# EDGAR Filing Document

**Accession Number:** 0002030763
**File Stem:** 0001641172-25-025830
**Filing Date:** 2025-8
**Character Count:** 811626
**Document Hash:** 031a22fd41108f4a9268958cf292b99c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-025830.hdr.sgml**: 20250829

**ACCESSION NUMBER**: 0001641172-25-025830

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 52

**FILED AS OF DATE**: 20250829

**DATE AS OF CHANGE**: 20250828

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Wellgistics Health, Inc.
- **CENTRAL INDEX KEY:** 0002030763
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 933264234
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-288932
- **FILM NUMBER:** 251274981

**BUSINESS ADDRESS:**
- **STREET 1:** 3000 BAYPORT DRIVE SUITE 950
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33607
- **BUSINESS PHONE:** 1-843-302-1785

**MAIL ADDRESS:**
- **STREET 1:** 3000 BAYPORT DRIVE SUITE 950
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33607

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Danam Health, Inc
- **DATE OF NAME CHANGE:** 20240717

**As filed with the U.S. Securities and Exchange Commission on August 28, 2025**

**Registration No. 333-288932** 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Amendment No. 1**

**to**

**FORM S-1**

**REGISTRATION STATEMENT**

**UNDER THE SECURITIES ACT OF 1933**

**Wellgistics Health, Inc.**

(Exact name of registrant as specified in its charter.)

<u>Delaware</u> <u>8090</u> <u>93-3264234</u> <br> (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Number) (IRS Employer Identification No.)

3000 Bayport Drive

Suite 950

Tampa, FL 33607

<u>844-203-6092</u> 

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Brian Norton

3000 Bayport Drive

Suite 950

Tampa, FL 33607

<u>844-203-6092</u>

(Name, address, including zip code and telephone number, including area code, of agent for service)

Copies to:

Kate L. Bechen

Louis D. Kern

Dykema Gossett PLLC

111 E. Kilbourn Ave., Suite 1050

Milwaukee, WI 53202

(414) 488-7300

As soon as practicable after the effective date of this Registration Statement.

(Approximate date of commencement of proposed sale to the public)

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark 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 7(a)(2)(B) of the Securities Act. ☐

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.**

**The information in this preliminary prospectus is not complete and may be changed. The registrant named in this preliminary prospectus may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any state where the offer or sale is not permitted.**

**PRELIMINARY PROSPECTUS - SUBJECT TO COMPLETION, DATED AUGUST 28, 2025**

![](formdrs_001.jpg)

**Wellgistics Health, Inc.**

**Up to Shares of Common Stock**

**Warrants to Purchase up to Shares of Common Stock**

**Pre-Funded Warrants to Purchase up to Shares of Common Stock**

**Placement Agent Warrants to Purchase up to Shares of Common Stock**

**Up to Shares of Common Stock Underlying the Warrants, Pre-Funded Warrants and Placement Agent Warrants**

Wellgistics Health, Inc. (the "**Company**," "**we**," "**our**," and "**us**") are offering up to shares of our Common Stock, par value $0.0001 per share (the "**Common Stock**"), together with accompanying warrants (the "**Warrants**") to purchase up to shares of Common Stock. The assumed combined public offering price for each share of Common Stock, together with one Warrant to purchase one share of Common Stock, is $, which is equal to the last reported sale price of our common stock on the Nasdaq Capital Market on , 2025. The shares of Common Stock and Warrants will be separately issued. Each Warrant will have an exercise price of $ per share, will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the Warrants (the "**Warrant Stockholder Approval**"), provided, however, if the Pricing Conditions (as defined below) are met, the Warrants will be exercisable upon issuance (the "**Initial Exercise Date**") and will expire on the five-year anniversary of the Initial Exercise Date. As used herein "**Pricing Conditions**" mean that the combined offering price per share and accompanying Warrant is such that the Warrant Stockholder Approval is not required under the rules of The Nasdaq Stock Market LLC ("**Nasdaq**") because either (i) the offering is an at-the-market offering under Nasdaq rules and such price equals or exceeds the sum of (a) the applicable "Minimum Price" per share under Nasdaq Rule 5635(d) plus (b) $0.125 per whole share of common stock underlying the Warrants or (ii) the offering is a discounted offering where the pricing and discount (including attributing a value of $0.125 per whole share underlying the Warrants) meet the pricing requirements under Nasdaq's rules.

We are also offering up to pre-funded warrants (the "**Pre-Funded Warrants**"), together with accompanying Warrants to purchase up to shares of Common Stock, to those purchasers whose purchase of shares of Common Stock in this offering would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock following the consummation of this offering in lieu of the shares of Common Stock that would result in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%). Each Pre-Funded Warrant will be exercisable for one share of Common Stock at an exercise price of $0.0001 per share. The Pre-Funded Warrants will be exercisable upon issuance and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrants and accompanying Warrants are immediately separable and will be issued separately in this offering, but must be purchased together in this offering. The assumed combined public offering price for each such Pre-Funded Warrant and accompanying Warrant is $, which is equal to the last reported sale price of our Common Stock on Nasdaq on , 2025, minus $0.0001. This prospectus also relates to the offering of the shares of Common Stock issuable upon exercise of the Warrants, Pre-Funded Warrants and Placement Agent Warrants (as defined herein). For each Pre-Funded Warrant sold, the number of shares of Common Stock sold will be reduced on a 1-for-1 basis.

The actual public offering price per share of Common Stock will be determined between us, the Placement Agent (as defined below), and the investors in the offering at the time of pricing, and may be at a discount to the current market price of our Common Stock. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final offering price.

Our Common Stock is traded on the Nasdaq Capital Market under the symbol "WGRX". The last reported sale price of our Common Stock on Nasdaq on August 27, 2025, was $1.73 per share. There is no established public trading market for the Warrants or the Pre-Funded Warrants, and we do not expect a market to develop. We do not intend to apply for listing of the Warrants or the Pre-Funded Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Warrants and the Pre-Funded Warrants will be limited.

This offering will terminate on , 2025, unless we decide to terminate the offering (which we may do at any time in our discretion) prior to that date. We will have one closing for all the securities purchased in this offering. The public offering price per share of common stock (or pre-funded warrant) and accompanying Warrant will be fixed for the duration of this offering.

We have engaged (the "**Placement Agent**"), to act as our exclusive placement agent in connection with this offering. The Placement Agent has agreed to use its reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The Placement Agent is not purchasing or selling any of the securities we are offering and the Placement Agent is not required to arrange the purchase or sale of any specific number of securities or dollar amount. We have agreed to pay to the Placement Agent the Placement Agent fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus. There is no minimum number of securities or amount of proceeds required as a condition to closing in this offering. Because there is no minimum offering amount required as a condition to closing this offering, we may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to pursue our business goals described in this prospectus. In addition, because there is no escrow trust or similar arrangement and no minimum offering amount, investors could be in a position where they have invested in our company, but we are unable to fulfill all of our contemplated objectives due to a lack of interest in this offering. Further, any proceeds from the sale of securities offered by us will be available for our immediate use, despite uncertainty about whether we would be able to use such funds to effectively implement our business plan. We will bear all costs associated with the offering. See the section of this prospectus entitled "*Plan of Distribution*" on page 55 of this prospectus for more information regarding these arrangements.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

We are an "emerging growth company" and a "smaller reporting company," each as defined under the federal securities laws and, as such, have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings. See the sections of this prospectus entitled "*Implications of Being an Emerging Growth Company" and "*Implications of Being* a Smaller Reporting Company*."

**Investing in our securities involves a high degree of risks. See the section of this prospectus entitled "*Risk Factors*" beginning on page 6 of the prospectus. You should carefully consider these risk factors, as well as the information contained in this prospectus and in the documents incorporated by reference into this prospectus, before you invest.**

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.**

---

| | | |
|:---|:---|:---|
|  | **Per Pre-Funded Warrant and accompanying Warrant<sup>(2)</sup>** | **Total<sup>(2)</sup>** |
| Public Offering Price | $— | $|
| Placement Agent Fees<sup>(1)</sup> | $— | $|
| Proceeds, Before Expenses, to us | $— | $|

---

(1) We have agreed to pay the Placement Agent a total cash fee equal to 7.0% of the gross proceeds raised in this offering. We have also agreed to reimburse the Placement Agent for its legal fees and expenses and other out-of-pocket expenses in an amount up to $100,000, and for its clearing expenses in the amount of $15,950. In addition, we have agreed to issue to the Placement Agent, or its designees, warrants to purchase a number of shares of Common Stock equal to 7.0% of the aggregate number of shares of Common Stock and Pre-Funded Warrants sold to the investors in this offering at an exercise price equal to 125% of the public offering price per share of Common Stock and accompanying Warrant (the "**Placement Agent Warrants**"). We refer you to "*Plan of Distribution*" on page 55 of this prospectus for additional information regarding Placement Agent compensation.

(2) Because there is no minimum number of securities or amount of proceeds required as a condition to closing in this offering, the actual public offering amount, Placement Agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering amounts set forth above.

The delivery of the securities offered hereby is expected to be made on or about , 2025, subject to satisfaction of certain customary closing conditions.

The date of this prospectus is , 2025

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | Page |
| [ABOUT THIS PROSPECTUS](#a_002) | 1 |
| [PROSPECTUS SUMMARY](#a_003) | 2 |
| [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#a_004) | 4 |
| [THE OFFERING](#a_005) | 5 |
| [RISK FACTORS](#a_006) | 6 |
| [USE OF PROCEEDS](#a_007) | 11 |
| [CAPITALIZATION](#mi_001) | 12 |
| [DILUTION](#a_008) | 13 |
| [INDUSTRY AND MARKET DATA](#a_009) | 14 |
| [BUSINESS](#ggg_001) | 14 |
| [DESCRIPTION OF SECURITIES WE ARE OFFERING](#a_010) | 35 |
| [UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION](#a_011) | 41 |
| [MANAGEMENT](#ma_001) | 47 |
| [Director Compensation](#ma_002) | 51 |
| [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#a_012) | 51 |
| [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS](#ma_003) | 52 |
| [PLAN OF DISTRIBUTION](#a_013) | 55 |
| [LEGAL MATTERS](#a_014) | 58 |
| [EXPERTS](#a_015) | 58 |
| [INFORMATION INCORPORATED BY REFERENCE](#a_016) | 59 |
| [WHERE YOU CAN FIND MORE INFORMATION](#a_017) | 59 |
| [INDEX TO CONSOLIDATED FINANCIAL STATEMENTS](#a_018) | F-1 |

---

i

**ABOUT THIS PROSPECTUS**

As used in this prospectus, unless the context otherwise requires, references to "**Wellgistics Health**," the "**Company**," "**we**," "**us**," "**our**" and similar terms refer to Wellgistics Health, Inc., a Delaware corporation, and our consolidated subsidiaries. References to shares of "**Common Stock**" refer to shares of our common stock, par value $0.0001 per share.

We are offering to sell, and seeking offers to buy, shares of our Common Stock only in jurisdictions where such offers and sales are permitted. The distribution of this prospectus and the offering of our Common Stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our Common Stock and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.

You should rely only on the information contained in this prospectus, any related free-writing prospectus, and any prospectus to which we have referred you. Neither we nor the Placement Agent has authorized any other person to provide you with information different from that contained in this prospectus, any post-effective amendment, or any applicable prospectus supplement prepared by or on behalf of us or to which we have referred you. We and the Placement Agent take no responsibility for and can provide no assurance as to the reliability of any other information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate only as of its date, regardless of the time of delivery of this prospectus or any sale of our Common Stock. Our business, financial condition, results of operations and prospects may have changed since those dates. Neither the delivery of this prospectus, nor any sale or delivery of our Common Stock, shall under any circumstances, imply that there has been no change in our affairs since the date of this prospectus. You should not assume that the information appearing in this prospectus any post-effective amendment, and any applicable prospectus supplement to this prospectus is accurate as of any date other than their respective dates. This prospectus will be updated and made available for delivery to the extent required by the federal securities laws.

We incorporate by reference important information into this prospectus. You may obtain the information incorporated by reference without charge by following the instructions under the section of this prospectus entitled "*Where You Can Find More Information*." You should carefully read this prospectus as well as the additional information described under the section of this prospectus entitled "*Information Incorporated By Reference*" before deciding to invest in our securities.

This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section of this prospectus entitled "*Where You Can Find More Information*."

**PROSPECTUS SUMMARY**

*This summary highlights information contained elsewhere in this prospectus or that is incorporated by reference herein. This summary does not contain all of the information you should consider before investing in our Common Stock. Before deciding to invest in our Common Stock, you should read this entire prospectus carefully, including the section of this prospectus entitled "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the SEC, and those risk factors identified in reports subsequently filed with the SEC, including our Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus.*

**Overview** 

Founded in 2022, we are a holding company for existing and future planned operating companies centered around pharmaceuticals and healthcare services. Currently, we exist as a holding company conducting business through two wholly owned subsidiaries— Wood Sage LLC ("**Wood Sage**") and Wellgistics, LLC—and two indirect subsidiaries—Wellgistics Tech & Hub, LLC (f/k/a Alliance Pharma Solutions LLC d/b/a DelivMeds) ("**Wellgistics Tech & Hub**") and Wellgistics Pharmacy, LLC (f/k/a Community Specialty Pharmacy, LLC) ("**Wellgistics Pharmacy**").

In January 2023, we entered into a Membership Interest Purchase Agreement (the "**Wood Sage MIPA**") with Nikul Panchal, an individual resident of the State of Florida in connection with our acquisition of Wood Sage (the "**Wood Sage Acquisition**"). We completed the Wood Sage Acquisition on June 16, 2024. Wood Sage is a holding company formed as a limited liability company formed under the laws of Florida on June 27, 2014, holding all of the equity interests in Wellgistics Tech & Hub, a company focusing on back-end healthcare technology, and Wellgistics Pharmacy, a community pharmacy.

In May 2023, we entered into a Membership Interest Purchase Agreement with Wellgistics, LLC and its owners, Strategix Global LLC, Nomad Capital LLC, Jouska Holdings LLC, and Brian Norton (the "**Wellgistics MIPA**"), whereby we agreed to acquire all of the issued outstanding membership interests of Wellgistics, LLC (the "**Wellgistics Acquisition**"). Wellgistics, LLC was founded in 2013, and is a distributor of pharmaceutical products. After negotiating and executing subsequent amendments to the Wellgistics MIPA, we closed on the Wellgistics Acquisition on August 30, 2024. We have entered into several amendments to the Wellgistics MIPA after closing on the Wellgistics Acquisition as detailed in the sections of this prospectus entitled "*Business," "Unaudited Pro Forma Combined Financial Information*" and "*Certain Relationships and Related Person Transactions*."

In April 2025, we entered into an Agreement and Plan of Merger (the "**Peek Merger Agreement**") by and among Wellgistics Health, Inc., Wellpeek Merger Sub 1, Inc. ("**Merger Sub 1**"), Wellpeek Merger Sub 2, LLC ("**Merger Sub 2**" and together with Merger Sub 1, the "**Merger Subs**"), Peek Healthcare Technologies, Inc. ("**Peek**"), and the Stockholder Representative (as defined in the Peek Merger Agreement) whereby we will acquire Peek, a pioneering digital prescription platform, and its subsidiaries, Lumina Marketing, LLC ("**Lumina Marketing**") and Lumina Therapeutics, LLC ("**Lumina Therapeutics**" and, together with Lumina Marketing, the "**Lumina Entities**"), that provide a range of consulting services to brand-name and specialty-lite drug manufacturers in the areas of market access, branding, and commercialization.

We seek to be a micro health ecosystem, with a portfolio of companies consisting of a pharmacy, wholesale operations, and a technology division that provides a novel platform for hub and clinical services. We are focused on improving the lives of patients while delivering unique solutions for pharmacies, providers, pharmaceutical manufacturers, and payors. With the successful integration of our patient-centric approach and innovative healthcare applications, we intend to shift the dynamic of pharmaceutical care to revolve around the patient for a wide range of therapeutic conditions by offering a full spectrum of integrated solutions as a result of leveraging the synergies of our business segments to address access, care coordination, dispensing, delivery, and clinical management of pharmaceutical products ranging from "specialty-lite" to general maintenance conditions.

**Recent Developments**

***XRP Treasury Strategy***

 ****

**WE ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT.**

In addition to our core pharmaceutical distribution and healthcare services operations through Wellgistics, LLC, Wellgistics Pharmacy, and Wellgistics Tech & Hub, our management team anticipates executing on a strategic plan to integrate blockchain-based technologies within our existing ecosystem in an attempt to improve our payment infrastructure. In this regard, we expect to implement in the near future a payment solution leveraging the XRP Ledger (XRPL) to facilitate secure, low-cost, real-time payments between the Company, our pharmacy customers, and our manufacturer and vendor partners. This represents an initial phase of our broader strategy to incorporate decentralized technologies that we hope will enhance speed, transparency, and cost-efficiency in the healthcare supply chain. We are actively working to implement this system during the third quarter of 2025, and plan to evaluate additional applications, including smart contracts, claim reconciliation, and direct-to-patient fulfillment.

In this regard, we intend to adopt XRP as a treasury reserve asset on an ongoing basis, subject to market conditions and our anticipated cash needs. Our strategy includes acquiring and holding XRP using cash flows that exceed working capital requirements, and from time to time, subject to market conditions, issuing equity or debt securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase XRP. We expect that we will continue to accumulate XRP after adopting it as our primary treasury reserve asset. We have not set any specific target for the amount of XRP we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional XRP purchases. This overall strategy also contemplates that we may periodically sell XRP for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, enter into additional capital raising transactions, including those that could be collateralized by our XRP holdings, and consider pursuing strategies to create income streams or otherwise generate funds using our XRP holdings.

This section summarizes our current treasury strategy for XRP, including our XRP holdings, trading execution, custody, storage and accounting considerations. We reserve the right to update and alter our treasury strategy from time to time. We view XRP as a reliable store of value and a compelling investment. We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability.

XRP, which operates as a digital payment and settlement asset on the XRP ledger, is a primary component of our treasury strategy. We view XRP as a digital asset with the potential for global adoption, which has specific utility in financial settlements, specifically as a bridge asset for exchanging different fiat currencies. The total supply of XRP is limited, with 100 billion tokens available and a significant portion—approximately 50 billion tokens held in escrow by Ripple Labs, Inc. XRP is released programmatically to ensure liquidity and minimize market disruption. Within the past year from the date of this prospectus, XRP traded within a range of less than $0.55 to above $3.60 per token, of which price volatility is influenced by market conditions, adoption rates, and regulatory developments.

Our intended XRP treasury strategy is subject to regulatory scrutiny. The SEC has previously initiated legal proceedings against Ripple Labs, Inc. alleging that XRP constitutes an unregistered security under the Securities Act of 1933, as amended. A federal court partially ruled on that case determining that XRP is not deemed a security in secondary transactions, but certain sales of XRP to certain buyers (but not other types of sales to other buyers) did involve securities. In October 2024, the SEC appealed this decision. In late March of 2025, senior executives of the promoters of XRP announced on social media platforms that the SEC had agreed to abandon its appeal without conditions in connection with its settlement agreement with the SEC, which is subject to finalization. On April 10, 2025, the promoters of XRP and the SEC filed a joint motion to pause the judicial proceedings. On April 16, 2025, the Second Circuit granted the joint motion and ordered the SEC to file a status report within 60 days. On May 8, 2025 the promoters of XRP and the SEC entered into a settlement agreement, which provided that, among other things, the parties would jointly request the district court to issue an indicative ruling as to whether it would dissolve an August 7, 2024, injunction and order the escrow account to be released, with $50 million ultimately being paid by the promoters of XRP as a civil penalty to the SEC.

If XRP is deemed a security, secondary transactions may be significantly impacted. Trading platforms that facilitate XRP transactions will need to register as national securities exchanges or operate as alternative trading systems to comply with the Exchange Act. As a result, many platforms may delist XRP in that event, which will reduce market liquidity and increase transaction costs. In addition, institutional participants might reduce trading activity due to increased regulatory scrutiny, which further affects liquidity.

***Integration of Blockchain Payments***

We intend to integrate blockchain payment solutions into our platform to accept payments in XRP. Our management expects that this capability will expand customer payment options while enabling us to hold and transact in these assets directly.

**Corporate Information**

The mailing address of our principal executive office is 3000 Bayport Drive, Suite 950 Tampa, FL 33607, and our office's telephone number is (844) 203-6092. Our website is located at www.wellgisticshealth.com. Information found on, or accessible through, our website is not a part of, and is not incorporated into this prospectus and any prospectus supplement and you should not consider it part of the prospectus or part of any prospectus supplement.

**Implications of Being a Smaller Reporting Company**

We are a "smaller reporting company" as defined in the Securities Exchange Act of 1934, as amended (the "**Exchange Act**") and have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies. Accordingly, we may provide less public disclosure than larger public companies, including the inclusion of only two years of audited consolidated financial statements and only two years of management's discussion and analysis of financial condition and results of operations disclosure and the inclusion of reduced disclosure about our executive compensation arrangements. As a smaller reporting company, we are also exempt from compliance with the auditor attestation requirements pursuant to the Sarbanes-Oxley Act. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. We will continue to be a "smaller reporting company" until we have $250 million or more in public float (based on our Common Stock) measured as of the last business day of our most recently completed second fiscal quarter or, in the event we have no public float or a public float (based on our Common Stock) that is less than $700 million, annual revenues of $100 million or more during the most recently completed fiscal year.

**Implications of Being an Emerging Growth Company**

We are an "emerging growth company," as defined in the Jobs Act. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our Common Stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "**Securities Act**"); (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable rules of the Securities and Exchange Commission (the "**SEC**"). We expect that we will remain an emerging growth company for the foreseeable future, but cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company on or before the last day of the fiscal year following the fifth anniversary of the date of the first sale of our Common Stock pursuant to an effective registration statement under the Securities Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies.

These exemptions include: (i) being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure; (ii) not being required to comply with the requirement of auditor attestation of our internal controls over financial reporting; (iii) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements; (iv) reduced disclosure obligations regarding executive compensation; and (v) not being required to hold a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We have taken advantage of certain reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the dates on which adoption of such standards is required for other public reporting companies.

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus contains certain "forward-looking statements" that are subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements discuss matters that are not historical facts and instead reflect our management's expectations, hopes, beliefs, intentions, strategies, and assumptions based on information currently available to us. The forward-looking statements are contained principally in, but not limited to, the sections of this prospectus entitled "*Prospectus Summary*" and "*Risk Factors*." Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Because the following discuss future events or conditions, forward-looking statements may include words such as "anticipate," "believe," "estimate," "intend," "could," "should," "would," "may," "seek," "plan," "might," "will," "expect," "anticipate," "approximately," "outlook," "predict," "project," "forecast," "potential," and "continue" or the negative of these words or other similar expressions. However, the absence of these words does not mean that a statement is not forward-looking

Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees of future performance. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance, or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. You are cautioned to not place undue reliance on these forward-looking statements.

We cannot predict all the risks and uncertainties that may impact our business, financial condition, or results of operations. Accordingly, the forward-looking statements in this prospectus should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved. These forward-looking statements are found at various places throughout this prospectus and include information concerning possible or projected future results of our operations, including statements about potential acquisition or merger targets, strategies or plans; business strategies; prospects; future cash flows; financing plans; plans and objectives of management; any other statements regarding future cash needs, future operations, business plans and future financial results; and any other statements that are not historical facts. We qualify all of the forward-looking statements in this prospectus by this cautionary note.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to a variety of factors and risks, including, but not limited to, the following:

● A shift in pharmacy mix toward lower margin plans, margin compression on branded medications, increased offering of specialty products, fees, mail order pharmacy steering, and programs;

● Our deriving a portion of its sales from prescription drug sales reimbursed by pharmacy benefit management companies;

● Our being adversely affected by a decrease in the introduction of new brand name and generic prescription drugs as well as increases in the cost to procure prescription drugs;

● Changes in economic conditions that adversely affect consumer/client buying practices and market adoption of the Wellgistics Tech & Hub mobile application and the accompanying revenues to premium access/services;

● Wellgistics Health's relationships with its primary wholesaler for pharmacy operations and Wellgistics Health's manufacturer relationships for with its wholesale and hub technology platform entities;

● Changes in the healthcare industry and regulatory environments;

● The effects of competition on Wellgistics Health's future business;

● Wellgistics Health's ability to execute its business plans and strategy; and

● Other risks and uncertainties described in the registration statement of which this prospectus forms a part, including, but not limited to, those risks described in the section of this prospectus entitled "*Risk Factors*."

Many of those risk factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All subsequent written and oral forward-looking statements concerning other matters addressed in this prospectus and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus. You should read this prospectus with the understanding that our actual future results may be materially different from what we expect.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

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| | |
|:---|:---|
| **THE OFFERING** | **THE OFFERING** |
| **Issuer** | Wellgistics Health, Inc. |
| **Common Stock** **Offered** | Up to shares of Common Stock based on the sale of our Common Stock at an assumed combined public offering price of $ per share of Common Stock, which is the closing price of our common stock on , 2025. |
| **Pre-Funded Warrants Offered**<br>| If the issuance of shares of Common Stock to a purchaser in this offering would result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock following the consummation of this offering, then such purchaser may purchase, if they so choose, in lieu of the shares of Common Stock that would result in such excess ownership, a Pre-Funded Warrant to purchase shares of Common Stock. The purchase price of each Pre-Funded Warrant and accompanying Warrant will equal the price per share of Common Stock and accompanying Warrant being sold to the public in this offering, minus $0.0001. For each Pre-Funded Warrant we sell, the number of shares of Common Stock we are offering will be decreased on a one-for-one basis. Each Pre-Funded Warrant will have an exercise price of $0.0001 per share, will be exercisable upon issuance and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. Purchasers of Pre-Funded Warrants will also receive an accompanying Warrant as if such purchasers were buying shares of Common Stock in this offering. This prospectus also relates to the offering of the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants. |

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| | |
|:---|:---|
| **Warrants Offered** | Each share of Common Stock or Pre-Funded Warrant is being sold together with one Warrant to purchase one share of Common Stock. The Warrants will have an exercise price of $ per share and will be exercisable beginning on the effective date of the Warrant Stockholder Approval, provided however, if the Pricing Conditions are met, the Warrants will be exercisable upon issuance (the "**Initial Exercise Date**") and will expire on the five-year anniversary of the Initial Exercise Date. See the section of this prospectus entitled "*Description of Securities We Are Offering*" for additional information. |
| **Offering Price**<br>| $ per share |

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| | |
|:---|:---|
| **Common Stock issued and outstanding prior to the Offering** | 84,064,100 shares of Common Stock (as of August 27, 2025). |
| **Common stock issued and outstanding after the Offering** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Common Stock (assuming the full exercise of any Pre-Funded Warrants issued in this offering and no exercise of the Warrants). |
| **Use of proceeds** | See the section of this prospectus entitled "*Use of Proceeds*" on page 11. |
| **Market for the Securities Offered** | Our Common Stock is traded on Nasdaq under the symbol "WGRX".<br>There is no established trading market for the Warrants or Pre-Funded Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the Warrants or Pre-Funded Warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the Warrants and Pre-Funded Warrants will be limited. |
| **Risk factors** | You should read the "*Risk Factors*" section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our Common Stock. |
| **Transfer Agent** | Colonial Stock Transfer Company, Inc. |

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**RISK FACTORS**

*Investing in our securities involves a high degree of risk. Please see the risk factors under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the SEC, and those risk factors identified in reports subsequently filed with the SEC, including our Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus. Before you invest in our securities, you should carefully consider these risks as well as other information we include or incorporate by reference into this prospectus. All of these risk factors are incorporated herein in their entirety. The risks and uncertainties we have described are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities. Certain statements in this section, or which are incorporated by reference in this section, are forward-looking statements. For more information, see the sections of this prospectus entitled "Cautionary Note Regarding Forward-Looking Statements" and "Where You Can Find More Information."*

**Risks Related to this Offering and Our Common Stock**

***We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.***

Our management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section of this prospectus entitled "*Use of Proceeds*." You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline and delay the development of our product candidates. Pending the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

***This is a reasonable best efforts offering, no minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for our business plans, including our near-term business plans.***

The Placement Agent has agreed to use its reasonable best efforts to solicit offers to purchase the securities in this offering. The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering. Because there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, Placement Agent fees, and proceeds to us are not presently determinable and may be substantially less than the maximum amounts described in this prospectus. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our continued operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required for our operations in the short-term and may need to raise additional funds, which may not be available or available on terms acceptable to us.

***Investors in this offering will experience dilution.***

The public offering price will be substantially higher than the net tangible book value per share of our outstanding shares of Common Stock. As a result, investors in this offering will incur immediate dilution of $ per share based on the public offering price of $ per share. Investors in this offering will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. See the section of this prospectus entitled "*Dilution*" for a more complete description of how the value of your investment will be diluted upon the completion of this offering.

