow of $594,358, primarily driven by the purchase of $1,100,000 in digital assets, partially offset by the return of $599,714 in advances previously made for a property acquisition. Expenditure on property and equipment and intangible assets were minimal during the period. Net cash provided by investing activities in the same period in 2025 was $64,751, with the variance driven almost entirely by the digital asset purchase, which had no equivalent in the prior year period.
Cash Flows from Financing Activities
Financing activities generated net cash inflows of $2,136,372 for the six months ended June 30, 2026, compared to $2,165,227 for the same period in 2025. The Company actively managed its lines of credit during the period, drawing $17,045,999 and repaying $17,232,393, reflecting ongoing oversight of short-term debt facilities. Proceeds from the issuance of common stock totaling $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 $129,253, repayments of notes payable of $488,859, payments of finance lease liabilities of $3,885, and the repurchase of treasury stock totaling $512,997. No proceeds were received from new note 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.
| 57 |
| Table of Contents |
Going Concern
The Company's unaudited 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 six-month period ended June 30, 2026, the Company generated revenue of $36,914,268, incurred a net loss of $8,891,945, and used $2,785,320 of net cash in operating activities. As of June 30, 2026, the Company had cash and cash equivalents of $1,800,949 and restricted cash of $644,219, compared to $715,674 and $2,744,219 as of December 31, 2025. The Company also had positive working capital of $1,825,987, an accumulated deficit of $142,059,218, and stockholders' equity of $20,674,483.
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. While the Company’s revenues have grown, they remain insufficient to fund operating expenses and meet debt obligations as they become due. Furthermore, the Company remains dependent on external financing sources to sustain operations and fund growth initiatives.
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 June 30, 2026, the Company raised capital through its At-the-Market (“ATM”) program, generating gross proceeds of approximately $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.
The proceeds from the ATM sales provide additional working capital and mitigate, to some extent, the Company’s liquidity constraints.
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.
The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Such adjustments could include the realization of assets and settlement of liabilities at amounts that may differ materially from those reflected in the accompanying condensed consolidated financial statements.
| 58 |
| Table of Contents |
Strategic Plan
Our strategic plan, which strikes a balance between growth and sustainability, emphasizes synergies, vertical integration, operational efficiencies, R&D, brand expansion, and the global growth of our distribution network and facilities.
We intend to continue to pursue active ongoing acquisitions. In fact, many of our acquisitions entail exploring opportunities, with discounted assets through business combinations or joint ventures, all to enhance our distribution network. We will expand our R&D division which is a platform and incubator to develop new patented pharmaceuticals and proprietary innovative nutraceutical products. To foster organic growth, we will enhance our business development and marketing efforts, pursue global expansion via prominent retailers, pharmacies and e-commerce platforms, and recapture lost markets such as the infant and baby care categories. In addition, we will invest in the expansion of our production capacity and global network of facilities to boost sales of our brands, engage in contract manufacturing with large multinational pharmaceutical companies, produce pharma grade ethanol for hospitals, and expand into new large markets capitalizing on our comparative advantages. Last but not least, we aim to strategically invest in key personnel, from seasoned export managers to highly skilled scientists, to ensure we have the necessary expertise at our fingertips.
Growth Strategy
Our main strategy initiative is focused on continuing our progress in becoming a global healthcare company through the development of a lean, efficient and vertically integrated operating model, as well as, to expand our portfolio of our own branded nutraceutical and pharmaceutical products, grow our customer base and achieve our growth stabilization in this new market and gain an adequate size in the global pharmaceutical market. We are committed to serving our customers while continuing to innovate and provide products that make a difference in the lives of individuals. We strive to maximize our shareholders’ value by adapting to market realities and customer needs. Our strategy involves the enhancement of our manufacturing capacities and building a multinational network or wholesalers, distributors, and pharmacies and simultaneously continuing to expand the portfolio of innovative products that we distribute to that network.
We are committed to driving organic growth at attractive margins by improving execution, optimizing cash flow and leveraging our strong market position, while maintaining a streamlined cost structure throughout each of our businesses. We continue to further align our organization to our customers’ needs in a more seamless and unified way, while supporting corporate strategy and accelerating growth.