***This offering may cause the trading price of our Common Stock to decrease.***

The price per share, together with the number of shares of Common Stock we propose to issue and ultimately will issue if this offering is completed, may result in an immediate decrease in the market price of our Common Stock. This decrease may continue after the completion of this offering.

***FINRA sales practice requirements may limit a stockholder's ability to buy and sell our securities.***

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Effective June 30, 2020, the SEC implemented Regulation Best Interest requiring that "[a] broker, dealer, or a natural person who is an associated person of a broker or dealer, when making a recommendation of any securities transaction or investment strategy involving securities (including account recommendations) to a retail customer, shall act in the best interest of the retail customer at the time the recommendation is made, without placing the financial or other interest of the broker, dealer, or natural person who is an associated person of a broker or dealer making the recommendation ahead of the interest of the retail customer." This is a significantly higher standard for broker-dealers to recommend securities to retail customers than before under FINRA "suitability rules. FINRA suitability rules do still apply to institutional investors and require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending securities to their customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information, and for retail customers determine the investment is in the customer's "best interest" and meet other SEC requirements. Both SEC Regulation Best Interest and FINRA's suitability requirements may make it more difficult for broker-dealers to recommend that their customers buy speculative, low-priced securities. They may affect investing in our common stock, which may have the effect of reducing the level of trading activity in our securities. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell our common stock.

***Purchasers who purchase our securities in this offering pursuant to a securities purchase agreement may have rights not available to purchasers that purchase without the benefit of a securities purchase agreement.***

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In addition to rights and remedies available to all purchasers in this offering under federal securities and state law, the purchasers that enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue a claim for breach of contract provides those investors with the means to enforce the covenants uniquely available to them under the securities purchase agreement including, but not limited to: (i) timely delivery of shares; (ii) agreement to not enter into variable rate financings for one year from closing, subject to an exception; (iii) agreement to not enter into any financings for 60 days from closing, subject to certain exceptions; and (iv) indemnification for breach of contract.

***We have not historically paid or declared any dividends on our Common Stock and do not expect to pay or declare cash dividends in the future on a regular basis, if at all.***

We have not historically paid or declared any dividends on our Common Stock. Any future dividends on our Common Stock will be declared at the discretion of our board of directors and will depend, among other things, on our earnings, our financial requirements for future operations and growth, and other facts as we may then deem appropriate. As such, the return on your investment, if any, has historically been dependent solely on an increase, if any, in the market value of our Common Stock.

***If we are required to obtain the Warrant Stockholder Approval, the Warrants will not be exercisable until we are able to receive such approval, and if we are unable to obtain such approval, the Warrants will have no value.***

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If we are required to obtain the Warrant Stockholder Approval, the Warrants will not be exercisable until, and unless, we obtain the Warrant Stockholder Approval from our stockholders. While we intend to promptly seek stockholder approval, if required, there is no guarantee that the Warrant Stockholder Approval will be obtained. If we are unable to obtain the Warrant Stockholder Approval, the Warrants will have no value. In addition, we will incur substantial costs, and management will devote substantial time and attention, in attempting to obtain the Warrant Stockholder Approval.

***There is no public market for the Warrants or Pre-Funded Warrants being offered in this offering.***

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There is no established public trading market for the Warrants or Pre-Funded Warrants being offered in this offering, and we do not expect one to develop. In addition, we do not intend to apply to list the Warrants or Pre-Funded Warrants on any securities exchange or nationally recognized trading system, including The Nasdaq Stock Market. Without an active market, the liquidity of the Warrants and Pre-Funded Warrants will be limited.

***The holders of Warrants and Pre-Funded Warrants purchased in this offering will have no rights as common stockholders until such holders exercise their Warrants or Pre-Funded Warrants and acquire shares of our Common Stock, except as set forth in the Warrants and Pre-Funded Warrants.***

Until a holder of Warrants and Pre-Funded Warrants acquires the shares of Common Stock upon exercise of the Warrants and Pre-Funded Warrants, as the case may be, such holder will have no rights with respect to the shares of Common Stock underlying such Warrants and Pre-Funded Warrants, except as set forth in the Warrants and Pre-Funded Warrants. Upon exercise of the Warrants and Pre-Funded Warrants, holders will be entitled to exercise the rights of common stockholders only as to matters for which the record date occurs after the exercise date.

**Risks related to our XRP Acquisition Strategy**

**WE ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT.**

***XRP and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.***

XRP and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty. XRP and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of XRP. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of XRP or the ability of individuals or institutions such as us to own or transfer XRP. For example, the U.S. executive branch and SEC, among others in the United States and abroad, have been active in recent years, and laws including the European Union's Markets in Crypto Asset Regulation and the U.K.'s Financial Services and Markets Act 2023 became law. It is not possible to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, nor how any new regulations or changes to existing regulations might impact the value of digital assets generally and XRP specifically. The consequences of increased or different regulation of digital assets and digital asset activities could adversely affect the market price of XRP and in turn adversely affect the market price of our common stock. Moreover, the risks of engaging in a XRP treasury strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets industry in general, and the use and acceptance of XRP in particular, may also impact the price of XRP and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of XRP may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to XRP, institutional demand for XRP as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for XRP as a means of payment, and the availability and popularity of alternatives to XRP. Even if growth in XRP adoption occurs in the near or medium-term, there is no assurance that XRP usage will continue to grow over the long-term.

Because XRP has no physical existence beyond the record of transactions on the XRP blockchain, a variety of technical factors related to the XRP blockchain could also impact the price of XRP. For example, malicious attacks by miners, inadequate mining fees to incentivize validating of XRP transactions, hard "forks" of the XRP blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the XRP blockchain and negatively affect the price of XRP. The liquidity of XRP may also be reduced and damage to the public perception of XRP may occur, if financial institutions were to deny or limit banking services to businesses that hold XRP, provide XRP-related services or accept XRP as payment, which could also decrease the price of XRP. Similarly, the open-source nature of the XRP blockchain means the contributors and developers of the XRP blockchain are generally not directly compensated for their contributions in maintaining and developing the blockchain, and any failure to properly monitor and upgrade the XRP blockchain could adversely affect the XRP blockchain and negatively affect the price of XRP.

Recent actions by U.S. banking regulators have reduced the ability of XRP-related services providers to gain access to banking services and liquidity of XRP may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for XRP and other digital assets.

In addition, while the current administration has expressed support regarding the development and use of digital assets as the industry has anticipated, the specific regulatory frameworks are still to be developed.

Expectations around U.S. digital asset policy, including potential sentiments that the U.S. government is not moving quickly enough or not meeting policy expectations, may adversely affect the price of XRP.

***Regulatory change reclassifying XRP as a security could lead to our classification as an "investment company" under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of XRP and the market price of our Common Stock.***

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Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an "investment company" for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an "investment company," as such term is defined in the 1940 Act, and are not registered as an "investment company" under the 1940 Act as of the date of this prospectus.

While senior SEC officials have stated their view that XRP is not a "security" in connection with secondary transactions, a contrary determination by the SEC could lead to our classification as an "investment company" under the 1940 Act, if the portion of our assets consists of investments in XRP exceeds 40% safe harbor limits prescribed in the 1940 Act, which would subject us to significant additional regulatory controls that could have a material adverse effect on our business and operations and may also require us to change the manner in which we conduct our business.

We monitor our assets and income for compliance under the 1940 Act and seek to conduct our business activities in a manner such that we do not fall within its definitions of "investment company" or that we qualify under one of the exemptions or exclusions provided by the 1940 Act and corresponding SEC regulations. If XRP is determined to constitute a security for purposes of the federal securities laws, we would take steps to reduce the percentage of XRP that constitute investment assets under the 1940 Act. These steps may include, among others, selling XRP that we might otherwise hold for the long term and deploying our cash in non-investment assets, and we may be forced to sell our XRP at unattractive prices. We may also seek to acquire additional non-investment assets to maintain compliance with the 1940 Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business. Any of these actions could have a material adverse effect on our results of operations and financial condition. Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid being deemed to be an investment company in accordance with the safe harbor. If we were unsuccessful, and if XRP is determined to constitute a security for purposes of the federal securities laws, then we would have to register as an investment company, and the additional regulatory restrictions imposed by 1940 Act could adversely affect the market price of XRP and in turn adversely affect the market price of our Common Stock.

***We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations.***

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As XRP and other digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of XRP. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of XRP or the ability of individuals or institutions such as us to own or transfer XRP. See the risk factor entitled "*XRP and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty*" above. If XRP is determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of XRP and in turn adversely affect the market price of our common stock. See the risk factor entitled "*Regulatory change reclassifying XRP as a security could lead to our classification as an "investment company under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of XRP and the market price of our Common Stock*" above. Moreover, the risks of us engaging in a XRP treasury strategy have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

***Our XRP holdings will be less liquid than our cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.***

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Historically, the XRP markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability and to the extent we hold XRP, we may not be able to sell XRP at favorable prices or at all. As a result, our XRP holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, XRP we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered XRP or otherwise generate funds using our XRP holdings, including in particular during times of market instability or when the price of XRP has declined significantly. If we are unable to sell our XRP, enter into additional capital raising transactions using XRP as collateral, or otherwise generate funds using our XRP holdings, or if we are forced to sell our XRP at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

***Due to the unregulated nature and lack of transparency surrounding the operations of many XRP trading venues, XRP trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in XRP trading venues and adversely affect the value of our XRP.***

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XRP trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many XRP trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in XRP trading venues, including prominent exchanges that handle a significant volume of XRP trading and/or are subject to regulatory oversight, in the event one or more XRP trading venues cease or pause for a prolonged period the trading of XRP or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

In 2019 there were reports claiming that 80-95% of bitcoin trading volume on trading venues was false or non-economic in nature, with specific focus on unregulated exchanges located outside of the United States. The SEC also alleged as part of its June 5, 2023, complaint that Binance Holdings Ltd. committed strategic and targeted "wash trading" through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange. The SEC has also brought recent actions against individuals and digital asset market participants alleging such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate their underlying trading price. Such reports and allegations may indicate that the XRP market is significantly smaller than expected and that the United States makes up a significantly larger percentage of the XRP market than is commonly understood. Any actual or perceived false trading in the XRP market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of our XRP. Negative perception, a lack of stability in the broader XRP markets and the closure, temporary shutdown or operational disruption of XRP trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants in the XRP ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in XRP and the broader XRP ecosystem and greater volatility in the price of XRP. For example, in 2022, each of Celsius Network, Voyager Digital, Three Arrows Capital, FTX, and BlockFi filed for bankruptcy, following which the market prices of XRP and other digital assets significantly declined. In addition, in June 2023, the SEC announced enforcement actions against Coinbase, Inc., and Binance Holdings Ltd., two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price of XRP and other digital assets. These were followed in November 2023, by an SEC enforcement action against Payward Inc. and Payward Ventures Inc., together known as Kraken, another large trading venue for digital assets. The price of our common stock may be affected by the value of our XRP holdings, the failure of a major participant in the XRP ecosystem could have a material adverse effect on the market price of our common stock.

***If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our XRP, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our XRP and our financial condition and results of operations could be materially adversely affected.***

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Security breaches and cyberattacks are of particular concern with respect to our XRP. XRP and other blockchain-based cryptocurrencies and the entities that provide services to participants in the XRP ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers. Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:

● a partial or total loss of our XRP in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our XRP;

● harm to our reputation and brand;

● improper disclosure of data and violations of applicable data privacy and other laws; or

● significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader XRP blockchain ecosystem or in the use of the XRP network to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a variety of industries, including industries related to XRP, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, we expect that unauthorized parties will attempt to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the XRP industry, including third-party services on which we rely, could materially and adversely affect our financial condition and results of operations.

***The acceptance of blockchain and digital assets as payment on our platform introduces significant risks, including, without limitation, regulatory uncertainty, market volatility, and operational challenges.***

Digital assets are subject to evolving legal and regulatory frameworks in the U.S. and internationally. Any change in laws regulating or enforcement actions pertaining to digital assets may restrict the use of these assets, including XRP, expose us to penalties and increase compliance costs, among other things. In addition, the value of digital assets is highly volatile and may fluctuate due to market dynamics, macroeconomic factors or technical vulnerabilities, potentially reducing their liquidity and utility as a payment method.

Our ability to convert digital asset payments into fiat currency may be impaired during periods of market instability, while funds stored in digital assets lack protections offered by institutions such as the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. The integration of blockchain payment systems may expose us to risks of cyberattacks, fraud, or technical failures, potentially resulting in financial losses or reputational damage. The limited familiarity of consumers and institutions with digital assets may also hinder adoption and increase operational costs, while evolving tax obligations and reporting requirements related to digital asset transactions might create additional issues and risks relating to compliance. These factors may negatively affect our business, financial condition and results of operations.

**USE OF PROCEEDS**

We will receive net proceeds of approximately $ million from this offering (assuming the sale of all shares offered hereby at a public offering price of $ per share, which represents the closing price of the Common Stock on Nasdaq on , 2025), after deducting Placement Agent fees and estimated offering expenses payable by us. However, this is a reasonable best efforts offering with no minimum number of securities or amount of proceeds as a closing condition, and we may not sell all or any of these securities offered in this prospectus; as a result, we may receive significantly less in net proceeds.

We intend to use the net proceeds from this offering for working capital and general corporate purposes, which may include operating expenses, research and development, and pending and future acquisitions. We have not determined the amount of net proceeds to be used specifically for any of such purposes. Although we may, from time to time, evaluate potential strategic investments and acquisitions, we do not have any definitive agreements in place to make any such acquisitions at this current time. We will not prioritize any of these uses of proceeds to the extent we receive less than the approximate net proceeds identified above.

Our expected use of net proceeds from this offering and our existing cash and cash equivalents represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used include:

● The existence of other opportunities or the need to take advantage of changes in timing of our existing activities;

● The need or desire on our part to accelerate, increase or eliminate existing initiatives due to, among other things, changing market conditions and competitive developments; and/or

● If strategic opportunities present themselves (including acquisitions, joint ventures, licensing and other similar transactions).

As a result, we cannot predict with any certainty our use of the net proceeds from this offering. Our management will retain broad discretion over the allocation of the net proceeds from this offering. Accordingly, we will have discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the proceeds of this offering.

**CAPITALIZATION**

The following table presents a summary of our cash and cash equivalents and capitalization as of June 30, 2025:

● on an actual basis;

● on an as adjusted basis to reflect the issuance and sale of 11,182,565 shares of Common Stock subsequent to June 30, 2025; and

● on an as adjusted basis to reflect the issuance and sale of shares of Common Stock or, in lieu thereof, Pre-Funded Warrants to purchase up to shares of Common Stock, and accompanying Warrants to purchase up to shares of Common Stock in this offering at an assumed public offering price of $ per share, which represents the closing price of the Common Stock on Nasdaq on , 2025, after deducting Placement Agent Fees and estimated offering expenses payable by us.

The unaudited as adjusted information below is prepared for illustrative purposes only and our capitalization following the completion of this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read the following table in conjunction with information contained in our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent quarterly reports, which are incorporated herein by reference, such as the section entitled "*Management's Discussion and Analysis of Financial Condition and Results of Operations*," our historical financial statements, and the related notes to such financial statements.

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| | | |
|:---|:---|:---|
| | **As of June 30, 2025** | **As of June 30, 2025** |
| <br>(in thousands) | **Actual** | **As adjusted** |
| Cash and cash equivalents | $419942 | $|
| Common stock, $0.0001 par value, 500,000,000 shares authorized, 72,881,535 and 51,055,508 shares issued and 63,144,817 and 51,055,508 shares outstanding as of June 30, 2025 and December 31, 2024, respectively | 6315 |  |
| Additional paid-in capital | 49759467 |  |
| Accumulated deficit | (48860527) |  |
| Total stockholders' equity | $905255 | $|

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Each $0.10 increase (decrease) in the assumed public offering price of $ per share would increase (decrease) each of cash and cash equivalents, additional paid-in capital and total shareholders' equity by approximately $, assuming the number of shares of Common Stock set forth on the cover page of this prospectus remains the same, and after deducting estimated Placement Agent fees and estimated offering expenses. Similarly, each increase (decrease) of shares in the number of shares of Common Stock offered would increase (decrease) cash and cash equivalents, additional paid-in capital and total shareholders' equity by approximately $, assuming the assumed public offering price remains the same, and after deducting estimated Placement Agent Fees and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

The above discussion is based on 72,881,535 shares of our Common Stock outstanding as of June 30, 2025.

**DILUTION**

If you purchase securities in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share of our Common Stock and the as adjusted net tangible book value per share of our Common Stock immediately after giving effect to this offering.

Our net tangible book value as of June 30, 2025, was $(43,560,033), or $(0.60) per share of our Common Stock. Our net tangible book value is the amount of our total tangible assets minus total liabilities. Net tangible book value per share as of June 30, 2025, is our net tangible book value divided by the number of shares of Common Stock outstanding as of June 30, 2025.

The information below is illustrative only. Our dilution following the closing of this offering will change based on the actual public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and related notes included in our Annual Report on Form 10-K and subsequent quarterly reports.

After giving effect to the sale of the maximum number of shares of Common Stock offered hereby, or shares in this offering at an assumed public offering price of $ per share of Common Stock, and after deducting estimated Placement Agent fees and estimated offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2025, would have been approximately $ million, or approximately $ per share of Common Stock. This amount represents an immediate increase in as adjusted net tangible book value of $ per share of Common Stock to our existing stockholders and an immediate dilution of $ per share of Common Stock to investors participating in this offering. We determine dilution per share of Common Stock to investors participating in this offering by subtracting as adjusted net tangible book value per share of Common Stock after giving effect to this offering from the public offering price per share of Common Stock paid by investors participating in this offering.

---

| | | |
|:---|:---|:---|
| Assumed offering price per share of Common Stock |  | $|
| Actual Net tangible book value per share of Common Stock before this offering<sup>(1)</sup> | $(0.60 ) |  |
| Increase in net tangible book value per share attributable to new investors<sup>(2)</sup> | $— |  |
| Net tangible book value per share after this offering<sup>(3)</sup> |  | $|
| Immediate dilution in net tangible book value per share to new investors |  | $|

---

(1) Determined by dividing (i) net tangible book value (total
 assets less intangible assets) less total liabilities by (ii) the total number of shares of Common Stock issued and outstanding
 prior to the offering.

(2) Represents the difference between (i) as adjusted net tangible book
 value per share after this offering and (ii) net tangible book value per share as of June 30, 2025.

(3) Determined by dividing (i) as adjusted net tangible book value, which
 is our net tangible book value plus the cash proceeds of this offering, after deducting the estimated offering expenses payable by
 us, by (ii) the total number of shares of Common Stock to be outstanding following this offering.

A $0.10 increase (decrease) in the assumed combined public offering price per share of $ would increase (decrease) the as adjusted net tangible book value by approximately $($) per share and the dilution to new investors by $($) per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated Placement Agent fees and estimated offering expenses payable by us. An increase (decrease) of in the number of shares offered by us would increase (decrease) the as adjusted net tangible book value by approximately $($) per share and the dilution to new investors by $($) per share, assuming no change in the public offering price per share of Common Stock, and after deducting estimated Placement Agent fees and estimated offering expenses payable by us.

The number of shares of our Common Stock outstanding is based on an aggregate of shares of our Common Stock outstanding as of June 30, 2025, and excludes:

**INDUSTRY AND MARKET DATA**

Some of the market and industry data contained in this prospectus are based on independent industry publications or other publicly available information. We believe this information is reliable as of the applicable date of its publication, however, we have not independently verified and cannot assure you as to the accuracy or completeness of this information. As a result, you should be aware that the market and industry data contained herein, and our beliefs and estimates based on such data, may not be reliable.

**BUSINESS**

 

**Overview**

Incorporated in 2022, we are a holding company for existing and future planned operating companies within the pharmaceutical, healthcare, and healthcare technology industries. We seek to be a micro health ecosystem, with a portfolio of companies consisting of a pharmacy, wholesale operations, and a technology division that provides a novel platform for hub and clinical services. We are focused on improving the lives of patients while delivering unique solutions for pharmacies, providers, pharmaceutical manufacturers, and payors. With the successful integration of our patient-centric approach and innovative healthcare applications, we intend to shift the dynamic of pharmaceutical care to revolve around the patient for a wide range of therapeutic conditions by offering a full spectrum of integrated solutions as a result of leveraging the synergies of its business segments to address access, care coordination, dispensing, delivery, and clinical management of pharmaceutical products ranging from "specialty-lite" to general maintenance conditions.

As of the date of this prospectus, we are a holding company that currently conducts business through two direct subsidiaries—Wood Sage and Wellgistics, LLC—and two indirect subsidiaries—Wellgistics Tech & Hub and Wellgistics Pharmacy. We have also entered into an agreement whereby we will acquire a third direct subsidiary, Peek. We expect to close on our acquisition of Peek during the third quarter of 2025.

We closed on our acquisition of Wood Sage on June 16, 2024. Wood Sage is a holding company with no operations other than those of its wholly owned subsidiaries, Wellgistics Tech & Hub and Wellgistics Pharmacy, which it acquired in August 2023. Wellgistics Tech & Hub was founded in 2017 and has been operating as a healthcare technology company, namely as the creator of a technology platform that was recommissioned to serve as a pharmaceutical hub to facilitate the transfer of prescriptions and provide backend clinical concierge services to a network of independent pharmacies. Wellgistics Tech & Hub has not generated any revenue to date. Wellgistics Pharmacy, was founded in 2011 and has continuously operated as a retail community specialty pharmacy.

We closed on our acquisition of Wellgistics, LLC on August 30, 2024. Closing occurred pursuant to the Wellgistics MIPA, which was first entered into on May 11, 2023, and subsequently amended, most recently on July 24, 2025. As amended, the purchase consideration that we agreed to pay the sellers of Wellgistics, LLC under the revised Wellgistics MIPA consists of:

● a closing cash payment of $10 million, $1 million of which was paid in immediately available funds to Zions Bank, a creditor of Wellgistics, LLC, by wire transfer, and the remainder of which was converted to common stock of the Company in July 2025;

● a promissory note in the aggregate principal amount of $15 million plus simple interest accruing annually equal to the "Prime Rate" as published by the *Wall Street Journal* on January 1 of the applicable year, together payable in two annual installments of $5 million each and a third annual installment of $7.5 million commencing on July 24, 2026;

● bonus payments in the form of our Common Stock in an aggregate amount of 2,666,224 shares, after accounting for the reverse stock split that we effected on December 5, 2024, that are subject to restrictions on transfer. Such restrictions shall be removed over three years commencing December 31, 2024;

● shares of restricted Common Stock in an aggregate amount of up to 1,333,111 shares, after accounting for the reverse stock split that we effected on December 5, 2024, that are subject to repurchase if such financial metrics are not met for calendar years 2024, 2025, and 2026 (the "**Financial Contingent Bonus Payments** "); and

● contingent bonus payments consisting of 50% cash and 50% our Common Stock to the extent that Wellgistics Health's EBITDA is in excess of 110% of certain established targets for each of the years ended December 31, 2024, December 31, 2025, and December 31, 2026.

The Financial Contingent Bonus Payments will no longer be subject to repurchase by Wellgistics Health, according to the following terms:

● For the calendar year ending December 31, 2024: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $47.2 million, and (ii) 222,185 shares of our Common Stock will no longer be subject to repurchase if the net operating income of Wellgistics, LLC prior to the provision for (a) interest expense and interest income, (b) federal, state, local and foreign taxes based on the income or profits, and (c) depreciation and amortization ("EBITDA") is greater than or equal to $4.2 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2024 is capped at 444,370 shares.

● For the calendar year ending December 31, 2025: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $57.7 million, and (ii) 222,185 shares of our Common Stock will no longer be subject to repurchase if the EBITDA of Wellgistics, LLC is greater than or equal to $6.5 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2025 is capped at 444,370 shares.

● For the calendar year ending December 31, 2026: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $63.5 million, and (ii) 222,186 shares of our Common Stock will no longer be subject to repurchase if the EBITDA of Wellgistics, LLC is greater than or equal to $7.5 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2026 is capped at 444,371 shares.

We focus on providing "specialty-lite" or niche pharmaceutical products and services through Wood Sage and we support these activities through Wellgistics, LLC. We intend to source and distribute pharmaceutical products to our pharmacy and network of independent pharmacy partners throughout the United States, positioning us to negotiate greater discounts based on market share. Our management believes that our digital pharmacy business, hub and clinical services technology platform, and wholesale distribution operations will place us in a position to provide significant value in this key "specialty-lite" market by providing patients access and convenience, while providing partners with ready-to-go market solutions with big data.

Data released from the Centers for Medicare & Medicaid Services illustrates that the National Health Expenditure Data for 2022 grew to $4.5 trillion dollars and accounted for 17.3% of GDP. A deeper dive of this report reveals that total retail prescription drug specialty drug market accounts for less than 10% of total drugs in the market but is responsible for greater than 50% of the prescription drug spend per annum. It is well documented in the literature that the with an expected increase in the health spending share of GDP to 19.7% by 2032. IQVIA'S 2024 report on medicine spending trends found that overall spending in the United States market for medicines reached $435 billion in 2023. After evaluating reasons for increased healthcare expenditure, poor medication adherence continues to be a challenge that causes unnecessary strain on the healthcare system, including, but not limited to, increased hospital admissions and readmissions rates from medication non-compliance and adverse events. Many of these factors are preventable by empowering patient autonomy in their healthcare journey, identifying cost savings opportunities, and providing access to clinical resources and support.

We believe that we are in a prime position to address prescription spending in the "specialty lite" therapy area while improving patient health outcomes by equipping patients with innovative digital health tools. Our pharmacy business has expanded our service coverage area while strengthening our clinical expertise in several key therapeutic categories, including services such as care coordination and patient financial assistance. We anticipate that potential partner relationships will enable the pharmacy business to offer a competitive cash formulary as an alternative option when high insurance deductibles make such formulary economically feasible.

We intend to expand our wholesale activities by continuing to partner with existing, and establishing new, manufacturer relationships. These relationships will help provide sales and clinical education support to pharmacies purchasing pharmaceutical products. Our planned wholesale operations will help us strategically identify opportunities to wholesale products that are normally not carried by the three largest wholesalers in the United States. Furthermore, these wholesale activities should help us enter exclusive or semi-exclusive relationships based on a time period to support revenue maximization. We anticipate that new partnerships with group purchasing organizations will be effective, as such partnerships increase the business division's visibility with many of our member pharmacies.

Our novel Wellgistics Tech & Hub platform that serves as a pharmacy hub and allows for clinical services to be connected to our pharmacy operations. This platform allows for an end-to-end mobile application solution whereby patients can digitize their prescription journey. The solution helps to preserve patient autonomy, improve prescription price transparency, and provide additional concierge services in an effort to boost medication adherence and improve patient outcomes. Wellgistics Tech & Hub aggregates data collected from administering the software to provide aggregated reports that are tied to medication adherence and outcomes to make a meaningful impact for all stakeholders involved.

In addition to its core pharmaceutical distribution and healthcare services operations through Wellgistics, LLC, Wellgistics Pharmacy, and Wellgistics Tech & Hub, our management team anticipates executing on a strategic plan to integrate blockchain-based technologies within our existing ecosystem in an attempt to improve our payment infrastructure. In this regard, we expect to implement in the near future a payment solution leveraging the XRP Ledger (XRPL) to facilitate secure, low-cost, real-time payments between the Company, our pharmacy customers, and our manufacturer and vendor partners. This represents an initial phase of our broader strategy to incorporate decentralized technologies that we hope will enhance speed, transparency, and cost-efficiency in the healthcare supply chain. We are actively working to implement this system during the third quarter of 2025, and plan to evaluate additional applications, including smart contracts, claim reconciliation, and direct-to-patient fulfillment.

**Wellgistics Tech & Hub**

Through Wellgistics Tech & Hub, we aim to preserve patient autonomy, improve price transparency, and aid in making a meaningful impact on patient outcomes by eliminating barriers to therapy while simultaneously boosting adherence. We work with channel partners such as pharmaceutical manufacturers, provider groups and accountable care organizations, telehealth companies, and employer groups to offer full suite of patient-centered pharmacy services. Wellgistics Tech & Hub's business-to-business strategy approach enables prescriptions to be sent directly to Wellgistics Pharmacy and subsequently transferred to an eligible in-network independent pharmacy. Each channel partner is equipped with de-identified data to improve its respective business operation and or improve its renumeration from the value-based services the clinical concierge arm provides.

Wellgistics Tech & Hub services include:

●  ***Robust Hub Pharmacy Network*** : establishing relationships with multiple entities (i.e., pharmacy management software systems, wholesalers, buying groups, secondary channel partners, etc.) and their pharmacy networks to provide a robust pharmacy network for prescription dispensing services which spans across all 50 states.

●  ***Patient Care Coordination*** : maintaining a dedicated pharmacy team coordinates and tracks patient adherence and safety. Pharmacists and pharmacy technicians work together to complete patient enrollment and work with prescribers to identify potential adherence failures and implement proactive plans to optimize treatment effectiveness.

●  ***Clinical Services*** : maintaining a pharmacy team that, with the assistance of pharmacy technicians, provide clinically based drug therapy management programs for clients and patients. These programs include new disease state counseling, adverse event monitoring, refill check-ins, and overall medication therapy management services. In addition, pharmacists work with patients' prescribers to identify adherence failures and to implement a proactive plan to achieve intended effectiveness. The team also provides emergency pharmacy support services including phone, email, and chat support. We expect that many of these services will be available virtually, through a tele-pharmacy program to make it easier for patients to connect with clinical pharmacists from a mobile application.

●  ***Patient Compliance Programs*** : maintaining and providing compliance and persistency programs designed to support the needs of patients based on therapy regimen by facilitating screening and follow-up with high-risk patients based on concomitant medications to ensure compliance with therapy programs. The data analytics platform aggregates adherence data to identify these patients to allow for proactive interventions to ensure adherence to therapy programs.

●  ***Benefits Investigation*** : conducting a benefits investigation for each patient, screening for prior authorization status prior to adjudicating the claim, determining the projected deductibles, coinsurance, and out-of-pocket maximums to assist the patient with adhering to therapy programs and/or working with the prescriber to identify alternative recommendations. Its specialists provide all necessary coding for the prescribed therapy or service. Any prior authorization or predetermination requirements are defined at the time of the benefits investigation.

●  ***Patient Financial Assistance*** : maintaining a pharmacy team, in conjunction with its partners, to assist patients by navigating their benefits and finds third-party financial assistance to address coverage deficiencies. When available, it works with available cash drug discount providers, manufacturer co-pay cards, co-pay payment plans, including co-pay card enrollment and program management. The team also coordinates with many external charitable foundations and research grant organizations that help subsidize the cost of medications for patients.

●  ***Prior Authorization*** : assisting, in conjunction with its partners, with the prescribing physicians and their staff, contacts the patient's insurance plan and collects all necessary patient specific information, together with supporting documentation, to provide to the appropriate third party to support reimbursement for the prescribed medication. If the required therapy is not listed on the third-party payer's formulary, it compiles the necessary information to file a formulary exception on behalf of the patient. These services work to minimize prescription abandonment while simultaneously improving outcomes and revenue optimization for provider groups and pharmaceutical manufacturing clients.

●  ***Data Access & Reporting*** : producing de-identified customizable reports tailored to the requirements of each channel partner. These reports enable clients to conduct data mining on prescribing patterns, insurance coverage, and track and trace dispositions status, among many others. The technology can also create real-time data dashboards for enterprise clients such as account care organizations, payors, and health systems.

●  ***AI Driven Technology*** : using artificial intelligence to facilitate a convenient and easy-to-use pharmacy experience for users of its digital pharmacy and mobile technology solutions. Its smart algorithm conducts efficient routing of prescriptions to partner pharmacies based on pharmacy benefit manager/payor contracts, pharmacy state licenses, pricing, and other location features such as hours of operations and service level provided, thereby eliminating delays with receiving prescription products and time to initiate therapy. The application will also auto-apply discount and manufacturer copay cards based on eligible commercial plans or cheaper cash options.

●  ***Optimized Prescription Journey*** : providing an easy button for refill reminders and processing, which can be initiated by the dispensing pharmacy or the patient. Reminders in the form of push notifications, texts, and emails are all configurable. Through the application and with our integrated pharmacy partners, it is able to provide the end-to-end solution, assisting with co-pay collection, providing 100% pass through to our integrated partner pharmacies, and arranging for the delivery of that medication via our nationwide partnerships with Lyft and Roadie.

In the future, we expect that we will generate recurring SaaS transaction fees for use of our technology to transfer prescriptions into our pharmaceutical network. Revenue driven by this model will be derived from pharmaceutical manufacturers and other strategic channel partners paying for the following services: patient care coordination, clinical services, compliance and persistency programs, patient financial assistance, prior authorizations and access to data.

**Wellgistics Pharmacy, LLC**

Founded in 2011 under the name Community Specialty Pharmacy, LLC and acquired by us in June 2024 through our acquisition of Wood Sage, Wellgistics Pharmacy serves as the backbone dispensing pharmacy of our healthcare ecosystem. First operating as a retail community specialty pharmacy, Wellgistics Pharmacy provides general and specialty pharmacy services dedicated to servicing the needs of patients, as well as clinical expertise, technology-driven innovation tools, and administrative efficiencies that support physicians, payers, and pharmaceutical manufacturers. Initially focusing on providing HIV/AIDS products, Wellgistics Pharmacy has expanded its business operations to perform 340B services by partnering with local clinics and provider groups. It has pursued pharmacy state licenses to convert its business into a mail order pharmacy. Currently, Wellgistics Pharmacy is licensed in 32 states and the District of Columbia, with superb license coverage along the east coast. While Wellgistics Pharmacy voluntarily forfeited its specialty accreditations, Wellgistics Pharmacy maintains specialty internal standard operating procedures and performs all of the functions of a specialty pharmacy.

Wellgistics Pharmacy purchases pharmaceuticals including specialty medications from manufacturers and wholesale distributors, fills prescriptions, labels, packages and delivers these pharmaceuticals to patients' homes or physicians' offices through contract couriers or carriers. It maintains a call center and customer support within its pharmacy located in Tampa, Florida. Wellgistics Pharmacy has several 340B relationships, acting as the dispensing pharmacy for these healthcare facilities that help drive revenue and prescription volume. Wellgistics Pharmacy's relationship with Wellgistics, LLC and other wholesalers enables it to offer a competitive cash-based formulary for the uninsured and underinsured patient populations. Given its low-cost business model, Wellgistics Pharmacy believes there is an opportunity to gain market share with small- to medium-size employer groups in a partnership model with other consumer driven healthcare companies to the extent that more patients elect to pay out of pocket for prescriptions.

Wellgistics Pharmacy's current revenue model is based on prescription fulfillment and reimbursement from payors (i.e., insurance companies/pharmacy benefit managers) and patient copayments for prescription drugs. Wellgistics Pharmacy adds value to our combined operations by providing an opportunity to centrally perform the general and specialty services on behalf of our network of independent pharmacies, leveraging proprietary technology solutions and thereby reducing network pharmacy administrative burden and associated costs.

Wellgistics Pharmacy's services include:

●  ***Patient Care Coordination*** : coordinating and tracking patient adherence and safety. Pharmacists and pharmacy technicians work together to complete patient enrollment and work with prescribers to identify potential adherence failures and implement proactive plans to optimize treatment effectiveness.

●  ***Clinical Services*** : providing, with the assistance of pharmacy technicians, clinically-based drug therapy management programs for clients and patients. These programs include new disease state counseling, adverse event monitoring, refill check-ins, and overall medication therapy management services. Wellgistics Pharmacy's pharmacists' work with patients' prescribers to identify adherence failures and to implement a proactive plan to achieve intended effectiveness. Wellgistics Pharmacy also provides emergency pharmacy support services.

●  ***Compliance and Persistency Programs*** : maintaining compliance and persistency programs that support the needs of patients based on their therapy regimen. High-risk patients are proactively managed by Wellgistics Pharmacy's pharmacy teams to ensure adherence to therapy programs. Wellgistics Pharmacy offers special compliance packaging including unit dose and blister packs to promote patient adherence.

●  ***Patient Financial Assistance*** : assisting, in conjunction with its partners, patients by navigating their benefits and finding third-party financial assistance to address coverage deficiencies. When available, Wellgistics Pharmacy works with available co-pay assistance programs, including co-pay card enrollment and program management. Wellgistics Pharmacy's team also coordinates with many external charitable foundations and research grant organizations that help subsidize the cost of medications for patients.

●  ***Prior Authorization*** : assisting, in conjunction with its partners, in coordinating with prescribing physicians and their staff, contacting the patient's insurance plan and collects all necessary patient specific information, together with supporting documentation, to provide to the appropriate third party to support reimbursement for the prescribed medication. If the required therapy is not listed on the third-party payer's formulary, Wellgistics Pharmacy compiles the necessary information to file a formulary exception on behalf of the patient.

●  ***Risk Evaluation and Mitigation Strategy*** : administering Risk Evaluation and Mitigation Strategy protocols on all levels of risk mitigation, which is required by many pharmaceutical manufacturers due to regulatory requirements. The United States Food and Drug Administration (the "**FDA**") requires Risk Evaluation and Mitigation Strategy from certain manufacturers to ensure that the benefits of a drug or biological product outweigh its risks. Manufacturers are required to comply with specific FDA requirements that may include medication use guides, black box warnings/patient package insert language, and a communication plan to healthcare providers. As part of Risk Evaluation and Mitigation Strategy protocols, manufacturers may also be required to comply with Elements to Assure Safe Use to mitigate a specific serious risk listed in the labeling of the drug, including specialized training and certifications, required dispensing locations, patient monitoring, and associated reporting. Wellgistics Pharmacy has standard operating procedures in place to support all aspects of a Risk Evaluation and Mitigation Strategy program, administration, drug fulfillment, disease management, medication guide dispensing, and the Elements to Assure Safe Use specific to a pharmaceutical manufacturer's program.

**Wholesale — Wellgistics, LLC**

Founded in 2013 and acquired by us in August 2024, Wellgistics, LLC serves as the wholesale arm of our healthcare ecosystem as a 50-state, FDA-licensed and NABP-accredited pharmaceutical wholesaler distributor, bridging the gap between small- to mid-size pharmaceutical manufacturers and independent retail pharmacies. Serving over 5,000 registered pharmacies nationwide, Wellgistics, LLC provides significant value by offering competitive pricing, unique products, and exceptional service, while also promoting manufacturers' products to a diverse range of pharmacies. Wellgistics, LLC's primary focus is on supporting independent retail pharmacies in search of better products, prices, and services, thereby ensuring their growth and sustainability in the competitive pharmaceutical sector.

Wellgistics, LLC provides distribution and third party logistics services to both pharmaceutical manufacturers and independent retail pharmacies. With over 60 manufacturing relationships, Wellgistics, LLC identifies niche therapeutic products and work with its manufacturing clients to increase market access and visibility of its client relationships with product awareness and support campaigns. Specifically, Wellgistics, LLC helps promote product distribution through its network of pharmacy buyers by providing sales and marketing support. These services include providing product education, identifying opportunities for therapeutic substitution when clinically relevant, and cost savings opportunities for pharmacies and their patients. Wellgistics, LLC's portfolio of products is comprised of 65% topical generics with a primary focus on the dermatology market, 20% oral generic formulations primarily in the non-narcotic pain category, 10% oral and topical brand formulations, and 5% in the over-the-counter market space. Its investments in cold chain infrastructure will position this division to compete in the specialty-lite therapy category while also expanding our ability to house additional branded products.

Wellgistics, LLC's services include:

●  ***Distribution*** : distributing branded and generic pharmaceuticals, as well as over-the-counter healthcare and consumer products throughout the United States. The Wellgistics, LLC main office is located in Tampa, Florida. Wellgistics, LLC's primary distribution center is located in Lakeland, Florida and another facility is located in Columbus, Ohio. This segment is dedicated to supporting independent retail pharmacies in search of competitive pricing, unique products, and exceptional services, ensuring their growth and sustainability within the competitive pharmaceutical sector.

●  ***Third-Party Logistics*** : Wellgistics, LLC's third-party logistics segment focuses on providing various services, including warehousing, inventory management, pick and pack, and shipping, to small and mid-size pharmaceutical manufacturers. By investing in FDA-regulated warehouse facilities and a state-of- the-art cold chain infrastructure, Wellgistics, LLC ensures the highest standards of product integrity and timely delivery. This segment allows Wellgistics, LLC to offer comprehensive supply chain solutions to both manufacturer partners and independent retail pharmacies.

**Peek**

On April 8, 2025, we entered into an Agreement and Plan of Merger (the "**Merger Agreement**") by and among the Company, Wellpeek Merger Sub 1, Inc. ("**Merger Sub 1**"), Wellpeek Merger Sub 2, LLC ("**Merger Sub 2**" and together with Merger Sub 1, the "**Merger Subs**"), Peek Healthcare Technologies, Inc. ("**Peek**"), and the Stockholder Representative (as defined in the Merger Agreement). Pursuant to the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), Merger Sub 1 will merge with and into Peek (the "**First Merger**"), with Peek continuing as the surviving entity and a wholly owned subsidiary of the Company. Immediately thereafter, Peek will merge with and into Merger Sub 2 (the "**Second Merger**" and, together with the First Merger, the "**Mergers**"), with Merger Sub 2 continuing as the surviving entity. The Mergers, taken together, are intended to constitute an integrated plan and be treated as a "reorganization" for U.S. federal income tax purposes. The board of directors and officers of Merger Sub 2 existing as of the Effective Time will serve as the board of directors and officers of Merger Sub 2, as the ultimate surviving entity.

Peek is a pioneering digital prescription platform that seeks to transform how patients shop for medications by providing real-time pricing transparency to assist consumers with making more informed medication purchase decisions. Peek's mission is to empower individuals with price transparency, innovative comparison tools, and seamless access to affordable prescriptions nationwide. Lumina Marketing, LLC, a Florida limited liability company ("**Lumina Marketing**"), and Lumina Therapeutics, LLC, a Delaware limited liability company ("**Lumina Therapeutics**" and, together with Lumina Marketing, the "**Lumina Entities**") are affiliates of Peek and provide a range of consulting services to brand-name and specialty-lite drug manufacturers in the areas of market access, branding, and commercialization.

As a condition to and prior to the closing of the Mergers, Peek will acquire all of the assets of each of the Lumina Entities in exchange for newly issued shares of Class A Common Stock of Peek (the "**Lumina Contribution Shares**"). Following closing of the transactions contemplated by the Merger Agreement, the legacy Peek and Lumina Entity businesses will operate under a single, wholly-owned subsidiary of the Company.

At the effective time of the First Merger (the "**First Effective Time**"), the Lumina Contribution Shares that are issued and outstanding immediately prior to the First Effective Time will be converted into the right to receive Closing Merger Consideration as follows:

● A
 cash payment by the Company equal to $2,000,000, *minus* (i) the amount of Closing Indebtedness (as defined in the Merger Agreement), *minus* (ii) the amount of any unpaid Transaction Expenses (as defined in the Merger Agreement), *plus* (iii) the amount
 by which the Estimated Working Capital (as defined in the Merger Agreement) exceeds $150,000, <u>or</u> *minus* (iv) the amount
 by which the $150,000 exceeds the Estimated Working Capital; and

● An
 unsecured promissory note made by the Company (the "**Note**") in the principal amount of $6,000,000 bearing interest
 at the rate of 4.5%, compounding annually, and maturing on the third anniversary of the date such note is made.

Also at the First Effective Time, all shares of Class A Common Stock of Peek (other than the Lumina Contribution Shares) and all shares of Class B Common Stock of Peek (collectively, the "**Specified Shares**") that are issued and outstanding immediately prior to the First Effective Time will be converted into the right to receive 1,777,778 shares of Company common stock (the "**Stock Consideration**") in Closing Merger Consideration as follows:

● 507,615 shares of our Common Stock (the "**Guaranteed Stock Consideration** "); and

● 1,270,163 shares of our Common Stock (the "**Earn-Out Shares** "), which shall be subject to forfeiture based on the Surviving Company's ability to achieve the target aggregate revenue amount of $8,800,000 during the period commencing on the Closing Date and ending on December 31, 2027.

In order to preserve the intended U.S. federal income tax treatment of the Mergers, it is possible that all or a portion of the final payment under the Note may be made in the form of additional shares of our Common Stock, depending on whether and the extent to which any Earn-Out Shares issued at the First Effective Time are forfeited pursuant to the terms of the Merger Agreement.

The consideration to be paid by us will be appropriately adjusted for any reclassification, recapitalization, stock split (including a reverse stock split), or combination, exchange, readjustment of shares, or similar transaction, or any stock dividend or distribution paid in stock.

Peek stockholders who have not voted in favor of adopting the Merger Agreement and who perfect their appraisal rights under the Delaware General Corporation Law (the **"DGCL**") are entitled to the rights granted by Section 262 of the DGCL in lieu of receiving the consideration described above.

Pursuant to the Merger Agreement, our board of directors resolved to recommend that our stockholders vote in favor of approval of the issuance of shares of our Common Stock under the Merger Agreement. In this regard, we agreed to take all action reasonably necessary to obtain such approval as soon as reasonably practicable following execution of the Merger Agreement and receipt of a disclosure letter containing any limitations or qualifications to the representations and warranties made by Peek under the Merger Agreement.

The Merger Agreement contains a number of representations, warranties, and covenants made by each of the Company, the Merger Subs, and Peek as of the date of the Merger Agreement or other specified dates. Certain representations and warranties are qualified by materiality and/or information provided in a disclosure letter delivered pursuant to the Merger Agreement.

The representations and warranties of the parties contained in the Merger Agreement generally survive until the eighteen (18) month anniversary of the closing date. However, certain representations and warranties made by Peek, including those with respect to Peek's organization, standing, and power, capital structure, authority and brokers' and finders' fees (each, a "**Fundamental Representation**") survive until the expiration of the applicable statute of limitations period plus sixty (60) days.

Except for losses arising out of any inaccuracy in or breach of a Fundamental Representation or a breach by Peek of a covenant, we will be indemnified by Peek's stockholders to the extent that the aggregate amount of our losses exceeds $80,000, provided that Peek's stockholders are not responsible for making indemnification payments for such losses in an amount exceeding $800,000, except for our losses resulting from fraud, intentional misrepresentation, or intentional misconduct. Peek's stockholders will indemnify us for an amount up to $8,000,000 for our losses arising out of any inaccuracy in or breach of a Fundamental Representation or a breach by Peek of a covenant. Except for losses by Peek stockholders resulting from fraud, intentional misrepresentation or intentional misconduct, we will indemnify Peek for losses in an amount up to $800,000.

The Merger Agreement contains customary conditions to closing, including the following mutual conditions of the parties: (i) the Merger Agreement having been duly adopted by the vote of a majority of Peek's stockholders; (ii) our having received the necessary approvals from our stockholders for the transactions contemplated by the Merger Agreement; (iii) our having received approval for the listing of additional shares of our Common Stock on Nasdaq for any shares of our Common Stock issuable under the Merger Agreement; (iv) no governmental entity having jurisdiction over any party to the Merger Agreement having enacted, issued, promulgated, enforced, or entered any laws or orders, that make illegal, enjoin, or otherwise prohibit consummation of the transactions contemplated by the Merger Agreement; and (v) all consents, approvals and other authorizations of any governmental entity required to consummate the transactions contemplated by the Merger Agreement having been obtained.

We and Peek may terminate the Merger Agreement at any time prior to closing by mutual consent or to the extent that the transactions contemplated by the Merger Agreement are prohibited by law or a governmental authority has issued a final and non-appealable order restraining or enjoining the transactions contemplated by the Merger Agreement.

Each of the Company and Peek unilaterally may terminate the Merger Agreement if (i) such party is not in material breach of the Merger Agreement and the other party is in material breach of the Merger Agreement and such breach cannot be cured by September 30, 2025, or (ii) the conditions to closing have not been fulfilled by September 30, 2025, except to the extent that such conditions have not been fulfilled due to the failure of such party to perform or comply with any of the covenants, agreements or conditions to be performed or complied with by such party prior to closing.

In April 2025, we entered into the Peek Merger Agreement, whereby we will acquire Peek and its subsidiaries, Lumina Marketing and Lumina Therapeutics. We currently anticipate closing on our acquisition of Peek and the Lumina Entities during the third quarter of 2025.

**The 5P-Model**

We aim to provide value to all stakeholders along the continuum of healthcare delivery in what is known as its "5P" model: Patients, Providers, Pharmacies, Payors or Pharmacy Benefit Managers and Pharmaceutical Manufacturing Companies:

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Our combined synergies position us uniquely to increase patient medication adherence, improve price transparency for all stakeholders, and provide an all-around better patient/pharmacy centric experience.

***Patients***

Our core focus is on patients. Wellgistics Tech & Hub helps patients adhere to complex medication therapies, process refills and manage any side effects and insurance concerns to ensure they get the best standard of care. The clinical efficacy of drug therapies, especially for chronic conditions, is typically enhanced when patients precisely follow their prescribed treatment regimens (including dosing and frequency). We further believe that medication non-adherence (i.e., patients not following the instructions for their medication or failing to finish taking their medication) can contribute to a substantial worsening of disease and, in some cases, accelerated mortality, which increases hospital and other healthcare costs. Through Wellgistics Tech & Hub, we have established benchmarks for patients based on standards set by the Healthcare Effectiveness Data and Information Set, the National Committee for Quality Assurance, and the Utilization Review Accreditation Commission to help patients achieve adherence rates greater than 80 – 90% based on the disease state. We also helps identify third-party funding support programs through Wellgistics Tech & Hub to help cover expensive out-of-pocket costs.

Wellgistics Tech & Hub helps manage patients' complex disease states through counseling and education regarding their treatment and by providing ongoing monitoring and, in some cases, proactive follow-up contact to encourage patient adherence to their prescribed therapy. The goal of Wellgistics Tech & Hub's patient care programs is to provide clinical services in a caring and supportive environment, optimize medication adherence, prevent disease progression and improve therapeutic effectiveness. To accomplish this, Wellgistics Tech & Hub focuses on each patient and provides solutions related to medication access, tolerance and adherence. Further, Wellgistics Tech & Hub's digital pharmacy concept with mobile technology is able to provide these additional benefits:

● *Autonomy*: the ability to select the pharmacy of their choice based on a proprietary algorithm that factors numerous variables and data points for "smart" selection.

● *Convenience*: the ability to receive medication via same-day delivery, mail order and or pick up options. Patients do not need to wait in long lines or waste time. They have a plethora of network pharmacies to choose from.

● *Transparency*: the ability to utilize an easy-to-use application that provides streamlined information and fair market value pricing for services rendered.

● *Cost Savings*: the ability to access competitive pricing with options to process via insurance, cash and or with a drug discount card.

● *Clinical Value*: the ability to have a complete arsenal of clinical services bundled with the application from telehealth, tele-pharmacy, drug interaction reports, basic disease and drug information and refill reminder programs.

***Providers***

Our team will work with provider offices, groups, and account care organizations to manage prior-authorization and other managed care organization requirements, such as the denial and appeal process, to ensure that complicated administrative tasks do not impair the delivery of quality patient care. Our focus on "specialty-lite" and general maintenance conditions will enable us to develop strong relationships with clinical experts and thought leaders in key therapeutic categories. We will leverage these relationships to gain greater visibility into future drug launches and to stay current on the latest advances in patient care.

We will assist prescribers with personalized and intensive patient support by providing care management related to their patients' pharmacy needs and improving patient adherence to therapy protocols. We will eliminate the need for physicians to carry inventories of high-cost prescriptions by distributing medications directly to patients' homes via the Wellgistics Tech & Hub network of independent partner pharmacies. We will also assist providers and their clinical and non-clinical staff members by performing many of the administratively intensive tasks associated with benefits investigations, prior authorizations, and other reimbursement-related matters. Further, we will assist physicians by helping their patients manage the side effects of their therapies and by monitoring adherence. We also will deliver clinical updates in the form of reporting. These reports will be tailored to each organization's requests by our data analytics team. These physicians will provide clinical updates and assist with managing the pipeline of potential new therapies. Our custom de-identified reports will shed light on patients that enroll into patient compliance programs and also provide keen insights on engagements and or interventions made. Our goal is to improve the renumeration potential for these providers by boosting medication adherence and improving their Healthcare Effectiveness Data and Information Set ("**HEDIS**") scores. Further, Wellgistics Health's digital pharmacy concept with mobile technology will be able to provide these additional benefits:

● *Reporting*: Providers too often are disconnected with patients once they leave the practice. Prescriptions can be stopped months before the next office visit, adverse reactions or side effect develop or the medication is transferred to another pharmacy without provider knowledge.

● *Adherence*: Reports demonstrate compliance or adherence issues that can alert providers to become engaged sooner rather than later. The solution we are developing will enable providers to receive data on an easy to use and customizable dashboard that will allow providers to tweak variables associated to adherence.

● *HEDIS*: HEDIS is one of health care's most widely used performance improvement tools. Providers are often reimbursed based on their performance in managing patients. The combination of clinical and concierge services help improve adherence to therapy which in turn boosts HEDIS scores for providers.

● *Convenience*: An all-in-one solution that provides an integrated healthcare ecosystem that revolves around the patient. Instead of sending prescriptions to multiple pharmacies, providers can select one pharmacy which empowers the patient to pick and choose what variables are important to them for dispensing.

● *Efficiency*: Wellgistics Tech & Hub assists patients with locating the best option for their needs while also coordinating benefits such as prior authorizations, applying manufacturing copay cards, analyzing formularies, etc.

***Pharmacies***

Wellgistics Pharmacy acts as a digital non-dispensing pharmacy with the primary goal of routing prescriptions to an independent partner pharmacy based on, for example, patient preference, pharmacy capability, and access to prescription drugs. In the event that a patient elects mail order service delivery, we intend to use the back-end pharmacy to fulfill the prescription for the patient. our relationship with its network of independent pharmacies is expected to help grow their business organically by transmitting prescriptions that we will be able to adjudicate without disrupting pharmacy workflow and causing undue delay to patients. Our networks will be broken down into the following categories:

● *Integrated Network*: in-network independent pharmacies utilizing Best Rx as their pharmacy management software system where our hub technology platform will be able to electronically transfer prescriptions due to the integrations with the software.

● *Soft Network*: in-network independent pharmacies that are not integrated and receive prescriptions transfer via facsimile transmission. This capability will enable us to onboard any of the independent pharmacies in the United States.

● *Retail Network*: out of network pharmacies that have not onboarded with Wellgistics Tech & Hub. Patients reserve the right to have their prescription sent to any of the thousands of pharmacies in the United States. However, they will be unable to manage the prescription via Wellgistics Tech & Hub's mobile technology.

● *Mail Order Network*: Wellgistics Pharmacy serves as our in-network independent pharmacy when patients elect to receive their prescriptions via mail.

Our management believes Wellgistics Tech & Hub's digital pharmacy concept with hub services will be able to provide the following benefits to partner pharmacies who join the Wellgistics Tech & Hub network:

● *Streamlined Workflow*: A key differentiator of Wellgistics Tech & Hub, as compared to other applications or programs claiming to have similar capabilities, is workflow system integration. Wellgistics Tech & Hub integrates with pharmacies' pharmacy management software systems in conjunction with workflow processes to provide an interoperable solution, resolves prior authorizations before the prescription is sent to pharmacy, provides copay collection which is 100% pass through and coordinating the order delivery;

● *Increased Revenue*: Participation in the network will enable pharmacies to receive additional prescriptions outside of their normal patient base. An increase in prescription count will lead to an increase in revenue. Many of the services provided by Wellgistics Tech & Hub also eliminate overhead expenses through automation and patient engagement via the app;

● *Larger Patient Diversification*: Opportunity to scale and reach more patients that may not have heard of the pharmacy. Through the proprietary "smart" pharmacy algorithm, pharmacies are presented to patients based off of their merit and services rendered; and

● *Additional Renumeration Opportunities*: Every prescription dispensed through the network partners will have an opportunity to engage in clinical education services via tele-pharmacy. These consultations provide a unique renumeration opportunity to bill for clinical services with our easy-to-use technology.

***Pharmaceutical Manufacturing Companies***

We believe that we will be able to provide pharmaceutical manufacturers with a strong distribution channel for existing pharmaceutical products through the coverage and clinical expertise of Wellgistics, LLC's main distribution facility in Lakeland, Florida and supporting regional locations. In many cases, our national presence and patient centric care model will be critical to becoming a selected partner in the launch of new products. When providing new products to patients, implementing a monitoring program through Wellgistics Tech & Hub to promote adherence to the prescribed therapy, and subsequently aggregating valuable clinical information on behalf of the manufacturer can significantly aid in pharmaceutical manufacturers' evaluations of product efficacy and general market access. Wellgistics Tech & Hub will receive fees, which we will record as revenue, from certain pharmaceutical manufacturers in return for providing them with a reliable hub pharmacy network and the associated data in the form of reporting or a real-time data analytics dashboard, among other services.

Wellgistics Tech & Hub offers specialized and highly customized prescription programs for pharmaceutical companies to help them optimize, encourage, and track patient adherence, which helps drive the clinical and commercial success of "specialty-lite" and other drug products. Through Wellgistics Tech & Hub's customer engagement call center, Wellgistics Tech & Hub promotes educational, sales, and marketing-related services to help pharmaceutical manufacturers cultivate channel strategies as part of their commercial launch preparation, specifically with pharmacy buyers. Wellgistics Tech & Hub further provides pharmaceutical manufacturers with an established distribution channel for their existing pharmaceuticals and their new product launches. In some cases, Wellgistics Tech & Hub believes that these engagements have led to exclusive rights to administer the products of these pharmaceutical companies or a trial period of exclusivity. The adherence rates that result from the patient-centered services directly benefit pharmaceutical manufacturers through clinically appropriate continuity of care of patients that utilize their products who might otherwise have not achieved full benefit from, or failed to achieve the benefit from, their prescribed therapies. In addition, the financial assistance and reimbursement management Wellgistics Tech & Hub provides to patients from the digital pharmacy division acts further to drive pharmaceutical sales.