During the three-month period ended June 30, 2026, we continued to execute on the core elements of our “Growth Strategy”, which remains as follows:
| - | High Marking Segments: delivering on our growth areas and high-margin segments, we continued to show strong performance of our key proprietary brands such as Sky Premium Life® (“SPL”), Mediterranation® and C-Sept® / C-Scrub® with launches into new fast growing geographical regions. |
|
|
|
| - | Generic Pharmaceuticals: focusing on our generic medicines’ capital with a view on a global commercial reach, focused portfolio and pipeline footprint, we continued to optimize our generics business and build a strong pipeline that will allow us to leverage our assets, know-how and sales network. |
|
|
|
| - | Manufacturing of Pharmaceuticals: directing our manufacturing business by optimizing our production facilities and establishing a global footprint in the pharmaceutical fields of contract manufacturing organization (CMO) and contract development and manufacturing organization (CDMO). |
|
|
|
| - | Global Networks, leveraging our extensive global network to access new markets and business segments, amplifying our reach and impact. We aim to expand and consort our sales distribution networks of our proprietary brands through strategic agreements in new regions and territories, such as the UAE and other GCC countries, Eastern Europe etc., while strengthening our market share in core markets. |
|
|
|
| - | Corporate Reorganization: through vertical integration and efficiency, a corporate reorganization is underway to streamline costs and enhance asset and resource utilization through the integration of business units. A key component of this plan is to achieve operational efficiencies and economies of scale through organic growth and a cost optimization initiative aimed at significantly reducing recurring operating expenses and while maintaining the Company's growth outlook. |
|
|
|
| - | Innovation: stepping up innovation through taken steps to deliver innovative products pipeline, by accelerating our R&D efforts on IP-driven products such as the CCX0722 obesity and weight management pill, CCDL24 an innovative treatment for gastrointestinal disorders, CNS, Prostate, Ovarian and Colorectal cancer treatments. Finally, our recently acquired AI-driven drug repurposing platform “Cloudscreen®”, aims to address major health challenges in various treatment areas. |
We have made several strategic acquisitions of companies, products and technologies to complement our internal growth and expertise. These acquisitions have strengthened our core product technology infrastructure by providing additional manufacturing, marketing, and research and development capabilities, including the ability to manufacture our products, other product components and services.
| 59 |
| Table of Contents |
While the Company intends to pursue these milestones, there may be circumstances where for valid business reasons or due to factors beyond the control of the Company, a reallocation of efforts may be necessary or advisable.
The Company intends to spend the funds available to strengthen working capital, inventories, intangible assets, acquisitions, research and development, sales and marketing expenses. Due to the uncertain nature of the industry in which the Company operates, projects may be frequently reviewed and reassessed. Accordingly, while it is currently intended by management that the available funds will be expended as set forth above, actual expenditures may in fact differ from these amounts and allocations.
Product Portfolio
Our product portfolio includes generics and over-the-counter (“OTC”) pharmaceutical products, innovative medicines, as well as nutraceuticals and biocides. This structure enables strong alignment and integration between manufacturing, operations, commercial regions, research & development and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas and physical wellbeing.
Generic Medicines
Generic medicines are the chemical and therapeutic equivalents of originator medicines and are typically more affordable in comparison to the originator’s products. Generic medicines are required to meet similar governmental requirements as their brand-name equivalents, such as those relating to current Good Manufacturing Practices (“GMP”), manufacturing processes and health authorities’ inspections, and must receive regulatory approval prior to their sale in any given country. Generic medicines may be manufactured and marketed if relevant patents on their brand-name equivalents (and any additional government-mandated market exclusivity periods) have expired.
We develop, manufacture and sell generic medicines in a variety of dosage forms, including tablets, capsules, liquids, ointments and creams.
Our portfolio of generic medicines includes: 1) ASTO-CHOL (Pravastatin); 2) Diorium (Omeprazole); 3) HEART-FREE (Clopidogrel); 4) the LIPICHOL (Atorvastatin); 5) Miltus (Donepezil); 6) Newzypra (Olanzapine); 7) the PNEUMO-KAST (Montelukast); 8) Sahar (Pioglitazone); 9) VIVALCID (Leucovorin); and 10) the Diabit-is (Sitagliptin).
Nutraceuticals
Nutraceuticals is referring to a broad range of products derived from food sources that provide health benefits in addition to their basic nutritional value. While nutraceuticals are not classified as drugs, they are often used for their therapeutic effects in a manner similar to pharmaceuticals.
Our proprietary nutraceutical brands are Sky Premium Life® (“SPL”) and Mediterranation®. Our portfolio currently includes around 165 SKUs and more specifically product codes such as Vitamins and Minerals, Amino Acids, Botanical and other Herbal extracts used for health prevention and care needs.