Pharmaceutical manufacturers frequently seek patient data on the efficacy and utilization of their products, which Wellgistics Tech & Hub provides in a de-identified format compliant with HIPAA. These data provide valuable drug level and clinical information in the form of effectiveness and adherence data to manufacturers to aid in their evaluation of product safety and efficacy. Wellgistics Tech & Hub continues to make significant investments in technological upgrades that will enable us to better provide these analytical services.

We have identified various manufacturing relationships with commercially available products and intend to actively monitor the drug pipeline and maintain dialogue with a significant number of biotechnology and pharmaceutical manufacturers to identify opportunities in pre- and peri-commercial stages of drug development. We believe that limited distribution has become the delivery system of choice for many drug manufacturers because it is conducive to smaller patient populations, facilitates high patient engagement, provides clinical expertise, and elevates focus on service, managing drug supply, real world utilization and patient specific product experience. We also believe the trend toward limited distribution of specialty drugs will continue to expand, making strong representation in this area essential. The Wellgistics Tech & Hub digital pharmacy concept with hub services can provide these additional benefits to partner pharmacies who join Wellgistics Tech & Hub's network:

● *Reporting*: One of the main components that demonstrates value for manufacturers is reporting metrics. Wellgistics Tech & Hub is able to provide customized reporting on a granular level from its centralized database of pharmacies within the network. This in turn drives value across the supply chain as Wellgistics Tech & Hub uses these rebates or subsidies to drive down costs in other areas for patients, creating a holistic value-based system.

● *Wholesale Operations*: Through its wholesale operations, Wellgistics, LLC is able to provide pharma companies with the ability to leverage Wellgistics, LLC's distribution network of over 5,000 participating pharmacies and serve as a single point for contracting. Wellgistics, LLC is able to handle the ordering and returns associated with product purchases while also working with the pharmacies on fee collection and billing cycles. The ability to eliminate charge backs and effectively conduct revenue cycle management due to Wellgistics Health's cash flow serves as a win-win strategy for all.

● *Third-Party Logistics Provider*: Wellgistics, LLC's warehouse operations can assist new manufacturers with the ability to pick, pack, and ship orders with Wellgistics, LLC's multi-state distribution centers. This removes added operational costs with setting up services in house along with the multitude of operational and administrative costs.

● *Integrated Pharmacy Network with Key Performance Indicators:* Wellgistics Tech & Hub has a robust network of pharmacy providers that span traditional enterprise, regional enterprise, and independent pharmacies via Integral platform and mail order options that are multi- state licensed. Within this vast network, Wellgistics Tech & Hub has carved out a preferred network that is continuously evaluated on key performance indicators such as prescription adherence, refill percentage, prior authorization success, prescription turnaround therapy and prescription days covered. These performance indicators are benchmarks for several national accrediting bodies in pharmacy and are used as the gold standard in selecting pharmacies to have preferred distribution channels for manufacturer direct relationships.

***Payors & Pharmacy Benefit Managers***

With the increasing trend of vertical integration in healthcare, the industry is seeing more alignment across payors, pharmacy benefit managers, pharmacies, specialty pharmacy, digital health, primary care, and in home medical services. The notable acquisitions in the payor and pharmacy benefit manager space include CVS/Caremark and Aetna, United Healthcare and Optum Rx, and Cigna and Express Scripts. Many of the other pharmacy benefit managers have similar relationships including Prime Therapeutics and Blue Cross Blue Shield, Humana and DST Solutions, and the recent acquisitions made by Anthem.

With healthcare systems shifting from fee-for-service to value-based care, these companies are looking for strategic acquisitions or partnerships to taper the rising cost of healthcare. Self-funded organizations are on the rise and added government and regulatory pressure on the pharmacy benefit manager industry as a whole is priming this market to re-evaluate antiquated business models and foster an environment with better pricing transparency. Managed care models such as per member per month with revenue sharing on savings has become largely popular in the healthcare space. Although we are not currently servicing a payor or pharmacy benefit manager today, we see this as an opportunity to penetrate this market based on synergistic services aimed at controlling high drug spend and improving patient outcomes. Further, our management believes that Wellgistics Tech & Hub's digital pharmacy concept with mobile technology is able to provide payors and pharmacy benefit managers with aggregate data to provide these additional benefits:

● *Compliance (Programs)*: Enrolling patients into loyalty programs that rewards them for adherence to therapies, participation or patient engagement in clinical education programs that directly impact patient behavior and refill reminder programs to alert patients to stay on top of medication management.

● *Compliance (Therapy)*: Programs with healthcare professionals spanning from Board-Certified Medical Providers for telehealth services to Clinical Pharmacists for tele-pharmacy services such as initial prescription counseling, monitoring side effects, adverse drug event reporting and medication therapy management.

● *Compliance (Costs)*: Providing patients with cash-alternative options to supplement the expenses of insurance-based services. For payor's lacking an integrated pharmacy benefit manager, Wellgistics Tech & Hub can serve as an integrated healthcare ecosystem providing mail order service, an integrated pharmacy network, and wholesale prescription acquisition pricing.

● *Compliance (Transportation)*: A well-known barrier to patient adherence for medical visits and prescription therapy is transportation impediments. Wellgistics Tech & Hub solves this issue for patients by working with national delivery partners and getting meds to the doors of patients.

● *Reducing Expenses*: Through the various synergistic clinical programs, Wellgistics Tech & Hub plays a direct role in improving patient outcomes which aid payors and pharmacy benefit managers in reducing long-term costs associated with nonadherence such as hospitalizations and procedures.

**Vendors/Suppliers**

Wellgistics Tech & Hub obtains the pharmaceuticals and medical supplies that it provides to its patients through AmerisourceBergen, Wellgistics, LLC, and other secondary wholesalers for Wellgistics Pharmacy. We consider AmerisourceBergen to be the primary wholesaler due to the wide array of products AmerisourceBergen carries to service general and specialty-lite medications required by Wellgistics Tech & Hub's patient population. Additionally, Wellgistics, LLC has direct contracts with several pharmaceutical manufacturers to offer the services of Wellgistics Tech & Hub and as part of that relationship, Wellgistics, LLC is able to source directly from these manufacturers for Wellgistics Pharmacy. In the event of a termination of Wellgistics Tech & Hub's relationship with AmerisourceBergen, we believe that we will be able to locate at least one alternative drug wholesaler from whom we could source each indirectly purchased drug that is dispensed. We further believes that we could replace the inventories without a material disruption to its operations. However, certain pharmaceuticals, such as the specialty-lite and other niche drugs that are purchased directly from pharmaceutical manufacturers, may not be available from any other source.

On the wholesale side, Wellgistics, LLC sources products directly from pharmaceutical manufacturers. On occasion, Wellgistics, LLC may purchase products from other distributors when an opportunity presents based on pricing and Wellgistics, LLC's ability to move that product within its network of purchasing pharmacies. Most of the manufacturers of the pharmaceuticals Wellgistics, LLC sells have the right to cancel their supply contracts with Wellgistics, LLC without cause and after giving notice (generally 90 days or less).

**Billing and Significant Payers**

Wellgistics Pharmacy will derive revenue for us on the pharmacy side from contracts with third-party payers such as insurance companies, self-insured employers, pharmacy benefit managers, and Medicare and Medicaid programs. Wellgistics Pharmacy contracts directly with most payers and pharmacy benefit managers and, in other limited cases, with third parties which in turn contract with payers and pharmacy benefit managers on our behalf.

Wellgistics Pharmacy bills payers and track accounts receivable through computerized billing systems. These systems allow our billing staff the flexibility to review and edit claims in the system before claims are submitted to payers. For the great majority of dispensing business, claims are submitted to payers electronically. Wellgistics Pharmacy has extensive experience managing the coordination of benefits between commercial and government-sponsored plans, and primarily participates in the Medicare Part D program. A benefit coverage specialist reviews all Medicare coverage determinations to ensure that the appropriate benefit is being billed. Upon completion of all benefit verifications, they follow each plan's guidelines to identify which plan is primary and secondary and submit the billing accordingly.

Our financial and operational performance will be highly dependent upon effective billing and collection practices as well as the use of our technology to adequately supply the network with prescription transfers that are able to be adjudicated at the dispensing pharmacy. The process will begin with an accurate and complete patient onboarding process, in which all critical information about the patient, the patient's insurance and the patient's care needs will be gathered. A critical part of this process will be verification of insurance coverage and authorization from insurance to provide the required care, which typically takes place before the initiation of services.

**Competition**

There are a significant number of competitors that distribute/wholesale specialty pharmacy drugs, perform digital pharmacy services, including but not limited to hub and clinical services, and provide other pharmacy-oriented services that would compete with our healthcare ecosystem. Some of these competitors have greater resources than us. Many of the competitive segments in which we will compete have experienced significant consolidation over the past few years as described further in the section entitled "*Risk Factors*" in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the SEC, and in reports subsequently filed with the SEC, including our Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus.

The leading payors and drug chains have completed extensive mergers and acquisitions transactions and business combinations, and, therefore, have significantly greater market share, resources and purchasing power than we do and, in the aggregate, these competitors generally have access to substantially the same limited distribution drugs as our current and planned operating subsidiaries. These competitors also benefit from their acquisition activity with healthcare organizations, as we have seen recent acquisitions in the home healthcare and primary care services arena (i.e., One Medical, Signify Health, Village MD, Summit Health, CareCentrix, among others).

Digital pharmacies both national and regional have been increasingly entering the market over the course of the last decade with well-known players such as Roman, Lemonaid Health, ForHims, TruePill, and PillPack (acquired by Amazon). At the regional level, we have seen the emergence of companies like Capsule, Alto, and many others looking to penetrate markets and gain access to lives by looking for additional points of differentiation. The competitive healthcare landscape combined with macroeconomic pressures have resulted in increased chapter 11 filings for bankruptcy and or other means of dissolution for certain companies such as Medley, NowRx, AmazonCare, Haven (the joint venture of Amazon, Berkshire Hathaway, and JPMorgan Chase) over recent years. Many of these companies leverage access to telehealth services and backend partnerships with mail order pharmacies to provide consumers with cash-paying models for access to niche services. The evolution of centralized digital patient support networks with network pharmacies has also recently been gaining steam.

Below is a 2025 Snapshot of Vertical Integration amongst key healthcare stakeholders/entities that may compete with our business:

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Source: https://www. https://www.drugchannels.net/2025/04/mapping-vertical-integration-of.html.

Our management believes that we differentiate ourself from our competitors in several key aspects that place us in a prime position to positively impact overall patient outcomes while generating gross revenues. Our primary differentiator is our focus on the local independent pharmacy segment. Competing digital pharmacies rely on centralized processing facilities and delivery through mail that can take days for fulfillment. We aim to leverage the brick-and-mortar infrastructure of thousands of independent, locally-owned pharmacies to create a powerful combination of a best-in-class digital platform with a network of local pharmacies capable of delivering prescriptions to patients in hours. Additionally, these accessible healthcare providers are known for their clinical expertise and personalized face-to-face patient relationships that deliver improved health outcomes. The independent pharmacy channel is a viable segment with over 19,000 pharmacies nationally, representing over a $47 billion market (at wholesale cost) that fills 1.3 billion prescriptions annually. Independent pharmacists are rooted in their communities and are well-respected members of the healthcare team. Wellgistics Tech & Hub will provide connective technology between providers and pharmacies, offering back-office efficiencies including prior authorizations and apply manufacturer copay or cash discount cards as appropriate. Wellgistics Tech & Hub technology utilizes an integrated model with pharmacy systems and provides patients with a holistic end-to-end solution that fosters an environment of access, price transparency, and digital convenience. National pharmacy chains have the resources to invest in technology but are struggling financially and facing pharmacist and labor shortages. Our solutions provide independent pharmacists with the technology they need to compete and leverage their local presence and patient care expertise. Therefore, our affiliation with independent pharmacies will be different from the national and regional enterprise pharmacy systems.

On the wholesale side, Wellgistics, LLC's product lines are designed to carry specialty lite and niche pharmaceutical products that improve margins for all stakeholders. New emerging to midsize manufactures are increasingly looking for supply chain flexibility as launching drugs into retail channels through the "Big 3" wholesalers is proving to be cost prohibitive. Wellgistics, LLC provides alternative distribution solutions for these manufacturers. Lastly, our data science methodology for capture, analysis, and promotion will be exemplary and will serve as a key channel for monetization from manufactures, providers, and payors.

**Sales and Marketing**

Our sales and marketing efforts will focus on three primary objectives: (1) establishing, maintaining and strengthening relationships with pharmaceutical manufacturers to gain distribution access as such manufacturers release new or improved products to carry within Wellgistics, LLC's wholesale distribution network and also to perform hub and clinical services through Wellgistics Tech & Hub; (2) establishing, maintaining and strengthening relationships with provider groups, account care organizations, and other key opinion leaders to obtain prescription referrals for Wellgistics Pharmacy and Wellgistics Tech & Hub; (3) building new relationships with pharmacy management software system providers and the recruitment of independent pharmacies utilizing that software to be part of our integrated pharmacy network; and (4) building new relationships with managed care organizations, hospitals, health systems, telehealth companies, employer groups, and other payers or pharmacy benefit managers. We will integrate national and regional sales teams to focus on establishing and expanding our pharmacy footprint and product pipelines and integrate account managers to focus on maximizing value for purchasing pharmacies and the network. We also will have a dedicated sales force, through a combination of internal (phone sales) and external (field sales) team members for scalability and efficiency. In addition, our sales team will be focused on maintaining and expanding relationships with biotechnology and specialty drug manufacturers to establish its position as an exclusive, semi-exclusive, or participating provider.

**Information Technology**

Wellgistics Tech & Hub has robust information technology capabilities that are relevant to all stakeholders across the healthcare continuum, and equips the development, quality assurance, and support and monitoring teams with patent pending proprietary systems that fosters medication adherence. The overall platform solution is comprised of the following suite of products: direct-to-consumer facing mobile applications available on the Apple App Store and Google/Android Play Store, an administrative panel similar to a customer relationship management panel that exposes data to frontend customer service and operations teams, an administrative panel mobile application, a comprehensive sales dashboard, and an agnostic core engine that serves as a centralized data reservoir which enables our platform to integrate with various third-party partners to drive our end-to-end solution while communicating seamlessly with all of the products within the technology stack.

Specifically, our direct-to-consumer and administrative mobile applications were developed using Dart and Flutter code and programs. Dart is a general-purpose programming language used to develop front-end applications, specifically mobile applications like Wellgistics Tech & Hub, web, and server applications. Flutter is a user interface toolkit that works in conjunction with Dart for the development of our Wellgistics Tech & Hub mobile application. The two work like hand-in-glove, thereby allowing our applications to utilize ahead-of-time and just-in-time compilation, enabling our apps to start faster and run smoother all of which deliver a comprehensive and seamless user interface and experience for users. The administrative panel utilizes Angular and TypeScript, which are derivatives of JavaScript, a programming language that provides the framework for these web-based portals allowing our customer service and operations teams to review data and drive actionable outcomes through a dedicated dashboard with varying levels of permissions for user access. The administrative panel can be customized to provide dedicated dashboards to a broad range of constituents including providers, pharma manufacturers, pharmacies, and ultimately payors.

The core engine is our centralized data repository where all third-party partners are integrated. Our core is agnostic, enabling us to integrate with numerous partners in the same space, thus providing redundancies to drive overall reliability. Examples of these third-party partners at a high-level include pharmacy management software systems, ride sharing partners for same and next-day delivery, carriers for shipping, point-of-sale systems, numerous databases for service specific requests that consumers and stakeholders have grown accustomed to using with other applications, among many others. Overall, our solution is hosted via Amazon Web Services and our data is organized using Microsoft SQL and Amazon Relational Database Services.

Wellgistics Tech & Hub is integral to our combined company as it is the focal point that interconnects the various business segments: wholesale, tech & hub, and pharmacy operations through our proprietary platform that drives value to all constituents, patients, providers, pharmacies, pharma manufacturers, and payors. The data that is received is then aggregated and reported on through our combined business units enabling our company to provide HIPAA-compliant reporting that contains inventory data, prescription status, adherence, compliance, discontinuation, and payer data for various healthcare stakeholders. In addition to reporting, we are able to provide patient and prescriber demographics, turnaround times, spend and error reporting, patient assessment data, clinical status, and other monitoring parameters. Moreover, this data is aggregated to provide actionable means to improve patient outcomes while also fostering medication compliance. Wellgistics Tech & Hub has invested significantly in information technology in recent years to position it as a vital component of the healthcare ecosystem that will improve cost efficiencies and service delivery while also impacting outcomes and business decisions for providers, pharmaceutical manufacturers, and payors through our pharmacy channel.

**Properties**

We currently lease our corporate offices.

**Governmental Regulation**

The healthcare industry is subject to extensive regulation by several governmental entities at the federal, state and local level. The industry is also subject to frequent regulatory change. Laws and regulations in the healthcare industry are extremely complex and, in many instances, the industry does not have the benefit of significant regulatory or judicial interpretation. These regulations may have a significant impact on us and our existing and planned operating subsidiaries as summarized in the risk factors under the heading "*Risk Factors*" in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the SEC, and those risk factors identified in reports subsequently filed with the SEC, including our Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus.

**Professional Licensure**

Pharmacists and pharmacy technicians employed by us must be individually licensed or certified under applicable state law. In addition, professionals licensed to dispense controlled substances are required to register with the United States Drug Enforcement Agency (the "**DEA**"). Each of our existing and planned operating subsidiaries performs criminal, government exclusion and other background checks on employees and take steps to ensure that employees possess all necessary licenses, certifications and registrations to perform the duties of their respective positions.

**Pharmacy Licensing and Registration**

State laws require a pharmacy to be licensed in each jurisdiction in which the pharmacy anticipates dispensing or distributing pharmaceutical products. Wellgistics, LLC is licensed in all 50 states for its wholesale operations. Wellgistics Pharmacy is licensed in 35 states and the District of Columbia for its pharmacy operations. Wellgistics Pharmacy will pursue additional state licenses to be able to dispense in all 50 states when patients elect to use mail order as their method of receipt for prescription medications. Where required by law, Wellgistics Pharmacy also has pharmacists licensed in all states in which it dispenses. Each of our existing and planned operating subsidiaries must comply with all state licensing laws that are applicable to its respective business.

Federal and state law also require pharmacy businesses and wholesale operations businesses to individually register with the DEA and, as applicable, certain state agencies to handle controlled substances, including prescription pharmaceuticals. A separate registration is required at each principal place of business where we will dispense controlled substances. Federal and state law also require compliance with specific labeling, reporting and record-keeping requirements for controlled substances. We will maintain DEA registrations for each of its facilities that requires such registration and will follow procedures intended to comply with all applicable federal and state requirements regarding controlled substances.

**Food, Drug and Cosmetic Act**

Certain provisions of the federal Food, Drug and Cosmetic Act govern the handling, distribution and compounding of pharmaceuticals and medical devices. This law prohibits the adulteration or misbranding of these products while in interstate commerce. Companies engaged in drug and device distribution may be required to register their facilities with FDA, comply with track and trace requirements, and operate their businesses according to appropriate quality standards. The law applies to all parts of the drug and device distribution chain, but does exempt pharmacies from most federal registration, labeling and packaging requirements as long as any drugs or medical devices are not adulterated or misbranded and are dispensed in accordance with and pursuant to a valid prescription.

**Fraud and Abuse Laws — Anti-Kickback Statute**

The federal Anti-Kickback Statute prohibits individuals and entities from knowingly and willfully paying, offering, receiving, or soliciting money or anything else of value in order to induce the referral of patients or to induce a person to purchase, lease, order, arrange for, or recommend services or goods covered by Medicare, Medicaid, or other federal healthcare programs. The federal courts have held that an arrangement violates the Anti-Kickback Statute if any one purpose of the remuneration is to induce the referral of patients covered by a federal health care program, even if another purpose of the payment is to compensate an individual for rendered services. The Anti-Kickback Statute is broad and potentially covers many standard business arrangements. Violations can lead to significant penalties, including criminal fines of up to $100,000 per violation and/or ten years imprisonment, civil monetary penalties of up to $100,000 per violation plus treble damages and/or exclusion from participation in Medicare, Medicaid and other federal healthcare programs. Certain types of payments are excluded from the statutory prohibition. Additionally, in an effort to clarify the conduct prohibited by the Anti-Kickback Statute, the Office of the Inspector General publishes regulations that identify a limited number of safe harbors. Business arrangements that satisfy all of the elements of a safe harbor are immune from criminal enforcement or civil administrative actions. The Anti-Kickback Statute is an intent-based statute and the failure of a business relationship to satisfy all of the elements of a safe harbor does not, in and of itself, mean that the business relationship violates the Anti-Kickback Statute.

The Office of the Inspector General, in its commentary to the safe harbor regulations, has recognized that many business arrangements that do not satisfy a safe harbor nonetheless operate without the type of abuses the Anti-Kickback Statute is designed to prevent. The Office of the Inspector General is authorized to issue advisory opinions regarding the interpretation and applicability of the Anti-Kickback Statute, including whether an activity constitutes grounds for the imposition of civil or criminal sanctions.

Several states have statutes and regulations that prohibit the same general types of conduct as those prohibited by the Anti-Kickback Statute described above. Some state anti-fraud and anti-kickback laws apply only to goods and services covered by Medicaid. Other state anti-fraud and anti-kickback laws apply to all healthcare goods and services, regardless of whether the source of payment is governmental or private. Where applicable, each of Wellgistics Health's existing and planned operating subsidiaries its business relationships to comply with these statutes and regulations.

**Fraud and Abuse Laws — False Claims Act**

All providers and entities that submit to and receive payments from a government health care program are subject to state and federal laws that govern the submission of claims for reimbursement, including the False Claims Act (the "**FCA**") in the case of claims submitted to Medicare or another federal health care program. The FCA prohibits an individual or entity from knowingly presenting a claim, or causing a claim to be presented, for payment from a federal healthcare program that is false or fraudulent. The standard for "knowingly" includes conduct that amounts to a reckless disregard for the truth or falsity of the information presented to Medicare or the other applicable government payer. Penalties under the FCA include substantial civil and criminal fines, exclusion from the Medicare or Medicaid programs and imprisonment. The FCA may be enforced by the federal government directly or by a private plaintiff by filing a qui tam lawsuit on the government's behalf. Under the FCA, the government and private plaintiffs, if any, may recover monetary penalties in the amount of $13,946 to $27,894 per false claim (for penalties assessed after January 15, 2024), as well as an amount equal to three times the amount of damages sustained by the government as a result of the false claim. Several states have adopted their own false claims statutes as well as statutes that allow individuals to bring qui tam actions. In recent years, federal and state government authorities have launched several initiatives aimed at uncovering practices that violate false claims or fraudulent billing laws, and they have conducted numerous investigations of pharmaceutical manufacturers, pharmacy benefit managers, pharmacies and healthcare providers with respect to false claims, fraudulent billing and related matters.

**Fraud and Abuse Laws — Physician Self-Referral (Stark) Law**

The federal Physician Self-Referral Law, commonly known as the Stark Law, prohibits a physician from referring a patient for designated health services payable by Medicare or Medicaid from an entity with which the physician or an immediate family member has a financial relationship, unless an exception applies. A financial relationship is generally defined as an ownership, investment, or compensation relationship. Designated health services include, but are not limited to, outpatient prescription drugs, parenteral and enteral nutrition products, home health services, durable medical equipment, physical and occupational therapy services, and inpatient and outpatient hospital services. The Stark Law also prohibits an entity from presenting or causing to be presented a bill or claim to anyone for designated health services furnished as a result of a prohibited referral.

Among other sanctions, a civil monetary penalty of up to $15,000 may be imposed for each claim for a service prohibited by the Stark Law. Such persons or entities are also subject to exclusion from the Medicare and Medicaid programs. Any person or entity participating in a circumvention scheme to avoid the referral prohibitions is liable for a civil monetary penalty of up to $100,000. A $10,000 fine may be imposed for failure to comply with reporting requirements regarding an entity's ownership, investment and compensation arrangements for each day for which reporting is required to have been made under the Stark Law.

The Stark Law is a broad prohibition on certain business relationships, with detailed exceptions. However, unlike the Anti-Kickback Statute under which an activity may fall outside a safe harbor and still be lawful, a referral for designated health services that does not fall within an exception is strictly prohibited by the Stark Law. The Stark Law is a strict liability statute, and proof of intent to violate the law is not required.

In addition to the Stark Law, many of the states in which our existing and planning operating subsidiaries operate have comparable restrictions on the ability of physicians to refer patients for certain services to entities with which they have a financial relationship. Certain of these state statutes mirror the Stark Law while others may be more restrictive.

**HIPAA and Other Privacy Legislation**

Some of our business activities do or will involve the receipt, use and disclosure of confidential health information, including disclosure of the confidential information to a patient's health benefit plan, as permitted in accordance with applicable federal and state privacy laws. In addition, we will use and disclose de-identified data for analytical and other purposes. Many federal and state laws restrict the use and disclosure of confidential medical information, and additional legislative and regulatory initiatives are underway at the state and federal levels.

HIPAA imposes extensive requirements on the way in which certain "covered entities," which include healthcare providers that engage in certain transactions covered by the Health Insurance Portability and Accountability Act of 1996 ("**HIPAA**"), use, disclose and safeguard patient health information, including requirements to protect the integrity, availability and confidentiality of electronic patient health information. It also applies to persons or entities that create, receive, maintain, or transmit patient health information on behalf of covered entities (known as "business associates") and their subcontractors.

The privacy regulations issued by the Office of Civil Rights of United States Department of Health and Human Services ("**HHS**") pursuant to HIPAA give individuals a number of rights, including the right to know how their patient health information is used and disclosed, as well as the right to access, amend and obtain information concerning certain disclosures of patient health information.

Covered entities, such as pharmacies and health plans, are required to provide a written Notice of Privacy Practices to individuals that describes how the entity uses and discloses patient health information, and how individuals may exercise their rights with respect to their patient health information. For most uses and disclosures of patient health information other than for treatment, payment, healthcare operations and certain public policy purposes, HIPAA generally requires that covered entities obtain a valid written individual authorization. In most cases, use or disclosure of patient health information must be limited to the minimum necessary to achieve the purpose of the use or disclosure.

DelivMeds and CSP are each considered a covered entity under HIPAA in connection with their operation when working with other network pharmacies. To the extent that they provide services other than as a covered entity and perform a function or activity, or provide a service to, a covered entity that involves patient health information, the covered entity may be required to enter into a business associate agreement with Wellgistics Health. Business associate agreements mandated by the Privacy Rule will create a contractual obligation for Wellgistics Health, as a business associate, to perform its duties for the applicable covered entity in compliance with the Privacy Rule and applicable provisions of the Security Rules. In addition, Wellgistics Health will be subject to certain aspects of the Privacy Rule and the Security Rules when it acts as a business associate, including direct liability for, among other things, impermissible uses and disclosures of patient health information and the failure to disclose patient health information to the covered entity, the individual, or the individual's designee (as specified in the business associate agreement), as necessary to satisfy a covered entity's obligations with respect to an individual's request for an electronic copy of patient health information. These obligations also extend to subcontractors of a business associate where the function, activity, or service delegated by the business associate to the subcontractor involves the creation, receipt, maintenance, or transmission of patient health information. As such, business associates are required to enter into business associate agreements with subcontractors for services involving access to patient health information and may be subject to civil monetary penalties for the acts and omissions of their subcontractors. HIPAA also requires individual authorization for all treatment and healthcare operations communications where the covered entity receives payment in exchange for the communication from or on behalf of a third-party whose product or service is being described.

If one of our businesses fails to comply with HIPAA, or its policies and procedures are not sufficient to prevent the unauthorized use or disclosure of patient health information, it could be subject to monetary penalties, fines and legal action under federal and state privacy laws, consumer protection statutes and other laws. Criminal penalties and civil sanctions may be imposed for failing to comply with HIPAA standards either as a covered entity or business associate. In addition to imposing potential monetary penalties, the Office of Civil Rights of HHS conducts periodic compliance audits and empowers state attorneys general to bring actions in federal court for violations of HIPAA on behalf of state residents harmed by such violations.

Several such actions have already been brought, and continued enforcement actions are likely to occur in the future. The transactions and code sets regulation promulgated under HIPAA requires that all covered entities that engage in certain electronic transactions, directly or through a third-party agent, use standardized formats and code sets. Each of Wellgistics Tech & Hub and Wellgistics Pharmacy must conduct such transactions in accordance with such transaction rule and related regulations that require the use of operating rules in connection with HIPAA transactions. In Wellgistics Tech & Hub's and Wellgistics Pharmacy's roles as a specialty pharmacy operator, we will also be required to conduct such transactions in accordance with such regulations or engage a clearinghouse to process each covered transaction. HHS promulgated a final rule that requires covered entities to utilize National Provider Identifiers in all standard transactions. National Provider Identifiers replaced National Association of Boards of Pharmacy numbers for pharmacies, DEA numbers for physicians and similar identifiers for other healthcare providers for purposes of identifying providers in connection with HIPAA standard transactions. Covered entities may be excluded from federal healthcare programs for violating these regulations.

The security rules issued pursuant to HIPAA mandate the use of administrative, physical and technical safeguards to protect the confidentiality of electronic patient health information. Such obligations apply to covered entities and business associates.

Wellgistics Tech & Hub and Wellgistics Pharmacy must also comply with the "breach notification" regulations under HIPAA. In the case of a breach of "unsecured patient health information," covered entities must promptly notify affected individuals and the HHS Secretary in cases where a beach of "unsecured patient health information" affects 500 or more individuals. Wellgistics Tech & Hub and Wellgistics Pharmacy must also promptly notify the media in cases where a breach of "unsecured patient health information" affects more than 500 individuals in a particular state or jurisdiction. Breaches of "unsecured patient health information" affecting fewer than 500 individuals must be reported to the HHS Secretary on an annual basis. The regulations also require business associates of covered entities to notify the covered entity of such breaches of "unsecured patient health information" by the business associate.

Other health reform laws require the HHS Secretary to develop new health information technology standards that could require changes to the existing Wellgistics Tech & Hub and Wellgistics Pharmacy software products. For example, the statute requires the establishment of interoperable standards and protocols to facilitate electronic enrollment of individuals in federal and state health and human services programs and provides the government with authority to require incorporation of these standards and protocols in health information technology investments as a condition of receiving federal funds for such investments.

HIPAA generally preempts state laws, except when state laws are more protective of individual health information than HIPAA requirements. Therefore, to the extent states continue to enact more stringent, protective, or restrictive legislation, Wellgistics Tech & Hub and Wellgistics Pharmacy could be required to make significant changes to their business operations. In addition, independent of any statutory or regulatory restrictions, individual health plan clients could increase limitations on the use by Wellgistics Tech & Hub and Wellgistics Pharmacy of medical information, which could prevent us from offering certain services.

**Medicare Part D**

The Medicare Part D program, which makes prescription drug coverage available to eligible Medicare beneficiaries, regulates various aspects of the provision of Medicare drug coverage, including enrollment, formularies, pharmacy networks, marketing, and claims processing. The Centers for Medicare & Medicaid Services ("**CMS**") imposed restrictions and consent requirements for automatic prescription delivery programs, and further limited the circumstances under which Medicare Part D plans may recoup payments to pharmacies for claims that are subsequently determined not payable under Medicare Part D. Examples of CMS sanctions for non-compliance may include suspension of enrollment and even termination from the program.

The Medicare Part D program has undergone significant legislative and regulatory changes since its inception. Medicare Part D continues to attract a high degree of legislative and regulatory scrutiny, and applicable government rules and regulations continue to evolve. For example, CMS may issue regulations that limit the ability of Medicare Part D plans to establish preferred pharmacy networks.

**Accreditations**

Where applicable, our licensed facilities will maintain accreditations from the following organizations:

●  ***ADD from the National Association of Boards of Pharmacy*** : Wellgistics, LLC holds an Accredited Drug Distributor (formerly known as "Verified Accredited Wholesale Distributor"), accreditation from the National Association of Boards of Pharmacy. This accreditation is designed to comply with state and federal laws for preventing counterfeit drugs from entering the United States. and to protect patients from below- quality drug distribution by employing security and best practice standards for wholesale drug distribution.

●  ***HMA from the National Association of Boards of Pharmacy*** : Wellgistics Tech & Hub and Wellgistics Pharmacy hold an Healthcare Merchant Accreditation (formerly known as "Safe Pharmacy") from National Association of Boards of Pharmacy. This accreditation is designed for online advertising platforms and card brand networks which demonstrate compliance with state and federal laws for pharmacies. It is also a prerequisite for Digital Pharmacy Accreditation, which we will actively pursue.

●  ***Healthcare Broker Platform Certification from LegitScript*** : Wellgistics Tech & Hub holds a Healthcare Merchant Certification from LegitScript. This certification provides a recognized stamp of approval for businesses that facilitate transaction for pharmacies. Wellgistics Tech & Hub remains payment card industry compliant, as its platform technology does not retain credit card information within its application or servers.

●  ***Healthcare Platform Certification from LegitScript*** : Wellgistics Pharmacy holds a Healthcare Merchant Certification from LegitScript. This certification provides a recognized stamp of approval for businesses that conduct some aspect of pharmacy including but not limited to internet, mail order, brick-and-mortar, local, veterinary, and sterile compounding pharmacies.

**Intellectual Property**

We and our combined businesses rely or will rely on copyright, trademark, and trade secret laws, in addition to contractual restrictions, to establish and protect their proprietary rights. We will have registered or applied to register a variety of trademarks and service marks used throughout our businesses. DelivMeds<sup>®</sup> and DelivMeds Pharmacy<sup>®</sup> are service marks registered with the United States Patent Trademark Office. Specifically, a United States Non-Provisional Patent Application for a Utility Patent was filed on July 26, 2022, and the application was successfully submitted on September 26, 2023. The patent is entitled "Method and Apparatus for Prescription Management." This patent protects our novel mechanisms for digitizing the prescription journey and management of said prescription through the use of our tech and hub platform including its proprietary process and methodology including but not limited to source code, data aggregation, and use of artificial intelligence and machine learning for our algorithms.

In addition, we and our combined businesses rely on unregistered common law trademark rights and unregistered copyrights under applicable United States law to distinguish and/or protect their services and branding. We are not aware of any facts that could materially impact our continuing use of any of our intellectual property. We do not believe that the loss of copyrights, trademarks, or service marks would have a material adverse effect on our business.

**Employees**

As of August 20, 2025, we employed 27 employees, including those employed by Wellgistics, LLC, Wood Sage, Wellgistics Tech & Hub, and Wellgistics Pharmacy. We also have numerous non-employee contractor relationships with consultants and full stack technology developers.

**Legal Proceedings**

As of the date of the registration statement of which this prospectus forms a part, we and our subsidiaries are not parties to any material pending legal proceedings.

 **Recent Developments**

Effective August 26, 2025, the Company entered into a Business Loan and Security Agreement with Agile Capital Funding, LLC for a principal amount of $1,300,000 (the "***Agile Loan***"). The loan does not bear a stated interest rate; instead, the debt discount represents the implied borrowing cost. The loan matures in April 2026, and is repayable in weekly installments of $58,500. A portion of the Agile Loan was used to satisfy previously outstanding amounts under (i) that certain Business Loan and Security Agreement dated as of May 14, 2025, among Agile Capital Funding, LLC, Wellgistics Health, Inc., and Wellgistics, LLC and (ii) that certain Agreement for the Purchase and Sale of Future Receipts dated June 25, 2025 by and between Wellgistics Health, Inc. and Agile Capital Funding, LLC. The Company received approximately $500,000 in cash proceeds. The Company intends to utilize the net proceeds of the Agile Loan for general working capital purposes. The Agile Loan is secured by certain assets of the Company not otherwise secured in its other financing arrangements.

**DESCRIPTION OF SECURITIES WE ARE OFFERING**

We are offering up to shares of Common Stock, together with Warrants to purchase up to shares of Common Stock. We are also offering Pre-Funded Warrants to purchase up to shares of Common Stock to those purchasers, whose purchase of shares of Common Stock in this offering would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock following the consummation of this offering in lieu of the shares of our Common Stock that would result in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%). Each Pre-Funded Warrant will be exercisable for one share of Common Stock. The shares of Common Stock or Pre-Funded Warrants, as the case may be, and the accompanying Warrants, can only be purchased together in this offering, but the shares of Common Stock (or Pre-Funded Warrants in lieu thereof) and accompanying Warrants are immediately separable and will be issued separately in this offering. We are also registering the shares of Common Stock issuable from time to time upon exercise of the Pre-Funded Warrants and Warrants offered hereby.

**Common Stock**

The description of our Common Stock under the section of this prospectus entitled "*Authorized and Outstanding Capital Stock*" is incorporated herein by reference.

**Warrants**

The following summary of certain terms and provisions of the Warrants included with the shares of Common Stock and the Pre-Funded Warrants that are being issued hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the Warrants, the form of which will be filed as an exhibit to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of Warrant for a complete description of the terms and conditions of the Warrants.

 

*Duration and Exercise Price*

 

Each Warrant offered hereby will have an exercise price of $ per share and will be exercisable beginning on the effective date of the Warrant Stockholder Approval, provided however, if the Pricing Conditions are met, the Warrants will be exercisable on the Initial Exercise Date. The Warrants will expire on the 5-year anniversary of the Initial Exercise Date. The exercise price and number of shares of Common Stock issuable upon exercise of the Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our Common Stock and the exercise price. The Warrants will be issued separately from the Common Stock and Pre-Funded Warrants and may be transferred separately immediately thereafter. The Warrants will be issued in certificated form only.

We intend to promptly, and in no event later than 90 days after the consummation of this offering, seek the Warrant Stockholder Approval for the issuance of shares of Common Stock issuable upon exercise of the Warrants but we cannot assure you that such stockholder approval will be obtained, provided, that, if, and only if, the Pricing Conditions are satisfied, we will not seek the Warrant Stockholder Approval as such stockholder approval will not be required. We have agreed with the investors in this offering that, if we do not obtain stockholder approval for the issuance of the shares of Common Stock upon exercise of the Warrants at the first stockholder meeting for such purpose after this offering, we will call a stockholder meeting every 90 days thereafter until the earlier of the date we obtain such approval or the Warrants are no longer outstanding, provided, that, if, and only if, the Pricing Conditions are satisfied, we will not seek the Warrant Stockholder Approval as such stockholder approval will not be required.

 

*Exercisability*

 

The Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the Warrant to the extent that the holder would own more than 4.99% (or, at the election of the purchaser prior to the issuance of the Warrants, 9.99%) of the outstanding Common Stock immediately after exercise. Following the issuance of the Warrants, upon notice from the holder to us, the holder may increase or decrease the amount of beneficial ownership of outstanding stock after exercising the holder's Warrants up to 9.99% of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants and in accordance with the rules and regulations of the SEC, provided that any increase in the beneficial ownership limitation shall not be effective until 61 days following notice to us.

 

*Cashless Exercise*

 

If, at the time a holder exercises its Warrants, a registration statement registering the issuance of the shares of c Common Stock underlying the Warrants under the Securities Act is not then effective or available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the Warrants.

 

*Fractional Shares*

 

No fractional shares of Common Stock will be issued upon the exercise of the Warrants. Rather, the number of shares of Common Stock to be issued will be rounded up to the next whole share or we will pay a cash adjustment equal to such fraction multiplied by the exercise price to the holder.

 

*Transferability*

 

Subject to applicable laws, a Warrant may be transferred at the option of the holder upon surrender of the Warrant to us together with the appropriate instruments of transfer.

 

*Trading Market*

 

There is no trading market available for the Warrants on any securities exchange or nationally recognized trading system, and we do not expect a trading market to develop. We do not intend to list the Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the Warrants will be extremely limited. The Common Stock issuable upon exercise of the Warrants is currently listed on Nasdaq.

*Right as a Stockholder*

 

Except as otherwise provided in the Warrants or by virtue of such holder's ownership of shares of our Common Stock, the holders of the Warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, until they exercise their Warrants.

*Fundamental Transaction*

 

In the event of a fundamental transaction, as described in the Warrants and generally including any reorganization, recapitalization or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of greater than 50% of our outstanding Common Stock, or any person or group becoming the beneficial owner of greater than 50% of the voting power represented by our outstanding Common Stock, the holders of the Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to such fundamental transaction. In addition, in the event of a fundamental transaction which is approved by our board of directors, the holders of the Warrants have the right to require us or a successor entity to redeem the Warrant for cash in the amount of the Black-Scholes Value (as defined in the Warrant) of the unexercised portion of the Warrant on the date of the consummation of the fundamental transaction. In the event of a fundamental transaction which is not in our control, including a fundamental transaction not approved by our board of directors, the holders of the Warrants have the right to require us or a successor entity to redeem the Warrant for the consideration paid in the fundamental transaction in the amount of the Black-Scholes Value of the unexercised portion of the Warrant on the date of the consummation of the fundamental transaction.

*Amendments*

 

The Warrants may be modified or amended with the written consent of the holder of such Warrant and us.

**Pre-Funded Warrants**

The following summary of certain terms and provisions of the Pre-Funded Warrants that are being issued hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the Pre-Funded Warrant, the form of which will be filed as an exhibit to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of Pre-Funded Warrant for a complete description of the terms and conditions of the Pre-Funded Warrants.

*Duration and Exercise Price*

 

Each Pre-Funded Warrant offered hereby will have an initial exercise price per share equal to $0.0001. The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The exercise price and number of shares of Common Stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our Common Stock and the exercise price. The Pre-Funded Warrants will be issued separately from the accompanying Warrants, in certificated form only.

*Exercisability*

 

The Pre-Funded Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the Pre-Funded Warrant to the extent that the holder would own more than 4.99% (or, at the election of the purchaser prior to the issuance of the Pre-Funded Warrant, 9.99%) of the outstanding Common Stock immediately after exercise. Following the issuance of the Pre-Funded Warrants, upon notice from the holder to us, the holder may increase or decrease the amount of beneficial ownership of outstanding stock after exercising the holder's Pre-Funded Warrants up to 9.99% of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants and in accordance with the rules and regulations of the SEC. Purchasers of Pre-Funded Warrants in this offering may also elect prior to the issuance of the Pre-Funded Warrants to have the initial exercise limitation set at 9.99% of our outstanding Common Stock, provided that any increase in the beneficial ownership limitation shall not be effective until 61 days following notice to us.

*Cashless Exercise*

 

In lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the Pre-Funded Warrants.

*Transferability*

 

Subject to applicable law, Pre-Funded Warrant may be transferred at the option of the holder upon surrender of the Pre-Funded Warrant to us together with the appropriate instruments of transfer.

*Fractional Shares*

 

No fractional shares of Common Stock will be issued upon the exercise of the Pre-Funded Warrants. Rather, the number of shares of Common Stock to be issued will be rounded up to the next whole share or we will pay a cash adjustment to such fraction multiplied by the exercise price to the holder.

*Trading Market*

 

There is no trading market available for the Pre-Funded Warrants on any securities exchange or nationally recognized trading system, and we do not expect a trading market to develop. We do not intend to list the Pre-Funded Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the Pre-Funded Warrants will be extremely limited. The Common Stock issuable upon exercise of the Pre-Funded Warrants is currently listed on Nasdaq.

*Right as a Stockholder*

 

Except as otherwise provided in the Pre-Funded Warrants or by virtue of such holder's ownership of shares of our Common Stock, the holders of the Pre-Funded Warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, until they exercise their Pre-Funded Warrants. The Pre-Funded Warrants will provide that holders have the right to participate in distributions or dividends paid on our Common Stock.

*Fundamental Transaction*

 

In the event of a fundamental transaction, as described in the Pre-Funded Warrants and generally including any reorganization, recapitalization or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of greater than 50% of our outstanding Common Stock, or any person or group becoming the beneficial owner of greater than 50% of the voting power represented by our outstanding Common Stock, the holders of the Pre-Funded Warrants will be entitled to receive upon exercise of the Pre-Funded Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Pre-Funded Warrants immediately prior to such fundamental transaction.

*Amendments*

 

The Pre-Funded Warrants may be modified or amended with the written consent of the holder of such Pre-Funded Warrant and us.

**Placement Agent Warrants**

We have also agreed to issue to the Placement Agent (or its designees) Placement Agent Warrants to purchase up to shares of Common Stock. The Placement Agent Warrants will have substantially the same terms as the Warrants described above, except that the Placement Agent Warrants will have an assumed exercise price of $ per share (representing 125% of the public offering price per share of Common Stock and accompanying Warrant) and a termination date that will be five years from the commencement of the sales in this offering. Pursuant to FINRA Rule 5110(e), the Placement Agent Warrants and any shares of common stock issued upon exercise of the Placement Agent Warrants shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of commencement of sales of this offering, except the transfer of any security: (i) by operation of law or by reason of reorganization of the issuer; (ii) to any FINRA member firm participating in the offering and the officers, partners, registered persons or affiliates thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time period; (iii) if the aggregate amount of our securities held by the placement agent or related persons does not exceed 1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund and the participating members in the aggregate do not own more than 10% of the equity in the fund; (v) the exercise or conversion of any security, if all securities remain subject to the lock-up restriction set forth above for the remainder of the time period; (vi) if we meet the registration requirements of Forms S-3, F-3 or F-10; or (vii) back to us in a transaction exempt from registration with the SEC. See the section of this prospectus entitled "*Plan of Distribution*" below.

**Authorized and Outstanding Capital Stock**

The following description of our capital stock and provisions of our certificate of incorporation and bylaws are summaries of material terms and provisions and are qualified by reference to our amended and restated certificate of incorporation and bylaws, copies of which have been filed with the SEC as exhibits to the registration statement of which this prospectus forms a part.

Prior to the completion of this offering, our authorized capital stock consists of 500,000,000 shares of Common Stock, $0.0001 par value per share. On October 30, 2024, we effected a forward stock split of all issued and outstanding shares of Common Stock at a ratio of 1-to-1,677,000, resulting in 191,458,151 shares of issued and outstanding shares of Common Stock. On December 5, 2024, we effected a reverse stock split of all issued and outstanding shares of Common Stock at a ratio of 1-for-3.75, resulting in 51,055,508 shares of issued and outstanding shares of Common Stock. On February 24, 2025, we closed on our initial public offering of 888,889 shares of Common Stock. We have not authorized the issuance of preferred stock.

As of the date of this prospectus, we have 84,064,100 shares of Common Stock issued and outstanding held by 49 stockholders of record.

Holders of our Common Stock are entitled to one vote for each share of Common Stock held of record for the election of directors and on all matters submitted to a vote of stockholders. Except as described under *"Description of Securities We Are Offering – Anti-Takeover Effects of Delaware Law and Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws"* below, a majority vote of the holders of Common Stock present at a meeting in which a quorum is present is generally required to take action under our certificate of incorporation and bylaws. Holders of our Common Stock are entitled to receive dividends ratably, if any, as may be declared by our board of directors out of legally available funds, subject to any preferential dividend rights of any preferred stock then outstanding. Upon our dissolution, liquidation or winding up, holders of our Common Stock are entitled to share ratably in our net assets legally available after the payment of all our debts and other liabilities, subject to the preferential rights of any preferred stock then outstanding. Holders of our Common Stock have no preemptive, subscription, redemption, or conversion rights, and no sinking fund provisions are applicable to our Common Stock. The rights, preferences, and privileges of holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

**Anti-Takeover Effects of Delaware Law and Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws** 

Certain provisions of the DGCL and of our certificate of incorporation and bylaws effective immediately prior to the completion of this offering could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and, as a consequence, they might also inhibit temporary fluctuations in the market price of our Common Stock that often result from actual or rumored hostile takeover attempts. These provisions are also designed in part to encourage anyone seeking to acquire control of us to first negotiate with our board of directors. These provisions might also have the effect of preventing changes in our board of directors or management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests. However, we believe that the advantages gained by protecting our ability to negotiate with any unsolicited and potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including those priced above the then-current market value of our Common Stock, because, among other reasons, the negotiation of such proposals could improve their terms.

***Delaware Takeover Statute***

We are subject to the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

● before the stockholder became interested, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

● upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or

● at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 defines a business combination to include:

● any merger or consolidation involving the corporation and the interested stockholder;

● any sale, transfer, lease, pledge, exchange, mortgage or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;

● subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

● subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

● the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

***Provisions of Our Certificate of Incorporation and Bylaws***

Our certificate of incorporation and bylaws include a number of provisions that may have the effect of delaying, deferring or discouraging another party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.

*Election of Directors*

The election of directors is determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at each annual stockholder meeting and entitled to vote thereon, except that if any annual stockholder meeting will not be held, such election will take place at any stockholders meeting called and held in accordance with the DGCL.

*Stockholder Meetings*

Our bylaws provide that annual stockholder meetings will be held at a date, time, and place—whether remote or in person—as determined by our board of directors. Any stockholder seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide written or printed notice of the annual meeting of stockholders stating the place, day and hour of the meeting, and in case of a meeting held by remote communication stating such means, will be delivered not less than ten nor more than 60 calendar days before the date of the meeting, either personally or by mail, to each stockholder of record entitled to vote at such meeting. Only the board of directors may call a special meeting of the stockholders upon delivery of the written notice described above, with such notice also setting forth the purpose(s) for which the meeting has been called. Our bylaws provide that our board of directors may adopt by resolution such rules and regulations for the conduct of stockholders meetings as the board of directors deems appropriate. Except to the extent inconsistent with such rules and regulations as adopted by our board of directors, the chairman of any meeting of the stockholders has the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. These rules, regulations, or procedures, may include, without limitation: (a) the establishment of an agenda or order of business for the meeting; (b) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (c) rules and procedures for maintaining order at the meeting and the safety of those present; (d) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (e) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (f) limitations on the time allotted to questions or comments by participants.

*Amendment to certificate of incorporation and bylaws.*

As required by the DGCL, any amendment of our certificate of incorporation must first be approved by a majority of our board of directors, and if required by law, must thereafter be approved by a majority of the outstanding shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions relating to stockholder action, directors, limitation of liability and the amendment of our amended and restated certificate of incorporation must be approved by not less than two-thirds of the outstanding shares entitled to vote on the amendment, and not less than two-thirds of the outstanding shares of each class entitled to vote thereon as a class. Our bylaws may be amended by the affirmative vote of a majority vote of the directors then in office or a majority of our stockholders.

**Transfer Agent and Registrar** 

Our transfer agent and registrar for our Common Stock is Colonial Stock Transfer Company, Inc., 7840 S 700 E, Sandy, UT 84070.

**Listing** 

Our Common Stock is listed on Nasdaq under the trading symbol "WGRX".

**UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION**

The following unaudited pro forma combined statements of operations for the six months ended June 30, 2025 and the twelve months ended December 31, 2024, combine the historical results and operations of Wellgistics Health, Wood Sage and Wellgistics, LLC giving effect to the transactions as if they occurred on January 1, 2024, and separately include the results of operations of Wood Sage, which was acquired by Wellgistics Health on June 16, 2024, and Wellgistics, LLC, which was acquired by the Company on August 30, 2024. The unaudited pro forma combined statements of operations for the year ended December 31, 2023, combine the historical results and operations of Wellgistics Health, Wood Sage and Wellgistics, LLC giving effect to the transactions as if they occurred on January 1, 2023, and separately include the results of operations of Wellgistics Tech & Hub and Wellgistics Pharmacy, which were acquired by Wood Sage in 2023.

The unaudited pro forma combined balance sheet of Wellgistics Health as of June 30, 2025, which gives effect to the Wellgistics Acquisition and the Wood Sage Acquisition, is included within the historical financial statements incorporated by reference into the registration statement of which this prospectus forms a part.

The unaudited pro forma combined financial information should be read in conjunction with the audited and unaudited historical financial statements of each of the Wellgistics Health, Wood Sage and Wellgistics, LLC and the notes thereto. Additional information about the basis of presentation of this information is provided below.

The unaudited pro forma combined financial information was prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma adjustments reflecting the transaction have been prepared in accordance with business combination accounting guidance as provided in *Accounting Standards Codification Topic 805, Business Combinations* and reflect the preliminary allocation of the purchase price to the acquired assets and liabilities based upon the preliminary estimate of fair values, using the assumptions set forth in the notes to the unaudited pro forma combined financial information.

The unaudited pro forma combined financial information is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the transaction had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company. In connection with the pro forma financial information, Wellgistics Health allocated the purchase price using its best estimates of fair value. Accordingly, the pro forma acquisition price adjustments are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. The unaudited pro forma combined financial information also does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transaction or any integration costs. Furthermore, the unaudited pro forma combined statements of operations do not include certain nonrecurring charges and the related tax effects which result directly from the transaction as described in the notes to the unaudited pro forma combined financial information.

**Unaudited Proforma Combined Statement of Operations for the Six Months Ended June 30, 2025**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Wellgistics Health** | **Wood Sage, LLC** | **Wellgistics, LLC** | **Pro Forma Adjustments** | **Pro Forma Combined** |
| Net revenues | $- | $192432 | $18461876 | $- | $18654308 |
| Cost of net revenues |  | 210929 | 17244986 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | 17455915 |
| Gross profit (loss) |  | (18497) | 1216890 |  | 1198393 |
| Operating expenses: |  |  |  |  |  |
| General and administrative | 32019379 | 727666 | 3285824 |  | 36032869 |
| Sales and marketing | 408600 |  |  |  | 408600 |
| Depreciation and amortization | 1526130 |  | 79538 |  | 1605668 |
| Total operating expenses | 33954109 | 727666 | 3365362 |  | 38047137 |
| Loss from operations | (33954109) | (746163) | (2148472) |  | (36848744) |
| Other income (expense): |  |  |  |  |  |
| Other income | 2966 | 2957 | 17984 |  | 23907 |
| Interest expense, net | (1663988) |  | (614542) |  | (2278530) |
| Total other income (expense) | (1661022) | 2957 | (596558) |  | (2254623) |
| Loss before income taxes | (35615131) | (743206) | (2745030) |  | (39103367) |
| Provision for income taxes |  |  |  |  |  |
| Net loss | $(35615131) | $(743206) | $(2745030) | $- | $(39103367) |
| Weighted average common shares outstanding - basic and diluted | 56863720 |  |  |  | 56863720 |
| Net loss per common share - basic and diluted | $0.63 |  |  |  | $0.69 |

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**Unaudited Proforma Combined Statement of Operations for the Year Ended December 31, 2024**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Wellgistics**<br> **Health** | **Wood Sage, LLC** | **Wellgistics, LLC** | **Pro Forma Adjustments** | **Pro Forma Combined** |
| Net revenues | $18128831 | $323525 | $28135112 | $- | $46587468 |
| Cost of net revenues | 16361517 | 279824 | 25732545 |  | 42373886 |
| Gross profit | 1767314 | 43701 | 2402567 |  | 4213582 |
| Operating expenses: |  |  |  |  |  |
| General and administrative | 6797782 | 524228 | 3563666 | (465000)(a) | 10420676 |
| Depreciation and amortization | 1114664 |  | 95107 | 2005210 (b) | 3214981 |
| Total operating expenses | 7912446 | 524228 | 3658773 | 1540210 | 13635657 |
| Loss from operations | (6145132) | (480527) | (1256206) | (1540210) | (9422075) |
| Other income (expense): |  |  |  |  |  |
| Other income | 120373 |  | 623462 |  | 743835 |
| Interest expense, net | (831467) |  | (232508) | (850000)(c) | (1913975) |
| Total other income (expense) | (711094) |  | 390954 | (850000) | (1170140) |
| Loss before income taxes | (6856226) | (480527) | (865252) | (2390210) | (10592215) |
| Provision for income taxes |  |  |  |  |  |
| Net loss | $(6856226) | $(480527) | $(865252) | $(2390210) | $(10592215) |
| Weighted average common shares outstanding - basic and diluted | 47252081 |  |  |  | 47252081 |
| Net loss per common share - basic and diluted | $18128831 | $323525 | $28135112 | $- | $46587468 |

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(a) To reverse historical management services fees paid to Nomad Capital LLC.

(b) To record amortization on the intangible assets recorded as a result of the acquisitions.

(c) To record interest expense related to the promissory notes issued in connection with the Wellgistics Acquisition.

**Description of Transactions**

***Wood Sage Membership Interest Purchase Agreement***

In January 2023, Wellgistics Health entered into the Wood Sage MIPA with Nikul Panchal, an individual resident of the State of Florida in connection with the Wood Sage Acquisition. Wellgistics Health and Mr. Panchal amended and restated this agreement in June 2024, whereby the parties revised the closing payment to be made by Wellgistics Health to Mr. Panchal to be 0.389 shares of Wellgistics Health Common Stock. The shares issued by Wellgistics Health to Mr. Panchal were meant to approximate total cash compensation of $400,000 with a 20% discount. Mr. Panchal currently is Wellgistics Health's President of Healthcare Operations in addition to being a Wellgistics Health stockholder.

***Wellgistics, LLC Membership Interest Purchase Agreement***

During May 2023, Wellgistics Health entered into the Wellgistics MIPA regarding the Wellgistics Acquisition whereby Wellgistics Health agreed to acquire all of the outstanding membership interests of Wellgistics, LLC.