Biocides
Our proprietary portfolio of branded biocides and antiseptic soaps comprises of our brands C-Sept® and C-Scrub®. The biocide C-Sept Pro 2% has a broad-spectrum antimicrobial formulation that combines 76% Isopropyl Alcohol and 2% chlorhexidine digluconate as active substances. On the other hand, our antiseptic soap, C-Scrub Wash 4% CHG, contains chlorhexidine digluconate as its active antiseptic substance, which is approved by the World Health Organization for human use. The broad antimicrobial spectrum of C-Scrub Wash 4% CHG encompasses Gram-positive and Gram-negative microbes, fungi, and viruses, and its efficacy has been demonstrated in numerous published clinical studies. C-Scrub Wash 4% CHG significantly reduces bacterial load on the skin with long lasting.
Other Pharmaceutical Products:
Our portfolio of other pharmaceutical products includes brands such as:
| - | Melatonin Spray®; |
|
|
|
| - | Otikon™; and |
|
|
|
| - | Bio-bebe®. |
| 60 |
| Table of Contents |
Melatonin Spray®, is recommended for addressing insomnia and jet lag, offering a peaceful sleep. It is manufactured using nanonemulsification technology and primarily contains melatonin, a lipophilic molecule. To increase the absorption of such molecules, nanoemulsification is one of the most effective methods. The absorption of the ingredient increases proportionally with the reduction of the micelle diameter. The diameter of a nanoemulsion micelle ranges between 50 and 300nm.
Otikon™ ear drops, is a class II medical device in the form of ear drops for spray application and contains natural ingredients used to relieve ear pain, remove excess ear wax (cerumen) and improve hearing. The efficacy and safety of Otikon™ ear drops, or naturopathic drops, has been studied in children with ear pain associated with otitis media. Among other ingredients, it contains olive oil, mullein olive oil extract (Verbascum Thapsus), marigold oil extract (Calendula officinalis), St. John’s wort oil extract (Hypericum perforatum) and lavender oil (Lavandula officinalis).
Bio-bebe® is an organic infant care and nutrition brand. All product lines are made exclusively of 100% organic, high-quality ingredients, and are produced with minimal environmental impact. The range includes a variety of baby foods such as organic powder milk, pear, carrot and banana purée, pasta with minced meat, whole grain rice cereals, whole grain cereal porridges and organic rice creams with vanilla milk. Additional brand extensions include baby cosmetics, liquid dish soaps and detergents.
In line with our growth strategy, we are constantly evaluating and optimizing our products portfolio, including through the sale of certain product rights in our operating or entering areas.
Contractual Obligations
We have no significant contractual arrangements other than those noted in our financial statements.
Off Balance Sheet Arrangements
As of June 30, 2026, there were no off-balance sheet arrangements.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most “critical accounting polices” under the Management’s Discussion and Analysis section. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Revenue Recognition: The Company adopted Topic 606 Revenue from Contracts with Customers on January 1, 2018. As a result, it has changed its accounting policy for revenue recognition as detailed in Note 2.
Foreign Currency. Assets and liabilities of all foreign operations are translated at period-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the period. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity until the entity is sold or substantially liquidated. Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency) are included in net (loss) earnings.
Income Taxes. The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes, ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company is liable for income taxes in Greece and the United Kingdom. The corporate income tax rate is 22% in Greece (tax losses are carried forward for five years effective January 1, 2013) and 25% in United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.
We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets.
We recognize the impact of an uncertain tax position in our financial statements if, in management’s judgment, the position is not more-likely-than-not sustainable upon audit based on the position’s technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for an uncertain tax position is necessary. We operate and are subject to audit in multiple taxing jurisdictions.
We record interest and penalties related to income taxes as a component of interest and other expense as incurred, respectively.
| 61 |
| Table of Contents |
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
The Company has net operating loss carry-forwards in our parent, Cosmos Health Inc., which are applicable to future taxable income in the United States (if any). Additionally, the Company has income tax liabilities in the United Kingdom. The income tax assets and liabilities are not able to be netted. We therefore reserve the income tax assets applicable to the United States but recognize the income tax liabilities in Greece and the United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.
Accounts Receivable and Allowance for Credit Losses
The Company follows ASC 310 to estimate the allowance for doubtful accounts. Pursuant to FASB ASC paragraph 310-10-35-9, losses from uncollectible receivables shall be accrued when both of the following conditions are met: (a) information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that it is probable that an asset has been impaired at the date of the financial statements, and (b) the amount of the loss can be reasonably estimated. Those conditions may be considered in relation to individual receivables or in relation to groups of similar types of receivables. If the conditions are met, accrual shall be made even though the receivables that are uncollectible may not be identifiable. The Company reviews individually each trade receivable for collectability and performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and general economic conditions that may affect a client’s ability to pay. Bad debt expense is included in general and administrative expenses, if any.