On August 4, 2023, Wellgistics Health and Wellgistics, LLC amended the Wellgistics MIPA to extend the termination date of the Wellgistics MIPA to no later than December 26, 2023, and designate Brian Norton as a representative who may act on behalf of all named sellers in the Wellgistics MIPA. On December 26, 2023, Wellgistics Health and Wellgistics, LLC further amended the Wellgistics MIPA to extend the termination date to March 29, 2024. On March 22, 2024, Wellgistics Health and Wellgistics, LLC further amended the Wellgistics MIPA to extend the termination date to August 31, 2024, and to provide for Wellgistics Health to extend such date for a maximum of ninety days, among other things.

On August 23, 2024, we closed on our acquisition of Wellgistics, LLC, thereby making Wellgistics, LLC a wholly owned subsidiary of Wellgistics Health. Closing occurred pursuant to the Wellgistics MIPA, which was first entered into on May 11, 2023, and subsequently amended, most recently on July 24, 2025. As amended, the purchase consideration that we agreed to pay the sellers of Wellgistics, LLC under the revised Wellgistics MIPA consists of:

● a closing cash payment of $10 million, $1 million of which was paid in immediately available funds to Zions Bank, a creditor of Wellgistics, LLC, by wire transfer, and the remainder of which was converted to common stock of the Company in July 2025 (including 333,333 shares of the Company's Common Stock issued to Strategix Global, LLC, an entity controlled by the Company's Chief Executive Officer, at the initial public offering price of $4.50 that are subject to a 12-month lock-up agreement whereby Strategix Global, LLC has agreed not to transfer or dispose of such shares except in certain limited instances);

● a promissory note in the aggregate principal amount of $15 million plus simple interest accruing annually equal to the "Prime Rate" as published by the *Wall Street Journal* on January 1 of the applicable year, together payable in two annual installments of $5 million each and a third annual installment of $7.5 million commencing on July 24, 2026;

● bonus payments in the form of our Common Stock in an aggregate amount of 2,666,224 shares, after accounting for the reverse stock split that we effected on December 5, 2024, that are subject to restrictions on transfer. Such restrictions shall be removed over three years commencing December 31, 2024;

● shares of restricted Common Stock in an aggregate amount of up to 1,333,111 shares, after accounting for the reverse stock split that we effected on December 5, 2024, that are subject to repurchase if such financial metrics are not met for calendar years 2024, 2025, and 2026 (the "**Financial Contingent Bonus Payments** "); and

● contingent bonus payments consisting of 50% cash and 50% our Common Stock to the extent that Wellgistics Health's EBITDA is in excess of 110% of certain established targets for each of the years ended December 31, 2024, December 31, 2025, and December 31, 2026.

The Financial Contingent Bonus Payments will no longer be subject to repurchase by Wellgistics Health, according to the following terms:

● For the calendar year ending December 31, 2024: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $47.2 million, and (ii) 222,185 shares of our Common Stock will no longer be subject to repurchase if the net operating income of Wellgistics, LLC prior to the provision for (a) interest expense and interest income, (b) federal, state, local and foreign taxes based on the income or profits, and (c) depreciation and amortization ("EBITDA") is greater than or equal to $4.2 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2024 is capped at 444,370 shares.

● For the calendar year ending December 31, 2025: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $57.7 million, and (ii) 222,185 shares of our Common Stock will no longer be subject to repurchase if the EBITDA of Wellgistics, LLC is greater than or equal to $6.5 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2025 is capped at 444,370 shares.

● For the calendar year ending December 31, 2026: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $63.5 million, and (ii) 222,186 shares of our Common Stock will no longer be subject to repurchase if the EBITDA of Wellgistics, LLC is greater than or equal to $7.5 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2026 is capped at 444,371 shares.

**Basis of Presentation**

The historical financial information has been adjusted to give pro forma effect to events that are (i) directly attributable to the transaction, (ii) factually supportable, and (iii) with respect to the unaudited proforma combined balance sheets and unaudited pro forma combined statements of operations, expected to have a continuing impact on the combined results.

The transactions were accounted for as a business acquisition wherein Wood Sage and Wellgistics, LLC are the accounting acquirees and Wellgistics Health is the accounting acquirer.

**Consideration Transferred**

***Wood Sage (closed in June 2024)***

The Company has made a preliminary allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation:

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| | |
|:---|:---|
|  | **Total** |
| Cash and cash equivalents | $30255 |
| Accounts receivables | 82831 |
| Inventories | 49533 |
| Goodwill | 1550081 |
| Customer relationship - Intangibles | 393853 |
| Intangible assets under development | 1240729 |
| Due to related parties | (616703) |
| Accounts payable | (815081) |
| Note payable | (1300000) |
| Other current liabilities | (215498) |
| Purchase price consideration | $400000 |

---

On June 16, 2024, in connection with the acquisition of Wood Sage, the Company issued 173,961 shares of Common Stock (after giving effect to the stock split effected by the Company on October 30, 2024 and the reverse stock split on December 05, 2024). These shares were issued to approximate total cash compensation of $400,000.

***Wellgistics, LLC (closed in August 2024)***

The total fair value of the initial purchase price consideration associated with the Wellgistics Acquisition was determined as follows:

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| | |
|:---|:---|
| Cash payment | $10000000<sup>(1)</sup> |
| Note payable | 15000000<sup>(2)</sup> |
| Restricted common stock | 15000000<sup>(3)</sup> |
|  | $40000000 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents the cash consideration pursuant to the Wellgistics Acquisition,
 which is reflected as due to seller on the pro forma balance sheet. As per the Wellgistics MIPA, the closing cash payment of $10
 million includes $1 million of which is payable in immediately available funds, and the remainder of which was due no later
 than 120 calendar days following effectiveness of the registration statement relating to our initial public offering. The
 Company's planned initial recognition of this component is to record as a current liability at its fair value.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Represents the note payable to be issued to Strategix, Nomad,
 Jouska, and Brian Norton. As per the Wellgistics MIPA, the principal of the note is $15,000,000, payable in three equal annual installments
 commencing on February 14, 2026. The Company's planned initial recognition of this component is to record the issuance
 of the note payable at fair value, which is estimated to be $15,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Represents the issuance of 3,999,335 shares of restricted Common
 Stock pursuant to the Wellgistics MIPA. 2,666,223 shares vest in equal annual installments, and 1,333,112 shares vest only upon
 the achievement of certain financial metrics. The 2,666,223 shares are not considered earn-out or contingent upon any event, and
 will vest annually. These shares only have restrictions with regards to transferability until the vesting occurs. The Company believes
 it is probable the remaining 1,333,112 shares will vest and not be subject to any repurchase. The Company's planned initial
 recognition of this component is to account for the issuance of 3,999,335 shares of restricted Common Stock at a fair value
 of $15,000,000 as equity consideration included within the total purchase price consideration, including the recognition of $400
 as Common Stock for the par value of the shares issued and $14,999,600 recognized as additional paid-in capital as per the
 pro forma balance sheet. The Company recognized the issuance of the 3,999,335 shares in its statement of changes in stockholders'
 equity, recognized within the issued and outstanding shares.

The Company has made a preliminary allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation:

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| | |
|:---|:---|
|  | **Total** |
| Cash and cash equivalents | $901113 |
| Accounts receivable, net | 2695280 |
| Inventories | 9396719 |
| Goodwill | 14669848 |
| Customer relationship - Intangibles | 11256067 |
| Trademark - Intangibles | 10143137 |
| Other assets | 833730 |
| Note receivable | 139771 |
| Prepaid expenses and other assets | 11959 |
| Property, plant and equipment, net | 455796 |
| Investments in unconsolidated entity | 17671 |
| Operating lease, right of use asset | 1258141 |
| Accounts payable | (4649741) |
| Accrued expenses and other liabilities | (758009) |
| Current portion of debt obligations | (5047698) |
| Operating lease liability | (1323784) |
| Purchase price consideration | $40000000 |

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The Company expects to identify intangible assets such as developed technology and customer relationships upon the business combination.

**MANAGEMENT**

The following is a list of our directors and executive officers as of August 27, 2025.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Age** | **Position** | **Director Since** |
| Brian Norton | 46 | Chief Executive Officer |  |
| Mark DiSiena | 59 | Chief Financial Officer |  |
| Dr. Shafaat Pirani | 36 | Chief Clinical Officer |  |
| Tony Madsen | 35 | Chief Operating Officer |  |
| Srini Kalla | 50 | Chief Information Officer |  |
| Jason Lang | 43 | President of Distribution |  |
| Suren Ajjarapu | 54 | Chairman of the Board | 2022 |
| Michael L. Peterson\* | 63 | Director | 2025 |
| Donald W. Anderson\* | 67 | Director | 2023 |
| Rebecca Shanahan\* | 71 | Director | 2024 |

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\*Independent Director

**Executive Officers**

***Mark DiSiena***, has offered operational leadership and accounting oversight to clients through Cresset Advisors, a specialty consulting practice he founded to focus on the delivery of tailored interim CFO and advisory services. DiSiena has served in related leadership roles, including Chief Financial Officer for AgEagle Aerial Systems, Titanium Healthcare, Decentral Life, Cherokee Brands, and 4Medica. He has held management positions at Oracle-NetSuite, LVMH and Nokia/Bell Labs. In addition, he has consulted at notable companies that include: Kyruus Health, PreciseMDX, PublicSq, World View Enterprises, Countrywide Bank, American Apparel, Paramount Pictures and HauteLook. He began his career as an assurance auditor at PriceWaterhouseCoopers. Mr. DiSiena earned a Bachelor of Science degree with honors from New York University, an MBA from Stanford University and a law degree from Vanderbilt University.

***Tony Madsen***, has worked as a Managing Director and Managing Partner at Nomad Capital, a firm investing in healthcare, tech, and regulated industries, providing deep operational expertise in pharmaceutical distribution and technology-driven businesses. He also led cybersecurity operations as a Director at Cingo Solutions, a SOC2-certified provider of managed detection and response services. As COO of WGRX, he focuses on optimizing the first mile of drug distribution—spanning wholesale operations, supply chain logistics, and network efficiency. Tony holds an associates degree from Brigham Young University-Idaho.

***Srini Kalla***, is a former senior executive of OptumRx (UnitedHealth Group) and Elevance Health, and brings meaningful expertise in pharmacy and PBM healthcare technology, with a track record of leading major tech initiatives and M&A integrations across the healthcare landscape. During his time with Elevance Health between February 2024 and October 2024, Srini led the company's technology strategy and M&A initiatives for the Pharmacy Benefit Management (PBM) and Pharmacy business units while working cross-functionally with enterprise strategy, product, finance, and technology teams to evaluate and execute on strategic investment and partnership opportunities. He also drove due diligence for pharmacy-related acquisitions, assessed technology alignment, integration feasibility, and value creation opportunities, and provided executive-level guidance on build-vs-buy decisions and long-term technology architecture strategy to support scalable pharmacy services. During his time at OptumRx between 2010 and 2024, Srini held various leadership roles across PBM and clinical technology domains, culminating in the role of Vice President. In this regard, he directed end-to-end technology strategy, product engineering, and platform modernization initiatives impacting pharmacy operations, claims processing, prior authorization, adherence programs, and clinical interventions. Srini holds a bachelor of technology (engineering) from the College of Technology, OU, in India and a masters in management information systems from the University of South Florida in Tampa, Florida.

***Jason Lang***, is a healthcare entrepreneur and operator with over 20 years of experience in the pharmaceutical industry. He has founded and successfully exited multiple ventures, including five independent retail pharmacies, a 503B sterile compounding facility, and a pharmaceutical wholesaler. With deep expertise in pharmacy operations, direct-buy strategy, and M&A execution, Jason specializes in unlocking growth across complex, regulated markets. As President of Wellgistics, he leads strategic expansion initiatives and operational scaling efforts across the pharmaceutical supply chain. He earned a Doctor of Pharmacy with honors from Midwestern University and Bachelors from the University of Utah and is widely regarded for his ability to align operational execution with long-term growth strategy in highly regulated markets.

**Non-Employee Directors**

***Michael L. Peterson***, has served as President, Chief Executive Officer and as a member of the Board of Directors of the Lafayette Energy Corp., an oil and gas exploration and production company headquartered in Woods Cross, Utah, since May 2022. Between October 2023 and July 2024, Mr. Peterson served as President and CEO, and from July 2022 through July 2024, as a member of the Board of Directors, of Trio Petroleum Corp. (NYSE American: TPET), an oil and gas company with assets in the State of California. Since September 2021 Mr. Peterson has served as a member of the Board of Directors and as of October 2024, as audit committee chair of Ocean Biomedical, Inc., formerly Aesther Healthcare Acquisition Corp. (Nasdaq: OCEA), a former special purpose acquisition company which recently acquired a biopharmaceutical company. From September 2021 to February 2023, Mr. Peterson served as the Chair of the Audit Committee and a member of the Compensation Committee and Nominating and Corporate Governance Committee of Ocean Biomedical, Inc. Since February 2021, Mr. Peterson also has served on the board of directors and as the Chairman of the Audit Committee of Indonesia Energy Corporation Limited (NYSE American: INDO). Mr. Peterson previously served as the president of Nevo Motors, Inc. from December 2020 to June 2023, which was established to commercialize a range extender generator technology for the heavy-duty electric vehicle market but is currently non-operational. Mr. Peterson also previously served as the president of the Taipei Taiwan Mission of The Church of Jesus Christ of Latter-day Saints, in Taipei, Taiwan from June 2018 to June 2021. Furthermore, Mr. Peterson served as an independent member of the Board of Directors of Scienture Holdings, Inc. (formerly TRxADE HEALTH, Inc.) from August 2016 to May 2021 (Nasdaq: SCNX), and as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of Scienture Holdings, Inc. from January 2023 to May 2024. From May 2016 to May 2018, Mr. Peterson served as the Chief Executive Officer of PEDEVCO Corp. (NYSE American: PED), a public company engaged primarily in the acquisition, exploration, development and production of oil and natural gas shale plays in the US from May 2016 to May 2018. Mr. Peterson served as Chief Financial Officer of PEDEVCO between July 2012 and May 2016, as Executive Vice President of Pacific Energy Development (PEDEVCO's predecessor) from July 2012 to October 2014, and as PEDEVCO's President from October 2014 to May 2018. Mr. Peterson joined Pacific Energy Development as its Executive Vice President in September 2011, assumed the additional office of Chief Financial Officer in June 2012, and served as a member of its board of directors from July 2012 to September 2013. Mr. Peterson formerly served as Interim President and CEO (from June 2009 to December 2011) and as director (from May 2008 to December 2011) of Pacific Energy Development, as a director (from May 2006 to July 2012) of Aemetis, Inc. (formerly AE Biofuels Inc.), a Cupertino, California-based global advanced biofuels and renewable commodity chemicals company (NASDAQ: AMTX), and as Chairman and Chief Executive Officer of Nevo Energy, Inc. (NEVE) (formerly Solargen Energy, Inc.), a Cupertino, California-based developer of utility-scale solar farms that he helped form in December 2008 (from December 2008 to July 2012). From 2005 to 2006, Mr. Peterson served as a managing partner of American Institutional Partners, a venture investment fund based in Salt Lake City. From 2000 to 2004, he served as a First Vice President at Merrill Lynch, where he helped establish a new private client services division to work exclusively with high-net-worth investors. From September 1989 to January 2000, Mr. Peterson was employed by Goldman Sachs & Co. in a variety of positions and roles, including as a Vice President. Mr. Peterson received his MBA at the Marriott School of Management and a BS in statistics/computer science from Brigham Young University.

The backgrounds of our other directors and executive officers can be found in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 25, 2025, which is incorporated by reference into this prospectus.

**Family Relationships**

There are no family relationships among any of our directors or executive officers.

**Board Composition and Director Independence**

The Company's board of directors is comprised of five (5) directors and the Company has determined that Rebecca Shanahan, Michael L. Peterson, and Donald W. Anderson qualify as independent directors, as defined under the listing rules of Nasdaq.

**Board Committees**

***Audit Committee***

The Company's audit committee consists of Donald W. Anderson, Rebecca Shanahan, and Michael L. Peterson, with Mr. Peterson serving as the chair of the committee. The Company's board of directors determined that Mr. Peterson qualifies as an audit committee financial expert within the meaning of the rules and regulations of the SEC and meets the financial sophistication requirements of Nasdaq listing rules. In making this determination, the Company's board of directors considered Mr. Peterson's formal education and previous experience in financial roles.

The Company's board of directors also has determined that each of the members of the audit committee will satisfy the independence requirements of Nasdaq and Rule 10A-3 under the Exchange Act. Each member of the audit committee can read and understand fundamental financial statements in accordance with Nasdaq audit committee requirements. In arriving at this determination, the Company's board of directors examined each audit committee member's scope of experience and the nature of such committee member's prior and/or current employment.

Both the Company's independent registered public accounting firm and management periodically will meet privately with the Company's audit committee. The functions of the audit committee will include, among other things:

● evaluating the performance, independence and qualifications of the Company's independent auditors and determining whether to retain the Company's existing independent auditors or engage new independent auditors;

● monitoring the integrity of the Company's financial statements and the Company's compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;

● reviewing the integrity, adequacy and effectiveness of the Company's internal control policies and procedures;

● preparing the audit committee report required by the SEC to be included in the Company's annual proxy statement;

● discussing the scope and results of the audit with the Company's independent auditors, and reviewing with management and the Company's independent auditors the Company's interim and year-end operating results;

● establishing and overseeing procedures for employees to submit concerns anonymously about questionable accounting or auditing matters;

● reviewing the Company's guidelines and policies on risk assessment and risk management;

● reviewing and approving related party transactions;

● obtaining and reviewing a report by the Company's independent auditors at least annually, that describes the Company's independent auditors internal quality control procedures, any material issues raised by review under such procedures, and any steps taken to deal with such issues when required by applicable law; and

● approving (or, as permitted, pre-approving) all audit and non-audit services to be performed by the Company's independent auditors.

The composition and function of the audit committee will comply with all applicable requirements of the Sarbanes-Oxley Act, SEC rules and regulations, and Nasdaq listing rules. The Company will comply with future requirements to the extent they become applicable to the Company.

***Compensation Committee***

The Company's compensation committee consists of Donald W. Anderson, Rebecca Shanahan, and Michael L. Peterson, with Donald W. Anderson serving as the chair of the committee. The Company's board of directors has determined that each of the members of the compensation committee will be a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act and will satisfy the independence requirements of Nasdaq. The functions of the compensation committee will include, among other things:

● approving the retention of compensation consultants and outside service providers and advisors;

● reviewing and approving, or recommending that the Company's board of directors approve, the compensation of the Company's executive officers, including annual base salary, annual incentive bonuses, specific performance goals relevant to their compensation, equity compensation, employment;

● reviewing and recommending to the Company's board of directors the compensation of the Company's directors;

● administering and determining any award grants under the Company's equity and non-equity incentive plans;

● reviewing and evaluating succession plans for the Company's executive officers;

● preparing the compensation committee report required by the SEC to be included in the Company's annual proxy statement; and

● periodically reviewing the Company's practices and policies of employee compensation as they relate to risk management and risk-taking incentives.

The composition and function of its compensation committee will comply with all applicable requirements of the Sarbanes-Oxley Act, SEC rules and regulations, and Nasdaq listing rules. The Company will comply with future requirements to the extent they become applicable to the Company.

***Nominating and Corporate Governance Committee***

The Company's nominating and corporate governance committee consists of Donald W. Anderson, Rebecca Shanahan, and Michael L. Peterson, with Rebecca Shanahan serving as the chair of the committee. The Company's board of directors has determined that each of the members of the Company's nominating and corporate governance committee will satisfy the independence requirements of Nasdaq. The functions of the nominating and corporate governance committee include, among other things:

● identifying, evaluating, and recommending individuals qualified to become members of the Company's board of directors and its committees;

● evaluating the performance of the Company's board of directors and of individual directors;

● reviewing the Company's environmental and social responsibility policies and practices;

● developing and recommending corporate governance guidelines to the Company's board of directors; and

● overseeing an annual evaluation of the Company's board of directors and management.

The composition and function of the nominating and corporate governance committee will comply with all applicable requirements of the Sarbanes-Oxley Act, SEC rules and regulations, and Nasdaq listing rules. The Company will comply with future requirements to the extent they become applicable to the Company.

**Compensation Committee Interlocks and Insider Participation**

None of the members of the Company's compensation committee has at any time during the prior three years been an officer or employee of the Company. Furthermore, none of the Company's executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on the Company's board of directors or compensation committee.

**DIRECTOR COMPENSATION**

**Summary Independent Director Compensation Table**

The following table provides information regarding all compensation awarded to, earned by or paid to each person who served as a non-executive director of the Company for some portion or all of 2024. Other than as set forth in the table and described more fully below, the Company did not pay any fees, make any equity or non-equity awards, or pay any other compensation, to its non-employee directors. All compensation paid to its employee directors is set forth in the tables summarizing executive officer compensation above.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Fees<br> Earned or**<br> **paid in cash** | **Stock**<br> **Awards\*** | **Total** |
| Donald W. Anderson<sup>(1)</sup> | $50000<sup>(1)</sup> | $– $– $– $|  |
| Rebecca Shanahan<sup>(2)</sup> | $25000<sup>(2)</sup> | $– $– $– $|  |
| Sajid Syed<sup>(3)</sup> | $50000<sup>(3)</sup> | $– $– $– $|  |
| Michael L. Peterson<sup>(4)</sup> | $- | $– $– $– $|  |

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\* Amounts in this column represent the aggregate grant date fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of restricted shares and option awards are set forth in the Critical Accounting Estimates as disclosed in our Consolidated Financial Statements for the year ended December 31, 2024. The amount reported in this column reflects the accounting cost for these awards and does not correspond to the actual economic value that may be received by the director upon the vesting of the restricted shares, the exercise of the stock options, or any sale of the underlying shares of Common Stock.

\*\* Amounts in this column represent the aggregate grant date fair value of awards computed in accordance with the Black-Scholes option pricing model. The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include the per share fair value of the underlying Common Stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield and the expected stock price volatility over the expected term. The Company estimates volatility by reference to the historical volatilities of the Company. The risk-free interest rate is based on the yield available on United States Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award.

(1) Mr. Anderson joined the board of directors on November 4, 2023. Mr. Anderson earned cash compensation for serving on the board of directors in an aggregate amount of $50,000 during the year-ended December 31, 2024, pursuant to an agreement entered into by and between the Company and Mr. Anderson, all of which has been paid.

(2) Ms. Shanahan was appointed to the board of directors on August 13, 2024. Ms. Shanahan earned cash compensation for serving on the board of directors in an aggregate amount of $25,000 during the year-ended December 31, 2024, pursuant to an agreement entered into by and between the Company and Ms. Shanahan, all of which has been paid.

(3) Mr. Syed was appointed to the board of directors on February 10, 2024. Mr. Syed earned cash compensation for serving on the board of directors in an aggregate amount of $50,000 during the year-ended December 31, 2024, pursuant to an agreement entered into by and between the Company and Mr. Syed, $12,500 of which is accrued and unpaid. As previously disclosed, Mr. Syed resigned from the board of directors on April 9, 2025.

(4) Mr. Peterson was appointed to the board of directors on April 10, 2025, and, therefore, did not earn compensation for serving on the board of directors during the year ended December 31, 2024.

**Independent Director Compensation Policy**

We previously entered into individual agreements with each of its independent directors where we agreed to pay Mr. Anderson and Ms. Shanahan an annual cash retainer of $50,000 and Mr. Peterson an annual cash retainer of $120,000 per year. In addition, we agreed to carry director and officer insurance for Mr. Peterson and to make a one-time issuance of 200,000 shares of our Common Stock at a price per share equal to the fair market value of the Common Stock on the grant date. These 200,000 shares vest in equal amounts of a three year period beginning on the first anniversary date of the grant. Vesting accelerates if or when Mr. Peterson leaves the Company.

On July 31, 2025, we adopted a non-employee director compensation policy designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee directors. Pursuant to the policy, each non-employee director will receive an annual cash retainer of $120,000, payable at the director's election in cash or shares of Common Stock. These retainers are paid quarterly in arrears on or before the fifteenth (15th) business day following the end of each calendar quarter. Each non-employee director also receives an annual equity award of 60,000 shares of Common Stock under the Company's Amended and Restated 2023 Equity Incentive Plan. These shares of Common Stock are to be issued quarterly in arrears on or before the fifteenth (15th) business day following the end of each calendar quarter. Non-employee directors are also reimbursed for reasonable travel expenses in connection with their attendance at board of director and committee meetings. Upon appointment, each non-employee directors will receive 200,000 restricted shares of Common Stock, vesting in equal installments over three (3) years,.

**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus, and as adjusted to reflect the sale of our Common Stock offered by this prospectus, and assuming no purchase of public shares in this offering, by:

● each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock;

● each of our executive officers, directors and director nominees that beneficially owns Common Stock; and

● all our executive officers, directors and director nominees as a group.

We have determined beneficial ownership in accordance with SEC rules. The information does not necessarily indicate beneficial ownership for any other purpose. A person is also deemed to be a beneficial owner of our Common Stock if that person has or shares voting power, which includes the power to vote or direct the voting of our Common Stock, or investment power, which includes the power to dispose of or to direct the disposition of such capital stock. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of Common Stock shown as beneficially owned by the stockholder.

The number of shares beneficially owned by each stockholder as described in this prospectus is determined under rules issued by the SEC and includes voting or investment power with respect to securities. The beneficial ownership of each class or series of our voting capital stock below is based on, as of the date of this prospectus, 84,064,100 shares of Common Stock issued and outstanding. Each share of Common Stock entitles its holder to one vote per share held.

Unless otherwise indicated, the address of each of the individuals and entities named below is c/o Wellgistics Health, Inc., 3000 Bayport Drive Suite 950, Tampa, FL 33607, (844) 203-6092. Each of the stockholders listed has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.

The information in the table below with respect to each stockholder has been obtained from that stockholder. Note that none of Wellgistics Health's stockholders are also stockholders of Wellgistics, LLC.

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| | | |
|:---|:---|:---|
| | **Shares Beneficially Owned** | **Shares Beneficially Owned** |
| <br>**Name of Beneficial Owner<sup>(1)</sup>** | **Number** | **Percentage** |
| ***Directors and Named Executive Officers:*** |  |  |
| Brian Norton<sup>(2)</sup> | 18204807 | 21.66% |
| Prashant Patel<sup>(3)</sup> | 10990247 | 13.07% |
| Suren Ajjarapu<sup>(4)</sup> | 10445447 | 12.43% |
| Donald Anderson | 244720 | —% |
| Rebecca Shanahan | 244720 | — % |
| Shafaat Pirani | 102080 | — % |
| Tim Canning<sup>(5)</sup> | 750000 | —% |
| Michael L. Peterson | 200000 | —% |
| ***All Directors and Executive Officers as a group*** | **39093018** | **46.50%** |
|  ***Other Five Percent Holders:*** |  |  |
| Annapurna Gundlapalli, Trustee of the Annapurna Gundlapalli Revocable Trust 2010 | 8944000 | 10.64% |
| Patel Trust 2010 | 4472000 | 5.32% |
| Sandhya Ajjarapu, Trustee of the Sandhya Ajjarapu Revocable Trust 2007 | 4463200 | 5.31% |

---

(1) The mailing address of all individuals listed is c/o Wellgistics Health, Inc., 3000 Bayport Drive Suite 950, Tampa, FL 33607.

(2) Includes (i) 9,044,720 shares owned directly by Mr. Norton, (ii) 6,602,926 shares owned by Strategix Global LLC, an entity in which Mr. Norton has a beneficial interest, and (iii) 2,557,161 shares owned by Nomad Capital LLC, an entity in which Mr. Norton has a beneficial interest.

(3) Includes (i) 4,118,247 shares owned directly by Mr. Patel, (ii) 4,472,000 shares owned by the Patel Trust 2010, for which Mr. Patel claims beneficial ownership, as co-trustee with his wife, Rina Patel, and (iii) 2,400,000 shares owned by Goldshield Health LLC, an entity that Mr. Patel beneficially owns and for which Mr. Patel thereby claims beneficial ownership. Mr. Patel voluntarily resigned as an officer and director of the Company effective August 8, 2025. Mr. Patel's decision to resign is not the result of any dispute or disagreement with the Company, the Company's management or the Company's board of directors on any matter relating to the Company's operations, policies, or practices.

(4) Includes (i) 2,882,247 shares owned directly by Mr. Ajjarapu, (ii) 4,463,200 shares owned by the Sandhya Ajjarapu Revocable Trust 2007, for which Mr. Ajjarapu claims beneficial ownership through his wife, Sandhya Ajjarapu, who serves as trustee, and (iii) 3,100,000 shares owned by Sansur Associates LLC, an entity that Mr. Ajjarapu beneficially owns and for which Mr. Ajjarapu thereby claims beneficial ownership.

(5) As previously described, Mr. Canning resigned as Chief Executive Officer of the Company effective February 28, 2025.

**CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS**

*In addition to the compensation arrangements with our directors and executive officers incorporated by reference into the registration statement of which this prospectus forms a part, the following is a description of each transaction since January 1, 2024, and each currently proposed transaction in which (i) we have been or will be a participant; (ii) the amount involved exceeds or will exceed the lesser of $120,000 or one percent (1%) of the average of the our total assets at year-end for the last two completed fiscal years; and (iii) any of our directors, executive officers or beneficial holders of more than five percent (5%) of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.*

**Related Party Transactions**

***Wood Sage Membership Interest Purchase Agreement***

During January of 2023, Wellgistics Health entered into a Membership Interest Purchase Agreement with Nikul Panchal, an individual resident of the State of Florida, in connection with the Wood Sage Acquisition. Wellgistics Health and Mr. Panchal amended and restated this agreement on June 16, 2024, whereby the parties revised the closing payment to be made by Wellgistics Health to Mr. Panchal to be 0.389 shares of Common Stock. The shares issued by Wellgistics Health to Mr. Panchal were meant to approximate total cash compensation of $400,000 with a 20% discount. Mr. Panchal currently is Wellgistics Health's Vice President of Business Development and Sales in addition to being a Wellgistics Health stockholder.

***Wellgistics,*** ***LLC Membership Interest Purchase Agreement***

During May 2023, Wellgistics Health entered into the Wellgistics MIPA regarding the Wellgistics Acquisition whereby Wellgistics Health agreed to acquire all of the outstanding membership interests of Wellgistics, LLC. Brian Norton is an employee of Wellgistics Health as well as the Chief Executive Officer of Wellgistics, LLC.

On August 4, 2023, Wellgistics Health and Wellgistics, LLC amended the Wellgistics MIPA to extend the termination date of the Wellgistics MIPA to no later than December 26, 2023, and designate Brian Norton as a representative who may act on behalf of all named sellers in the Wellgistics MIPA. On December 26, 2023, Wellgistics Health and Wellgistics, LLC further amended the Wellgistics MIPA to extend the termination date to March 29, 2024. On March 22, 2024, Wellgistics Health and Wellgistics, LLC further amended the Wellgistics MIPA to extend the termination date to August 31, 2024, and to provide for Wellgistics Health to extend such date for a maximum of ninety days, among other things.

On August 23, 2024, we closed on our acquisition of Wellgistics, LLC, thereby making Wellgistics, LLC a wholly owned subsidiary of Wellgistics Health. Closing occurred pursuant to the Wellgistics MIPA, which was first entered into on May 11, 2023, and subsequently amended, most recently on July 24, 2025. As amended, the purchase consideration that we agreed to pay the sellers of Wellgistics, LLC under the revised Wellgistics MIPA consists of:

● a closing cash payment of $10 million, $1 million of which was paid in immediately available funds to Zions Bank, a creditor of Wellgistics, LLC, by wire transfer, and the remainder of which was converted to common stock of the Company in July 2025;

● a promissory note in the aggregate principal amount of $15 million plus simple interest accruing annually equal to the "Prime Rate" as published by the *Wall Street Journal* on January 1 of the applicable year, together payable in two annual installments of $5 million each and a third annual installment of $7.5 million commencing on July 24, 2026;

● bonus payments in the form of our Common Stock in an aggregate amount of 2,666,224 shares, after accounting for the reverse stock split that we effected on December 5, 2024, that are subject to restrictions on transfer. Such restrictions shall be removed over three years commencing December 31, 2024;

● shares of restricted Common Stock in an aggregate amount of up to 1,333,111 shares, after accounting for the reverse stock split that we effected on December 5, 2024, that are subject to repurchase if such financial metrics are not met for calendar years 2024, 2025, and 2026 (the "**Financial Contingent Bonus Payments** "); and

● contingent bonus payments consisting of 50% cash and 50% our Common Stock to the extent that Wellgistics Health's EBITDA is in excess of 110% of certain established targets for each of the years ended December 31, 2024, December 31, 2025, and December 31, 2026.

The Financial Contingent Bonus Payments will no longer be subject to repurchase by Wellgistics Health, according to the following terms:

● For the calendar year ending December 31, 2024: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $47.2 million, and (ii) 222,185 shares of our Common Stock will no longer be subject to repurchase if the net operating income of Wellgistics, LLC prior to the provision for (a) interest expense and interest income, (b) federal, state, local and foreign taxes based on the income or profits, and (c) depreciation and amortization ("EBITDA") is greater than or equal to $4.2 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2024 is capped at 444,370 shares.

● For the calendar year ending December 31, 2025: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $57.7 million, and (ii) 222,185 shares of our Common Stock will no longer be subject to repurchase if the EBITDA of Wellgistics, LLC is greater than or equal to $6.5 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2025 is capped at 444,370 shares.

● For the calendar year ending December 31, 2026: (i) 222,185 shares of our Common Stock will no longer be subject to repurchase if the gross revenue of Wellgistics, LLC is greater than or equal to $63.5 million, and (ii) 222,186 shares of our Common Stock will no longer be subject to repurchase if the EBITDA of Wellgistics, LLC is greater than or equal to $7.5 million. However, each metric will have been deemed to have been met if the final financial metrics are at least ninety percent (90%) of each target. Further, the largest number of shares that will no longer be subject to repurchase in calendar year 2026 is capped at 444,371 shares.

***April 2025 Promissory Note***

On April 4, 2025, the Company issued a promissory note (the "**April 2025 Note**") to a Sansur Associates, LLC, an entity beneficially owned by Surendra Ajjarapu, the Chairman of the Company's Board, in the principal amount of $500,000. The April 2025 Note bore interest at a rate equal to ten percent (10%) per annum, is unsecured, and was to mature on October 7, 2025. No funds were advanced under the April 2025 Note and the Company and Sansur Associates, LLC mutually agreed to terminate the note in August 2025.

***Executive Employment Agreements***

On January 18, 2024, the Company entered into an executive employment agreement with Tim Canning, its Chief Executive Officer. The initial term of the agreement expires on December 31, 2026, and the term will be automatically renewed until the agreement is terminated pursuant to its terms. Mr. Canning's initial annual base salary was $300,000 and such base salary was subject to adjustment by the compensation committee each year. Mr. Canning was also eligible to receive a yearly cash, stock, or equity bonus and a yearly performance bonus of up to 75% of his base salary. Such bonus amounts were determined by the compensation committee. In addition to certain customary benefits, Mr. Canning received a monthly apartment allowance of $2,500. As previously disclosed, Mr. Canning resigned from the Company, effective as of February 28, 2025. Mr. Canning's decision to resign was not the result of any dispute or disagreement with the Company, the Company's management or the Board on any matter relating to the Company's operations, policies or practices.

On April 15, 2024, the Company entered into a contract agreement with Aletheia Strategic Advisory LLC ("**Aletheia**"), whereby Vishnu Balu—the sole member of Aletheia—agreed to serve as Wellgistics Health's financial lead or Chief Financial Officer. Mr. Balu's formal title with Wellgistics Health was Vice President of Finance and Chief Financial Officer. The agreement may be terminated upon three-month notice unless Mr. Balu's position is converted to another full-time position. In exchange for Mr. Balu service, Wellgistics Health committed to pay Mr. Balu an annual fee equal to $200,000. Mr. Balu resigned as the Company's Chief Financial Officer effective as of April 22, 2025. Mr. Balu's decision to resign is not the result of any dispute or disagreement with the Company, the Company's management or the Company's Board of Directors on any matter relating to the Company's operations, policies or practices.

On February 28, 2025, the Company and Mr. Norton entered into an employment agreement (the "**Norton Employment Agreement**") that provides for an annual base salary of $490,000. Mr. Norton's base salary may increase as determined by the compensation committee of the Company's Board of Directors in its sole discretion, and will increase by 5% in the event Mr. Norton meets at least 90% of certain annual performance metrics established by the compensation committee. Furthermore, Mr. Norton is eligible for a performance based bonus of up to 100% of his base salary as determined by the compensation committee that is contingent upon the achievement of certain performance objectives and a yearly discretionary cash stock or equity bonus in an amount determined by the compensation committee. The Norton Employment Agreement provides an automobile allowance of $1,000 per month and a relocation allowance of $15,000. Pursuant to the Norton Employment Agreement, the Company granted Restricted Stock Unit awards ("**RSUs**") of 9,000,000 shares of Common Stock to Mr. Norton that vest over three years in equal amounts contingent upon the Company realizing certain gross revenue and gross profit targets. In the event that Mr. Norton resigns for "good reason" or is terminated by the Company without "cause," each as defined in the Norton Employment Agreement, or a change of control takes place, all outstanding and unvested RSUs will immediately accelerate and vest in full. Under the Norton Employment Agreement, Mr. Norton is eligible for other employee benefits in accordance with the Company's policies and plans.

On April 22, 2025, the Company and Mr. DiSiena entered into an employment agreement (the "**DiSiena Employment Agreement**") that provides for Mr. DiSiena to be paid an annual salary of $200,000 per year, which will increase to $275,000 per year upon the Company's completion of a funding round in a minimum amount of $10 million. Mr. DiSiena also is eligible for a discretionary bonus as determined by the Company's Board of Directors. Mr. DiSiena is eligible for other employee benefits in accordance with the Company's policies and plans. In addition, the Company has agreed, pursuant to the DiSiena Employment Agreement, to issue 150,000 restricted shares of the Company's Common Stock to Mr. DiSiena on or before July 21, 2025. These shares of Common Shares vest in equal annual installments, with the first installment vesting on December 31, 2025, contingent upon Mr. DiSiena remaining employed by and in good standing with the Company as of each vesting date. The DiSiena Employment Agreement is effective for 3 years and will be automatically renewed for successive one-year terms unless either party provides written notice of an intention to terminate employment or the DiSiena Employment Agreement is otherwise terminated pursuant to its terms.

On June 10, 2025 the Company and Mr. Madsen entered into an employment agreement (the "**Madsen Employment Agreement**") that provides for Mr. Madsen to be paid an annual salary of $450,000 per year. Mr. Madsen also is eligible for (i) a discretionary bonus as determined by the Company's Board of Directors provided that Mr. Madsen has been employed for the duration of the relevant fiscal year and (ii) an annual performance bonus equal to a percentage of Mr. Madsen's base salary as determined by the Compensation Committee of the Company's Board of Directors. Mr. Madsen also receives an automobile allowance of $1,000 per month and will receive a $50,000 signing and relocation bonus of $50,000 upon the Company's completion of a funding round for the Company. Mr. Madsen is eligible for other employee benefits in accordance with the Company's policies and plans. The Madsen Employment Agreement also contains customary representations and warranties and restrictive covenants. The Madsen Employment Agreement is effective for 3 years and will be automatically renewed for successive one-year terms unless either party provides written notice of an intention to terminate employment or the Madsen Employment Agreement is otherwise terminated pursuant to its terms.

***Indemnification Agreements***

On January 9, 2024, Wellgistics Health entered into an indemnification agreement with Tim Canning, its Chief Executive Officer. The agreement requires Wellgistics Health to indemnify Mr. Canning for certain expenses, including reasonable attorneys' fees, incurred by him in certain actions or proceedings arising out of his services as Wellgistics Health's Chief Executive Officer.

Wellgistics Health intends to enter into separate indemnification agreements with its other directors and executive officers that will, among other things, require Wellgistics Health to indemnify Wellgistics Health's directors and executive officers for certain expenses, including reasonable attorneys' fees, incurred by such directors and executive officers in generally any action or proceeding arising out of their services as directors or executive officers of Wellgistics Health or any other company or enterprise to which the person provides services at Wellgistics Health's request. Wellgistics Health believes that indemnification agreements are necessary to attract and retain qualified persons as directors and officers. These indemnification provisions may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties, and may reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit Wellgistics Health and its stockholders. A stockholder's investment may decline in value to the extent Wellgistics Health pays the costs of settlement and damage awards against directors and officers pursuant to the indemnification provisions.

**Related Party Transaction Policy**

Our board of directors intends to adopt a written related person transaction policy to set forth the policies and procedures for the review and approval or ratification of related person transactions. This policy will cover any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we are to be a participant, the amount involved exceeds $100,000 and a related person had or will have a direct or indirect material interest, including purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

**PLAN OF DISTRIBUTION**

We have engaged (the "**Placement Agent**") to act as our exclusive placement agent to solicit offers to purchase the securities offered pursuant to this prospectus on a "reasonable best efforts" basis. The engagement agreement does not give rise to any commitment by the Placement Agent to purchase any of our securities, and the Placement Agent will have no authority to bind us by virtue of the engagement agreement. The Placement Agent is not purchasing or selling any of the securities offered by us under this prospectus, nor is it required to arrange for the purchase or sale of any specific number or dollar amount of securities. This is a best efforts offering and there is no minimum offering amount required as a condition to the closing of this offering. The Placement Agent has agreed to use reasonable best efforts to arrange for the sale of the securities by us. Therefore, we may not sell all of the shares of Common Stock, Pre-Funded Warrants and Warrants being offered. The terms of this offering are subject to market conditions and negotiations between us, the Placement Agent and prospective investors. The Placement Agent does not guarantee that it will be able to raise new capital in any prospective offering. The Placement Agent may engage sub-agents or selected dealers to assist with the offering.

Investors purchasing securities offered hereby will have the option to execute a securities purchase agreement with us. In addition to rights and remedies available to all purchasers in this offering under federal securities and state law, the purchasers which enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue a claim for breach of contract is material to larger purchasers in this offering as a means to enforce the following covenants uniquely available to them under the securities purchase agreement: (i) a covenant to not enter into variable rate financings for a period of one year following the closing of the offering, subject to certain exceptions; and (ii) a covenant to not enter into any equity financings for 60 days from closing of the offering, subject to certain exceptions. The nature of the representations, warranties and covenants in the securities purchase agreements shall include:

● standard issuer representations and warranties on matters such as organization, qualification, authorization, no conflict, no governmental filings required, current in SEC filings, no litigation, labor or other compliance issues, environmental, intellectual property and title matters and compliance with various laws such as the Foreign Corrupt Practices Act; and

● covenants regarding matters such as registration of warrant shares, no integration with other offerings, no stockholder rights plans, no material nonpublic information, use of proceeds, indemnification of purchasers, reservation and listing of shares of Common Stock, and no subsequent equity sales for 60 days, subject to certain exceptions.

This offering will terminate on , 2025, unless we decide to terminate the offering (which we may do at any time in our discretion) prior to that date. We will have one closing for all the securities purchased in this offering. The public offering price per share (or Pre-Funded Warrant) and accompanying Warrants will be fixed for the duration of this offering.

The Placement Agent expects to deliver the shares and securities to the purchasers in the offering on or about , 2025, subject to satisfaction of certain conditions.

**Fees and Expenses** 

The following table shows the per share price and total cash fees we will pay to the Placement Agent in connection with the sale of the securities pursuant to this prospectus.

---

| | | | |
|:---|:---|:---|:---|
|  | **Per Share and**<br> **accompanying Warrant** | **Per Pre-Funded<br> Warrant and**<br> **accompanying Warrant** | **Total** |
| Public offering price | $| $| $|
| Placement Agent Fees | $| $| $|
| Proceeds before expenses to us | $| $| $|

---

We have agreed to pay the Placement Agent a total cash fee equal to 7.0% of the gross proceeds of this offering. We will also reimburse the Placement Agent's legal fees and expenses in an amount up to $100,000 and up to $15,950 for the expenses of its clearing firm. We estimate the total offering expenses of this offering that will be payable by us, excluding the Placement Agent's fees and expenses, will be approximately $ million. After deducting the Placement Agent's fees and our estimated offering expenses, we expect the net proceeds from this offering to be approximately $ million.

**Placement Agent Warrants**

We have agreed to issue Placement Agent Warrants to the Placement Agent to purchase a number of shares of our Common Stock equal to 7.0% of the aggregate number of shares of Common Stock and Pre-Funded Warrants sold to the investors in this offering. The Placement Agent Warrants will have an exercise price of $(125% of the public offering price per share of Common Stock and accompanying Warrant) and will terminate on the five year anniversary of commencement of sales in this offering. Pursuant to FINRA Rule 5110(e), the Placement Agent Warrants and any shares of common stock issued upon exercise of the Placement Agent Warrants shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of commencement of sales of this offering, except the transfer of any security: (i) by operation of law or by reason of reorganization of the issuer; (ii) to any FINRA member firm participating in the offering and the officers, partners, registered persons or affiliates thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time period; (iii) if the aggregate amount of our securities held by the placement agent or related persons does not exceed 1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund and the participating members in the aggregate do not own more than 10% of the equity in the fund; (v) the exercise or conversion of any security, if all securities remain subject to the lock-up restriction set forth above for the remainder of the time period; (vi) if we meet the registration requirements of Forms S-3, F-3 or F-10; or (vii) back to us in a transaction exempt from registration with the SEC. The Placement Agent Warrants are registered on the registration statement of which this prospectus is a part. The form of the Placement Agent Warrants is included as an exhibit to the registration statement of which this prospectus forms a part.

**Right of First Refusal**

We have also granted the Placement Agent a right of first refusal to act as the sole book-running manager, sole underwriter, sole placement agent or sole agent, as applicable, for each and every future debt financing or refinancing and public or private equity offering or acquisition or disposition by us or any of our successors from the date hereof until the 12-month anniversary following consummation of this offering.

**Tail** 

We have also agreed to pay the Placement Agent a tail fee equal to both the cash and warrant compensation in this offering, if any investor who was contacted or introduced to us by the Placement Agent provides us with capital in any public or private offering or other financing or capital raising transaction during the 12-month period following expiration or termination of our engagement with the Placement Agent.

**Determination of Offering Price** 

The public offering price per share (or Pre-Funded Warrant) and accompanying Warrant we are offering and the exercise prices and other terms of the Warrants were negotiated between us and the investors, in consultation with the Placement Agent based on the trading of our Common Stock prior to this offering, among other things. Other factors considered in determining the public offering prices of the securities we are offering and the exercise prices and other terms of the Warrants include the history and prospects of our Company, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant. The public offering price per share (or Pre-Funded Warrant) and accompanying Warrant will be fixed for the duration of this offering.

**Indemnification** 

We have agreed to indemnify the Placement Agent against certain liabilities, including certain liabilities arising under the Securities Act, or to contribute to payments that the Placement Agent may be required to make for these liabilities.

**Regulation M** 

The Placement Agent may be deemed to be underwriters within the meaning of Section 2(a)(11) of the Securities Act and any fees received by them and any profit realized on the sale of the securities by them while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. The Placement Agent will be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities by the Placement Agent. Under these rules and regulations, the Placement Agent may not (i) engage in any stabilization activity in connection with our securities; and (ii) bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until they have completed their participation in the distribution.

**Electronic Distribution** 

A prospectus in electronic format may be made available on a website maintained by the Placement Agent and the Placement Agent may distribute prospectuses electronically. Other than the prospectus in electronic format, the information on these websites is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the Placement Agent and should not be relied upon by investors.

**Lock-up Agreements** 

We and each of our officers and directors have agreed with the Placement Agent to be subject to a lock-up period of 60 days following the date of closing of the offering pursuant to this prospectus. This means that, during the applicable lock-up period, we and such persons may not offer for sale, contract to sell, sell, distribute, grant any option, right or warrant to purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any of our shares of Common Stock or any securities convertible into, or exercisable or exchangeable for, shares of Common Stock, subject to customary exceptions. The Placement Agent may waive the terms of these lock-up agreements in its sole discretion and without notice. In addition, we have agreed to not issue any securities that are subject to a price reset based on the trading prices of our Common Stock or upon a specified or contingent event in the future or enter into any agreement to issue securities at a future determined price for a period of one year following the closing date of this offering, subject to an exception. The Placement Agent may waive this prohibition in its sole discretion and without notice.

**Other Relationships**

From time to time, the Placement Agent may provide in the future, various advisory, investment and commercial banking and other services to us in the ordinary course of business, for which it may receive customary fees and commissions. Except as disclosed in this prospectus, we have no present arrangements with the Placement Agent for any services.

**Transfer Agent and Registrar** 

Our transfer agent and registrar for our Common Stock is Colonial Stock Transfer Company, Inc., 7840 S 700 E, Sandy, UT 84070.

**Listing** 

Our Common Stock is listed on Nasdaq under the trading symbol "WGRX". We do not plan to list the Warrants or the Pre-Funded Warrants on the Nasdaq Capital Market or any other securities exchange or trading market.

**LEGAL MATTERS**

Certain legal matters in connection with this offering will be passed upon for us by Dykema Gossett PLLC. has acted as counsel for the Placement Agent with respect to this offering.

**EXPERTS**

The financial statements as of December 31, 2024, and December 31, 2023, incorporated by reference in this prospectus have been audited by Suri & Co., Chartered Accountants ("**Suri**"), an independent registered public accounting firm, as set forth in their report thereon, which and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing. Suri is a public accounting firm registered with the PCAOB.

**RECENT CHANGE IN AUDITOR**

As reported on our Current Report on Form 8-K filed with the SEC on July 5, 2025 (the "**Change in Auditor 8-K**"), on July 7, 2025, our Audit Committee approved the dismissal of Suri as our independent registered public accounting firm and also approved the appointment of UHY LLP as the Company's new independent registered public accounting firm for the fiscal year ending December 31, 2025.

The reports of Suri on the Company's consolidated financial statements as of and for the years ended December 31, 2024 and 2023 contained a note relating to the Company's ability to continue as a going concern. Other than this note, Suri's reports on the Company's financial statements for the fiscal years ended December 31, 2024 and December 31, 2023 contained no adverse opinions or disclaimers of opinions and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended December 31, 2024 and December 31, 2023, there were (i) no "disagreements" (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between Suri and us on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Suri, would have caused Suri to make reference to the subject matter of the disagreement in Suri's reports on the Company's consolidated financial statements for such years, and (ii) no "reportable events" (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).

We provided Suri with a copy of the disclosures it has made and requested that Suri furnish us with a letter addressed to the SEC stating whether Suri agrees with such disclosures and, if not, stating the respects in which Suri does not agree. A copy of Suri's letter to the SEC, dated July 8, 2025, is included with the registration statement of which this prospectus forms a part as Exhibit 16.1.

During the fiscal years ended December 31, 2024 and December 31, 2023, neither the Company, nor anyone on its behalf, consulted with UHY LLP regarding: (i) the application of accounting principles to a specified transaction, either proposed or completed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report nor oral advice was provided to us that UHY LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a "disagreement" (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a "reportable event" (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).

**information incorporated by reference**

The SEC allows us to "incorporate by reference" information that we file with them. Incorporation by reference allows us to disclose important information to you by referring you to those other documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We filed a registration statement on Form S-1 under the Securities Act with the SEC with respect to the securities being offered pursuant to this prospectus. You should refer to the registration statement, including the exhibits and schedules attached to the registration statement and the information incorporated by reference, for further information about us and the securities being offered pursuant to this prospectus. The documents we are incorporating by reference into this prospectus are:

● our Annual Report on [Form 10-K](https://www.sec.gov/ix?doc=/Archives/edgar/data/2030763/000164117225000612/form10-k.htm) for the fiscal year ended December 31, 2024, filed on March 25, 2025;

● our Quarterly Report on [Form 10-Q](https://www.sec.gov/Archives/edgar/data/2030763/000164117225009565/form10-q.htm) for the three months ended March 31, 2025, filed on May 12, 2025;

● our Quarterly Report on [Form 10-Q](https://www.sec.gov/Archives/edgar/data/2030763/000164117225024873/form10-q.htm) for the six months ended June 30, 2025, filed on August 19, 2025; and

● Our Current Reports on Form 8-K filed on [February 26, 2025](https://www.sec.gov/ix?doc=/Archives/edgar/data/2030763/000149315225008397/form8-k.htm) , [February 28, 2025](https://www.sec.gov/ix?doc=/Archives/edgar/data/2030763/000149315225008723/form8-k.htm) , [March 6, 2025](https://www.sec.gov/ix?doc=/Archives/edgar/data/2030763/000149315225009442/form8-k.htm) , [March 21, 2025](https://www.sec.gov/ix?doc=/Archives/edgar/data/2030763/000149315225011154/form8-k.htm) , [March 27, 2025](https://www.sec.gov/ix?doc=/Archives/edgar/data/2030763/000164117225000987/form8-k.htm) , [April 11, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225003835/form8-k.htm) , [April 18, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225005404/form8-k.htm) , [April 24, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225006003/form8-k.htm) , [May 15, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225010557/form8-k.htm) , [July 8, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225018229/form8-k.htm) , [July 30, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225021455/form8-k.htm) , [August 14, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225024053/form8-k.htm) , and [August 22, 2025](https://www.sec.gov/Archives/edgar/data/2030763/000164117225025238/form8-k.htm) .

We also incorporate by reference into this prospectus all documents (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) that are filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the registration statement of which this prospectus is a part and prior to the effectiveness of such registration statement and all documents that are filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus but prior to the termination of the offering. These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements and information statements.

Any statement contained herein or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of the document to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this document modifies or supersedes the statement.

We will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon written or oral request, a copy of any or all documents that are incorporated by reference into this prospectus, but not delivered with the prospectus, other than exhibits to such documents unless such exhibits are specifically incorporated by reference into the documents that this prospectus incorporates. You should direct oral or written requests to our corporate secretary, who can be contacted at 6308 Benjamin Rd, Suite 708, Tampa, Florida 33634 or (800) 261-0281. You may also access these documents, free of charge on the SEC's website at *www.sec.gov*.

**WHERE YOU CAN FIND MORE INFORMATION**

We have filed with the SEC a registration statement on Form S-1, which includes amendments and exhibits, under the Securities Act and the rules and regulations under the Securities Act for the registration of the Common Stock being offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all the information that is in the registration statement and its exhibits and schedules. Statements in this prospectus that summarize documents are not necessarily complete, and in each case you should refer to the copy of the document filed as an exhibit to the registration statement. The registration statement and other public filings can be obtained from the SEC's internet site at *www.sec.gov*.

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's website at *www.sec.gov*. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at 3000 Bayport Drive, Suite 950, Tampa, FL 33607 or (844) 203-6092. Our website addresses is *www.wellgisticshealth.com*. Information on, or that may be accessed through, our website is not incorporated by reference into this prospectus and should not be considered a part of this prospectus.

**WELLGISTICS HEALTH, INC.**

**INDEX TO FINANCIAL STATEMENTS**

**WOOD SAGE, LLC AND SUBSIDIARIES**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#add_001) | F-2 |
| [Consolidated Balance Sheets for the year ended December 31, 2023](#fin_001) | F-3 |
| [Consolidated Statements of Operations for the year ended December 31, 2023, and December 31, 2022](#fin_002) | F-4 |
| [Consolidated Statements of Stockholders' (Deficit) Equity for the year ended December 31, 2023, and December 31, 2022](#fin_003) | F-5 |
| [Consolidated Statements of Cash Flows for the year ended December 31, 2023, and December 31, 2022](#fin_004) | F-6 |
| [Notes to Financial Statements](#fin_005) | F-7 |

---

---

| | |
|:---|:---|
| [Consolidated Balance Sheet as of March 31, 2024 (unaudited) and December 31, 2023](#fin_006) | F-16 |
| [Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (unaudited)](#fin_007) | F-17 |
| [Consolidated Statements of Stockholders' (Deficit) Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited)](#fin_008) | F-18 |
| [Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)](#fin_009) | F-19 |
| [Notes to Financial Statements (unaudited)](#fin_010) | F-20 |

---

**WELLGISTICS, LLC**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#fin_011) | F-28 |
| [Consolidated Balance Sheets for the year ended December 31, 2023, and December 31, 2022](#fin_012) | F-29 |
| [Consolidated Statements of Operations for the year ended December 31, 2023, and December 31, 2022](#fin_013) | F-30 |
| [Consolidated Statements of Stockholders' (Deficit) Equity for the year ended December 31, 2023, and December 31, 2022](#fin_014) | F-31 |
| [Consolidated Statements of Cash Flows for the year ended December 31, 2023, and December 31, 2022](#fin_015) | F-32 |
| [Notes to Financial Statements](#fin_016) | F-33 |

---

---

| | |
|:---|:---|
| [Consolidated Balance Sheet as of June 30, 2024 (unaudited) and December 31, 2023](#D_001) | F-47 |
| [Consolidated Statements of Operations for the Six Months Ended June 30, 2024 and 2023 (unaudited)](#D_002) | F-48 |
| [Consolidated Statements of Stockholders' (Deficit) Equity for the Six Months Ended June 30, 2024 and 2023 (unaudited)](#D_015) | F-49 |
| [Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (unaudited)](#D_003) | F-50 |
| [Notes to Financial Statements (unaudited)](#D_004) | F-51 |

---

**COMMUNITY SPECIALTY PHARMACY, LLC**

---

| | |
|:---|:---|
| [Condensed Balance Sheets as of and for the periods ended August 21, 2023 and 2022](#D_005) | F-59 |
| [Condensed Statements of Operations and Comprehensive Loss as of and for the periods ended August 21, 2023 and 2022](#D_006) | F-60 |
| [Condensed Statements of Members' Equity as of and for the periods ended August 21, 2023 and 2022](#D_007) | F-61 |
| [Condensed Statements of Cash Flows as of and for the periods ended August 21, 2023 and 2022](#D_008) | F-62 |
| [Notes to the Condensed Financial Statements](#D_009) | F-63 |

---

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#ga_001) | F-68 |
| [Balance Sheets (As Restated) as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_010) | F-69 |
| [Statements of Operations and Comprehensive Loss as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_011) | F-70 |
| [Statements of Members Deficit as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_012) | F-71 |
| [Statements of Cash Flows as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_013) | F-72 |
| [Notes to the Restated Financial Statements](#D_014) | F-73 |

---

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#ga_002) | F-86 |
| [Balance Sheets as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_016) | F-87 |
| [Statements of Operations and Comprehensive Loss as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_017) | F-88 |
| [Statements of Members' Equity as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_018) | F-89 |
| [Statements of Cash Flows as of and for the years ended December 31, 2022 and 2021 (As Restated)](#D_019) | F-90 |
| [Notes to the Restated Financial Statements](#D_020) | F-91 |

---

---

| | |
|:---|:---|
| [Condensed Balance Sheets as of and for the periods ended August 21, 2023 and 2022 (unaudited)](#Alliance_021) | F-100 |
| [Condensed Statements of Operations and Comprehensive Loss as of and for the periods ended August 21, 2023 and 2022 (unaudited)](#Alliance_022) | F-101 |
| [Condensed Statements of Members' Equity as of and for the periods ended August 21, 2023 and 2022 (unaudited)](#Alliance_023) | F-102 |
| [Condensed Statements of Cash Flows as of and for the periods ended August 21, 2023 and 2022 (unaudited)](#Alliance_024) | F-103 |
| [Notes to the Condensed Financial Statements as of and for the periods ended August 21, 2023 and 2022 (unaudited)](#Alliance_025) | F-104 |

---

 **Report of Independent Registered Public Accounting Firm** 

To the members of Wood Sage, LLC.