Inventory Reserves
Our merchandise inventories are made up of finished goods and are valued at the lower of cost or market using the weighted-average cost method. Average cost includes the direct purchase price, net of vendor allowances and cash discounts, of merchandise inventory. We record valuation reserves on an annual basis for merchandise damage and defective returns, merchandise items with slow-moving or obsolescence exposure and merchandise that has a carrying value that exceeds market value. These reserves are estimates of a reduction in value to reflect inventory valuation at the lower of cost or market. The reserve for merchandise returns is based upon the determination of the historical net realizable value of products sold from our returned goods inventory or returned to vendors for credit. Our reserve for merchandise returns includes amounts for returned product on-hand as well as for new merchandise on-hand that we estimate will ultimately become returned goods inventory after being sold based on historical return rates.
Convertible Promissory Note
As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“ASC 825”), the Company elects to account for its convertible promissory note, which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value are recorded as a component of non-operating loss in the condensed consolidated statements of operations. This election is made on an instrument-by-instrument basis as permitted under ASC 825. The portion of total changes in fair value of the convertible promissory note attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income in the accompanying condensed Consolidated Statements of Operations and Comprehensive Income (Loss). As a result of electing the fair value option, direct costs and fees related to the convertible promissory note are expensed as incurred.
The Company estimates the fair value of the convertible promissory note using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration of the convertible promissory note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, we estimate our expected future volatility based on the actual volatility of our common stock and historical volatility of our common stock utilizing a lookback period consistent with the time to expiration. The time to expiration is based on the contractual maturity date, giving consideration to the voluntary, mandatory and potential accelerated redemption scenarios. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using Bloomberg's Default Risk function which uses our financial information to calculate a default risk specific to the Company.
Digital Assets
The Company's digital assets are initially recorded at cost and are subsequently measured at fair value as of each reporting period. The Company determines the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement, based on quoted prices in its principal market for Ethereum (Level 1). Changes in fair value are recognized as incurred in the Company's condensed consolidated statement of income (loss) and comprehensive income (loss), as “Gain (loss) on digital assets,” within non-operating (income) and expenses, net.
Updated share information
As of June 30, 2026, we had 83,407,714 shares of our common stock issued and 80,671,717 shares outstanding. In addition, there were 34,209,667 common shares issuable upon the conversion of our outstanding convertible notes and the exercise of our outstanding warrants.
| 62 |
| Table of Contents |
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable. A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were ineffective due to material weaknesses stated below:
| · | The Company does not have an adequate level of supervision and segregation of duties. |
|
|
|
| · | The Company lacks effective design and operation of controls over certain information technology general controls (ITGCs), including segregation of incompatible duties, program change management, and user access controls. |
We continue to work on remediating the material weaknesses identified in our internal controls. Pursuant to this initiative, we have engaged a third-party consultant to assist in the design and implementation of controls, as well as in the evaluation of current gaps and procedures. As of the filing date of this quarterly report, the consultant's evaluation remains ongoing, and a final report has not yet been received. We will provide a further update on the status of our remediation efforts in subsequent filings as the process advances.
- The Company does not have an adequate level of supervision and segregation of duties.
We are in the process of updating the organizational chart in order to reallocate roles among personnel and emphasize sharing the responsibilities of key business processes by distributing the discrete functions of these processes to multiple people and departments.
- The Company lacks effective design and operation of controls over certain information technology general controls (ITGCs), including segregation of incompatible duties, program change management, and user access controls.
We are in the process of updating our organizational structure to reallocate roles among personnel. Our goal is to emphasize the necessity of sharing the responsibilities with respect to key business processes by distributing the discrete functions of these processes to multiple people and departments. As the Company grows and additional resources become available, management plans to expand the finance team and reassign responsibilities to achieve more effective separation of duties. Enhanced management review procedures have been implemented immediately.
Our management is committed to maintaining a strong internal control environment. Management is taking comprehensive actions to remediate the material weakness related to ineffective design and operation of controls over certain ITGCs, which include the following:
| · | We will continue to reassess staffing and add additional resources, as required, with the requisite experience and training, to support our system of internal control; |
|
|
|
| · | Implement a training program for all personnel responsible for internal controls over financial reporting, including educating control owners regarding the requirements of each control. |
|
|
|
| · | For control owners with IT responsibilities, develop and implement additional training and awareness programs addressing ITGC policy and requirements, with a specific focus on user access and change management processes and controls; |
|
|
|
| · | Continue to enhance, standardize and monitor the ongoing improvements in design and operating effectiveness of our controls and the adherence of our personnel to any enhancements in controls, policies, and procedures. |
|
|
|
| · | With our IT environment, increase the extent of oversight and verification checks included in the operation of user access and program change management controls and processes. |
We believe the foregoing efforts will effectively remediate the identified material weakness in internal controls over financial reporting. Because the reliability of the internal control process requires repeatable execution, the successful remediation will require review and evidence of effectiveness prior to management concluding that the Company’s internal controls over financial reporting are effective. We may also conclude that the additional measures may be required to remediate the material weakness which may necessitate additional implementation and evaluation time. We will continue to assess the effectiveness of our internal control over financial reporting and take steps to remediate the material weakness expeditiously.
| 63 |
| Table of Contents |
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
Our Audit Committee is in the process of evaluating our existing controls and procedures, while communicating with the Management on quarterly basis.
Audit Committee
We have a separately designated standing audit committee, which is appointed by the Board of Directors of Cosmos Health Inc. On April 28, 2022, Dr. Anastasios Aslidis was elected to serve on the Board of Directors and was appointed as chair of the Audit Committee. Our three independent directors, Anastasios Aslidis, John Hoidas and Demetrios Demetriades serve on the Audit Committee. The primary function of the committee is to assist the Board of Directors in overseeing (1) the financial reporting and accounting processes of the Company, and (2) the financial statements audits of the Company. The Committee also prepares a written report to be included in the annual proxy statement of the Company pursuant to the applicable rules and regulations of the “SEC”. In furtherance of these purposes, the Committee shall maintain direct communication among the Company’s independent auditors and the Board of Directors. The independent auditors and any other registered public accounting firm engaged in preparing or issuing an audit report or performing other audit review or attest services for the Company shall report directly to the Committee and are ultimately accountable to the Committee and the Board of Directors.
In discharging its oversight role, the Committee is authorized to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Committee shall have the sole authority to retain at the Company’s expense outside legal, accounting or other advisors to advise the Committee and to receive appropriate funding, as determined by the Committee, from the Company for the payment of the compensation of such advisors and for the payment of ordinary administrative expenses of the Committee that are necessary to carry out its duties. The Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditors to attend a meeting of the Committee or to meet with any member of, or advisors to, the Committee. The Committee may also meet with the Company’s investment bankers or financial analysts who follow the Company.
The Committee shall meet no less frequently than four times per year, with additional meetings as circumstances warrant. The Committee shall also meet periodically with management, the internal auditors, if any, and the independent auditors in separate executive sessions. The Committee shall record the minutes of all such meetings and shall submit the minutes of its meetings to, or discuss the matters deliberated at each meeting with, the Board of Directors. The Company’s chief financial or accounting officer shall function as the management liaison officer to the Committee.
| 64 |
| Table of Contents |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There have been no material changes since the filing of the Company’s Form 10-K for the year ended December 31, 2025. From time to time, we may become involved in various disputes and litigation matters that arise in the ordinary course of business. For more information, refer to Note 15. Commitments and Contingencies in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Item 1A. 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None. Previously reported on Form 8-K.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the six months ended June 30, 2026, no director or officer of the Company
| 65 |
| Table of Contents |
Item 6. Exhibits.
(a) Exhibits.
Exhibit No. | Document Description | |
|
|
|
31.1* |
| Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| |
31.2* |
| Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1* |
| Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| ||
32.2* | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| ||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).** | |
| ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document.** | |
| ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.** | |
| ||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.** | |
| ||
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document.** | |
| ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.** | |
| ||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).** |
_____________
* | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings. |
| |
** | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| 66 |
| Table of Contents |
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Cosmos Health Inc. | |||
| |||
Date: August 18, 2026 | By: | /s/ Grigorios Siokas | |
Grigorios Siokas | |||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Date: August 18, 2026 | By: | /s/ Georgios Terzis |
|
Georgios Terzis |
| ||
| Chief Financial Officer |
| |
| (Principal Financial Officer, And Principal Accounting Officer) |
|
| 67 |
| Table of Contents |
EXHIBIT INDEX
Exhibit No. | Document Description | |
|
|
|
31.1* |
| Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| |
31.2* |
| Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1* |
| Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| ||
32.2* | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| ||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).** | |
| ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document.** | |
| ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.** | |
| ||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.** | |
| ||
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document.** | |
| ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.** | |
| ||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).** |
___________
* | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings. |
| |
** | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| 68 |