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of Wood Sage, LLC and the Subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), consolidated statements of members' equity (deficit) and consolidated statements of cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with Generally Accepted Accounting Principles of United States of America.

**Matters related to Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs, it may be required to reduce the scope of its planned development. The company has suffered losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have, nor we have engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matter**

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) relate
 to accounts or disclosures that are material to the consolidated financial statements and

(2) involved
 our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

**/s/ Suri & Co., Chartered Accountants**

We have served as the Company's auditors since 2021.

Date: 24<sup>th</sup> April 2024

Place: Chennai, India

 **WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $50563 | $- |
| &nbsp;&nbsp;&nbsp;Accounts receivables | 73782 |  |
| &nbsp;&nbsp;&nbsp;Inventories | 43741 |  |
| &nbsp;&nbsp;&nbsp;Due from related parties | 67793 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 235878 |  |
| Intangible assets under development | 991736 |  |
| Goodwill | 740207 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1967821 | $- |
| **LIABILITIES AND MEMBERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $294130 | $15428 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 241726 |  |
| &nbsp;&nbsp;&nbsp;Due to related parties | 663114 |  |
| &nbsp;&nbsp;&nbsp;Note payable | 1300000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 2498970 | 15428 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $2498970 | $15428 |
| Commitments and contingencies |  |  |
| Members' equity (deficit): |  |  |
| &nbsp;&nbsp;&nbsp;Members' capital | 1878 |  |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (533027) | (15428) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total members' equity (deficit) | (531149) | (15428) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' equity (deficit) | $1967821 | $- |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Net sales | $338864 | $- |
| Cost of sales | 323068 | - |
| &nbsp;&nbsp;&nbsp;Gross profit (loss) | 15796 |  |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 533395 | 15228 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 533395 | 15228 |
| Loss from operations | (517599) | (15228) |
| Net loss | $(517599) | $(15228) |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY**

---

| | | | |
|:---|:---|:---|:---|
|  | **Members'**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total Members'**<br>**Deficit** |
| **Balances at December 31, 2021** | $- | $(200) | $(200) |
| Net loss | - | (15228) | (15228) |
| **Balances at December 31, 2022** |  | (15428) | (15428) |
| Capital contributions from members | 1878 |  | 1878 |
| Net loss | - | (517599) | (517599) |
| **Balances at December 31, 2023** | $1878 | $(533027) | $(531149) |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(517599) | $(15228) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (30759) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 27988 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 22246 | 15228 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 21422 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from / to related parties | 595322 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | 118620 | - |
| **Cash flows from investing activities:** |  |  |
| Payments made for intangible assets under development | (133238) |  |
| Cash acquired in business combinations | 63303 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | (69935) | - |
| **Cash flows from financing activities:** |  |  |
| Capital contributions from members | 1878 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 1878 | - |
| **Net increase in cash and cash equivalents** | 50563 |  |
| Cash and cash equivalents at beginning of year | - | - |
| Cash and cash equivalents at end of year | $50563 | $- |
| **Supplemental disclosure of non-cash investing and financing activities:** |  |  |
| Note payable issued for business combinations | $1300000 | $- |
| Short-term advances used to repay notes payable on behalf of Company | $225000 | $- |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1. Organization and Summary of Significant Accounting Policies**

Wood Sage, LLC ("Woodsage", the "Company") was formed as a limited liability company on June 26, 2014, when the Company's Articles of Organization became effective upon filing with the Florida Department of State, Division of Corporations (the "DOC").

The Company's headquarters are in Tampa, Florida. Its fiscal year ends on December 31.

*Acquisitions of CSP and APS*

On January 20, 2023, Wood Sage, LLC ("Woodsage"), Community Specialty Pharmacy, LLC, a Florida limited liability company ("CSP"), and TRxADE HEALTH, Inc., a Delaware corporation("TRxADE") entered into a Membership Interest Purchase Agreement (the "CSP MIPA"), pursuant to which TRxADE sold and Woodsage acquired one hundred percent (100%) of the membership interest it owns in CSP in exchange for (i) One Hundred Thousand Dollars ($100,000) and (ii) all amounts due and payable to TRxADE from Woodsage under the Master Service Agreement (defined below). In January 2023, Danam and CSP entered into an Amendment to the CSP MIPA, pursuant to which the parties revised the Closing Payment to One Hundred Thousand Dollars ($100,000) plus any amounts owed under the Management Services Agreement (as defined in the CSP MIPA).

On January 20, 2023, Woodsage , Alliance Pharma Solutions, LLC, a Florida limited liability company ("APS"), and TRxADE entered into a Membership Interest Purchase Agreement (the "APS MIPA"), pursuant to which TRxADE sold and Woodsage acquired one hundred percent (100%) of the membership interest it owns in APS in exchange for (i) One Hundred Twenty Five Thousand Dollars ($125,000) and (ii) all amounts due and payable to TRxADE from Woodsage under the Master Service Agreement. In January 2023, Danam and APS entered into an Amendment to the APS MIPA (the "APS MIPA Amendment"), pursuant to which the parties revised the Closing Payment to One Million Two Hundred Thousand Dollars ($1,200,000) plus any amounts owed under the Management Service Agreement (as defined in the APS MIPA).

On May 22, 2023, Woodsage entered into a non-interest bearing promissory note ("Note") with Integral (the successor in interest to TRxADE, "Integral"), which is owned by Suren Ajjarapu and Prashant Patel, to satisfy the purchase price under the CSP MIPA. Upon the satisfaction of all closing conditions, the CSP MIPA closed in August 2023 (see below).

On August 22, 2023, Woodsage entered into a non-interest bearing promissory note ("Note") with Integral Health pursuant to which Integral made a certain loan to Woodsage in the amount of $1,300,000 to satisfy the purchase price under the CSP MIPA and APS MIPA. No later than 30 days after a change in control to Woodsage, the aggregate unpaid principal balance of the Note will be due and payable by Woodsage.

APS (d.b.a. DelivMeds) is developing a same day Pharma delivery software — Delivmeds.com and invested in SyncHealth MSO, LLC a managed services organization in January 2019, which investment was divested in February 2020. CSP is an accredited independent retail pharmacy with a focus on specialty medications and a community-based model offering home delivery services to patients.

**Acquisition of membership interests by Danam Health, Inc.**

In January 2023, Danam entered into a Membership Interest Purchase Agreement (the "Wood Sage MIPA") with Nikul Panchal, an individual resident of the State of Florida ("Seller"). The Seller owns all of the membership interest in Wood Sage, LLC, a Florida limited liability company (the "Company"). Upon the closing of the transaction contemplated in the Wood Sage MIPA, Seller will own one hundred percent (100%) of the membership interests in Community Specialty Pharmacy, LLC ("CSP") and Alliance Pharma Solutions, LLC ("APS") which the Seller will sell and Danam will acquire in exchange for (i) Four Hundred Thousand Dollars ($400,000) and (ii) all amounts due and payable to Seller from Danam under the Management Agreement, (the "Closing Payment").

In January 2023, the parties above entered into an Amendment to the Wood Sage MIPA, pursuant to which the parties revised the Closing Payment to Four Hundred Thousand Dollars ($400,000) plus any amounts owed under the Management Services Agreement (as defined in the Wood Sage MIPA).

In April 2023, the parties above entered into an Amendment to the Wood Sage MIPA, pursuant to which the parties revised the closing of the said agreement from April 30, 2023 to September 30, 2024. Upon the closure of the said transaction, Danam will own 100% of the membership interests in the Company as a part of Business combination (Refer Note 8 - Subsequent Events).

**Basis of Presentation and Principles of Consolidation**

The Company's fiscal year ends on December 31.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").

The consolidated financial statements include the accounts of Woodsage, APS and CSP since their respective acquisitions on August 22, 2023. All inter-company balances and transactions are eliminated on consolidation.

**Liquidity**

Historically, operations have been funded primarily positive operating cash flows, debt financing and capital contributions from its members. The Company has the ability to maintain the current level of spending or reduce expenditure to maintain operations.

**Reclassifications**

Certain prior year amounts have been reclassified to conform to the current year presentation.

**Use of Estimates**

The preparation of the Company's Consolidated Financial Statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the Consolidated Financial Statements. These estimates are based on information available through the date of the issuance of the Consolidated Financial Statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

**●** **provisions for income taxes and related valuation allowances and tax uncertainties;** 

**●** **recoverability of long-lived assets and their related estimated lives;** 

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**Inventories**

Inventories are stated at the lower of cost and net realizable value. Cost is determined on a first in first out basis. On a quarterly basis, we evaluate inventory for net realizable value using estimates based on historical experience, current or projected pricing trends, specific categories of inventory, age and expiration dates of on-hand inventory and manufacturer return policies. If actual conditions are less favorable than our assumptions, additional inventory write- downs may be required, and no reserve is maintained as obsolete or expired inventories are written off. We believe that the inventory valuation provides a reasonable approximation of the current value of inventory. There is no reserve for inventory obsolescence and inventory is not pledged during the periods presented.

**Accounts Receivable**

The Company's receivables are from customers and are collectible within 90 days. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence.

**Intangible Assets under Development**

Research expenditure is recognized as an expense and Development expenditure that meets specified criteria is recognized as the cost of an intangible asset. The company has begun capitalizing the expenses related to the app Delivmeds as the management has determined that the Company's app has crossed the research phase and has begun development.

**Comprehensive Income (Loss)**

Comprehensive income (loss) includes net income (loss) as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income (loss) and comprehensive income (loss) presented in the consolidated financial statements for the periods ended December 31, 2023, and December 31, 2022.

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

---

| | |
|:---|:---|
| Level 1 | Quoted prices are available in active markets for identical assets or liabilities. |
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| Level 3 | Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. |

---

The carrying amounts of cash, accounts receivable, inventories and accounts payable approximate fair value because of the short-term nature of these instruments. The company does not have any long-term debt.

**Revenue Recognition**

The Company adopted Accounting Standards Codification ("ASC") 606 on January 1, 2020, the new accounting guidance on revenue recognition. The Company is in the retail pharmacy business. and fills prescriptions for drugs written by a doctor and recognizes revenue at the time the patient confirms delivery of the prescription. Customer returns are not material. The following are the steps taken to recognize revenue.

Step One: Identify the contract with the customer — The prescription is written by a doctor for a customer and delivered to the Company. The prescription identifies the performance obligations in the contract. The Company fills the prescription and delivers to the Customer the prescription, fulfilling the contract. The collection is probable because there is confirmation that the customer has insurance for the reimbursement to the Company prior to filling of the prescription.

Step Two: Identify the performance obligations in the contract — Each prescription is distinct to the Customer.

Step Three: Determine the transaction price — The consideration is not variable. The transaction price is determined to be the price of the prescription at the time of delivery which considers the expected reimbursements from third party payors (e.g., pharmacy benefit managers, insurance companies and government agencies).

Step Four: Allocate the transaction price — The price of the prescription invoiced represents the expected amount of reimbursement from third party payors. There is no difference between contract price and "stand-alone selling price".

Step Five: Recognize revenue when or as the entity satisfies a performance obligation — Revenue is recognized upon the delivery of the prescription.

**Business Combinations**

The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

**Goodwill**

Goodwill is an asset representing the excess cost over the fair market value of net assets acquired in business combinations. In accordance with Intangibles - Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis when indicators of potential impairment exist. Goodwill is tested for impairment at the reporting unit level. The Company's reporting units discrete financial information is available and management regularly reviews the operating results. For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the reporting structure.

The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

The Company also has the option to proceed directly to the quantitative test. Under the quantitative impairment test, the estimated fair value of each reporting unit is compared to its carrying value, including goodwill. If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated to that reporting unit. Management can resume the qualitative assessment in any subsequent period for any reporting unit.

For 2023, management performed a qualitative impairment assessment of our reporting units, of which there were no indications that it was more likely than not that the fair value of our reporting units were less than their respective carrying values. As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized in 2023.

**Concentration of Credit Risks and Major Customers**

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corp limits. During the years ended December 31, 2023 and 2022, no sales to customers represented greater than 10% of revenue.

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits.

**Recent Accounting Pronouncements**

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these consolidated financial statements. The pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**Accounting Pronouncements Recently Adopted**

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (ASC 326), which provides guidance on measurement of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to U.S.GAAP that is based on expected losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023 the company determined that the update applied to trade receivables, but there is no material impact to the consolidated financial statements from the adoption of ASU 2016-13.

**Accounting Pronouncements Not Yet Adopted**

In February 2016, the FASB issued ASU No. 2016-02, Leases, to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related right-of-use asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The Company plans to adopt this new guidance when it acquires any new leases.

**Note 2. Going Concern**

The Company has a net loss of $517,599 for the year ended December 31, 2023 and members' deficit of $531,149 as of December 31, 2023. The Company's situation raises a substantial doubt on whether the entity can continue as a going concern in the next twelve months.

The Company's ability to continue as a going concern in the next twelve months following the date the consolidated financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results.

Management has evaluated these conditions and plans to generate revenues and raise capital as needed to satisfy its capital needs. During the next twelve months, the Company intends to fund its operations through debt and/or equity financing.

There are no assurances that management will be able to raise capital on terms acceptable to the Company. If it is unable to obtain sufficient amount of additional capital, it may be required to reduce the scope of its planned development, which could harm its business, financial condition, and operating results. The accompanying consolidated financial statements do not include any adjustments that might result from these uncertainties.

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

**Note 3. Business Combinations**

The Company evaluated the acquisitions of APS and CSP pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition.

The Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation:

---

| | | | |
|:---|:---|:---|:---|
|  | **APS** | **CSP** | **Total** |
| Cash and cash equivalents | $1050 | $62253 | $63303 |
| Accounts receivables |  | 43023 | 43023 |
| Inventories |  | 71728 | 71728 |
| Prepaid expenses and other assets |  | 465 | 465 |
| Intangible assets under development | 858498 |  | 858498 |
| Goodwill | 404765 | 335443 | 740207 |
| Accounts payable | (64313) | (192142) | (256455) |
| Other current liabilities | - | (220770) | (220770) |
| Purchase price consideration | $1200000 | $100000 | $1300000 |

---

Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes. The results of APS and CSP have been included in the consolidated financial statements since the date of acquisition.

*Unaudited Pro Forma Financial Information*

The following unaudited pro forma financial information presents the Company's financial results as if the APS and CSP acquisitions had occurred as of January 1, 2022. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company's future financial results. The unaudited pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Net sales | $1189617 | $889379 |
| Net loss | $(1054916) | $(515953) |

---

**Note 4. Intangible Assets under Development**

Intangible assets under development of the company consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Internal development cost - Delivmeds | $991736 | $- |

---

**Note 5. Note Payable**

On August 22, 2023, Woodsage entered into a non-interest bearing promissory note ("Note") with Integral Health pursuant to which Integral made a certain loan to Woodsage in the amount of $1,300,000 to satisfy the purchase price under the CSP MIPA and APS MIPA. No later than 30 days after a change in control to Woodsage, the aggregate unpaid principal balance of the Note will be due and payable by Woodsage. As of the date of these consolidated financial statements, the Note is still outstanding.

**Note 6. Related Party Transactions**

As of December 31, 2023, the Company's subsidiaries had $663,114 in amounts due to TRxADE, the Seller. The advances are unsecured, non-interest bearing and due on demand.

As of December 31, 2023, CSP had $67,793 in amounts due from Danam. The advances are unsecured, non-interest bearing and due on demand.

**Note 7. Accrued Expenses**

Accrued Expenses consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Accrued salaries and wages | $234526 | $- |
| Accrued professional fees | 7200 | - |
|  | $241726 | $- |

---

**Note 8. Commitments and Contingencies**

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 9. Subsequent Events**

On February 12, 2024, Danam entered into an Agreement and Plan of Merger (the "Merger Agreement") with Assure Holdings, Corp. ("Assure") and Assure Merger Corp., a newly formed wholly-owned subsidiary of Assure ("Assure Merger"). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the stockholders of Assure and Danam, Assure Merger will be merged with and into Danam (the "Merger"), with Danam surviving the Merger as a wholly-owned subsidiary of Assure. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the "Effective Time"): (i) each share of Danam capital stock issued and outstanding immediately prior to the Effective Time shall automatically be converted into and become the right to receive the applicable per share portion of the "merger consideration" as set forth in the allocation statement to be delivered pursuant to the Merger Agreement ("merger consideration" is defined in the Merger Agreement to mean a number of shares of common stock of Assure equal to (a) the quotient obtained by dividing (i) the number of shares of Assure capital stock on a fully diluted basis (the "Assure Fully Diluted Share Number") by (ii) the quotient of (A) the adjusted value of Assure dividend by (B) the sum of the adjusted value of Assure and the adjusted value of Danam, minus (b) the Assure Fully Diluted Share Number minus (c) the number of shares of common stock of Assure the warrants of Danam will become exercisable for upon closing of the Merger); (ii) each outstanding warrant of Danam will be assumed by Assure and become a warrant to purchase an adjusted number of shares of common stock of Assure, at an adjusted exercise price per share but subject to the same terms and conditions as the warrant of Danam.

Following closing of the Merger, the former Assure equity holders immediately before the Merger are expected to own approximately 10% of the outstanding capital stock of the combined company on a fully diluted basis and the equity holders of Danam immediately before the Merger are expected to own approximately 90% of the outstanding capital stock of the combined company on a fully diluted basis.

Upon closing of the Merger, Assure will be renamed Danam Health Holdings Corp. Suren Ajjarapu will serve as Chairman of the Board of Directors and Tim Canning will serve as the Chief Executive Officer of the combined company. The Merger Agreement provides that the Board of Directors of the combined company will be comprised of five members which will be filled upon completion of the Merger to be designated by Danam.

The Merger Agreement contains customary representations, warranties and covenants of Assure and Danam, including covenants relating to the conduct of the business of both Assure and Danam from the date of signing the Merger Agreement through closing of the Merger, obtaining the requisite approval of the stockholders of Assure and Danam and maintain the listing of the common stock of Assure on the NASDAQ Capital Market and applying for the continued listing of Danam after the closing of the Merger on the NASDAQ Capital Market. Under the terms of the Merger Agreement, Assure has also agreed not to solicit from any person an acquisition proposal (as defined in the Merger Agreement) for Assure.

In connection with the Merger, Assure will prepare and file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 that will contain a prospectus and a proxy statement, and will seek the approval of Assure's stockholders with respect to certain actions, including the following (collectively, the "Assure Stockholder Proposals"):

(i) the Sale transaction (as defined in the Merger Agreement;

(ii) the Merger;

(iii) the change of control of Assure resulting from the transactions contemplated by this Agreement pursuant to the rules of NASDAQ;

(iv) the post-closing equity plan for Assure;

(v) the post-closing board composition;

(vi) an amendment to the certificate of incorporation of Assure to effect a reverse stock split; and

(vii) an amendment to the certificate of incorporation of Assure to change the name of Assure.

The Board has agreed to recommend the approval of the Assure Stockholder Proposals to the stockholders and to solicit proxies in support of the approval of the Assure Stockholder Proposals at a meeting of the stockholders to be held for that purpose.

The Merger Agreement contains a limited contractual ability for the Board, in accordance with its fiduciary duties to the stockholders, to change its recommendation to the stockholders upon receipt of a superior proposal subject to certain terms and conditions therein, including providing Danam notice of the superior proposal and time to make a counter-proposal to amend the terms of the Merger Agreement.

Under the Merger Agreement, Assure has agreed to maintain certain indemnity rights (including advancing expenses) of the current officers and directors of Assure as they exist in the governing documents of Assure and maintain director and officers insurance for a period of 6 years following the closing of the Merger.

The closing of the Merger is subject to customary closing conditions, including, among other things, (i) the required approval of the stockholders of Assure and Danam, (ii) the accuracy of the representations and warranties of the parties made in the Merger Agreement, subject to materiality qualifiers, (iii) compliance by the parties with their respective covenants under the Merger Agreement, and (iv) the approval of NASDAQ of the continued listing of Danam after the closing of the Merger. Further, closing of the Merger is conditioned on the simultaneous closing of a sale transaction of Assure's assets. The obligation of Assure is conditioned upon Danam completing acquisition transactions as set forth in the Merger Agreement, including completing the acquisitions of (a) all of the membership interests in Wood Sage, LLC, a Florida limited liability company and (b) all of the membership interests in Wellgistics, set forth in the applicable acquisition transactions agreements, both such acquisition transactions to close prior to or concurrent with the Merger. The obligation of Danam to close the Merger is also subject to satisfaction of certain additional conditions, including, among other things, (i) no Assure material adverse effect, (ii) Assure having performed its obligations under the agreement governing the sale transaction, (iii) Assure completing a wind down of its business, (iv) the reverse split having been consummated, and (v) Assure having a maximum amount of $500,000 in retained liabilities.

Management has evaluated subsequent events through April 24, 2024, the date the consolidated financial statements were available to be issued.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2024** | **December 31,**<br>**2023** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $40106 | $50563 |
| &nbsp;&nbsp;&nbsp;Accounts receivables | 97880 | 73782 |
| &nbsp;&nbsp;&nbsp;Inventories | 48479 | 43741 |
| &nbsp;&nbsp;&nbsp;Due from related parties | - | 67793 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 186465 | 235878 |
| Intangible assets under development | 1003240 | 991736 |
| Goodwill | 740207 | 740207 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1929912 | $1967821 |
| **LIABILITIES AND MEMBERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $281645 | $294130 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 240830 | 241726 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 895808 | 663114 |
| &nbsp;&nbsp;&nbsp;Note payable | 1300000 | 1300000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 2718283 | 2498970 |
| Commitments and contingencies |  |  |
| Members' equity (deficit): |  |  |
| &nbsp;&nbsp;&nbsp;Members' capital | 1878 | 1878 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (790249) | (533027) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total members' equity (deficit) | (788371) | (531149) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' equity (deficit) | $1929912 | $1967821 |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2024** | **2023** |
| Net sales | $168510 | $- |
| Cost of sales | 127489 | - |
| &nbsp;&nbsp;&nbsp;Gross profit | 41021 |  |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 298243 | 3600 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 298243 | 3600 |
| Loss from operations | (257222) | (3600) |
| Net loss | $(257222) | $(3600) |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY**

---

| | | | |
|:---|:---|:---|:---|
|  | **Members'**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total Members'**<br>**Deficit** |
| **Balances at December 31, 2022** | $- | $(15428) | $(15428) |
| &nbsp;&nbsp;&nbsp;Net loss | - | (3600) | (3600) |
| **Balances at March 31, 2023** | $- | $(19028) | $(19028) |
| **Balances at December 31, 2023** | $1878 | $(533027) | $(531149) |
| &nbsp;&nbsp;&nbsp;Net loss | - | (257222) | (257222) |
| **Balances at March 31, 2024** | $1878 | $(790249) | $(788371) |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2024** | **2023** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(257222) | $(3600) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (24098) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (4738) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (11855) | 4650 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | (896) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from / to related parties | 300487 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 1677 | 1050 |
| **Cash flows from investing activities:** |  |  |
| Payments made for intangible assets under development | (12134) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (12134) |  |
| **Net change in cash and cash equivalents** | (10457) | 1050 |
| Cash and cash equivalents at beginning of period | 50563 | - |
| Cash and cash equivalents at end of period | $40106 | $1050 |

---

The accompanying notes are an integral part of these financial statements.

**WOOD SAGE, LLC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1. Organization and Summary of Significant Accounting Policies**

Wood Sage, LLC ("Wood Sage", the "Company") was formed as a limited liability company on June 26, 2014, when the Company's Articles of Organization became effective upon filing with the Florida Department of State, Division of Corporations (the "DOC").

The Company's headquarters are in Tampa, Florida. Its fiscal year ends on December 31.

*Acquisitions of CSP and APS*

On January 20, 2023, Wood Sage, LLC ("Wood Sage"), Community Specialty Pharmacy, LLC, a Florida limited liability company ("CSP"), and TRxADE HEALTH, Inc., a Delaware corporation("TRxADE") entered into a Membership Interest Purchase Agreement (the "CSP MIPA"), pursuant to which TRxADE sold and Wood Sage acquired one hundred percent (100%) of the membership interest it owns in CSP in exchange for (i) One Hundred Thousand Dollars ($100,000) and (ii) all amounts due and payable to TRxADE from Wood Sage under the Master Service Agreement (defined below). In January 2023, Danam and CSP entered into an Amendment to the CSP MIPA, pursuant to which the parties revised the Closing Payment to One Hundred Thousand Dollars ($100,000) plus any amounts owed under the Management Services Agreement (as defined in the CSP MIPA).

On January 20, 2023, Wood Sage, Alliance Pharma Solutions, LLC, a Florida limited liability company ("APS"), and TRxADE entered into a Membership Interest Purchase Agreement (the "APS MIPA"), pursuant to which TRxADE sold and Wood Sage acquired one hundred percent (100%) of the membership interest it owns in APS in exchange for (i) One Hundred Twenty Five Thousand Dollars ($125,000) and (ii) all amounts due and payable to TRxADE from Wood Sage under the Master Service Agreement. In January 2023, Danam and APS entered into an Amendment to the APS MIPA (the "APS MIPA Amendment"), pursuant to which the parties revised the Closing Payment to One Million Two Hundred Thousand Dollars ($1,200,000) plus any amounts owed under the Management Service Agreement (as defined in the APS MIPA).

On May 22, 2023, Wood Sage entered into a non-interest bearing promissory note ("Note") with Integral (the successor in interest to TRxADE, "Integral"), which is owned by Suren Ajjarapu and Prashant Patel, to satisfy the purchase price under the CSP MIPA. Upon the satisfaction of all closing conditions, the CSP MIPA closed in August 2023 (see below).

On August 22, 2023, Wood Sage entered into a non-interest bearing promissory note ("Note") with Integral Health pursuant to which Integral made a certain loan to Wood Sage in the amount of $1,300,000 to satisfy the purchase price under the CSP MIPA and APS MIPA. No later than 30 days after a change in control to Wood Sage, the aggregate unpaid principal balance of the Note will be due and payable by

Wood Sage.

APS (d.b.a. DelivMeds) is developing a same day Pharma delivery software — Delivmeds.com and invested in SyncHealth MSO, LLC a managed services organization in January 2019, which investment was divested in February 2020. CSP is an accredited independent retail pharmacy with a focus on specialty medications and a community-based model offering home delivery services to patients.

**Acquisition of membership interests by Danam Health, Inc.**

In January 2023, Danam entered into a Membership Interest Purchase Agreement (the "Wood Sage MIPA") with Nikul Panchal, an individual resident of the State of Florida ("Seller"). The Seller owns all of the membership interest in Wood Sage, LLC, a Florida limited liability company (the "Company"). Upon the closing of the transaction contemplated in the Wood Sage MIPA, Seller will own one hundred percent (100%) of the membership interests in Community Specialty Pharmacy, LLC ("CSP") and Alliance Pharma Solutions, LLC ("APS") which the Seller will sell and Danam will acquire in exchange for (i) Four Hundred Thousand Dollars ($400,000) and (ii) all amounts due and payable to Seller from Danam under the Management Agreement, (the "Closing Payment").

In January 2023, the parties above entered into an Amendment to the Wood Sage MIPA, pursuant to which the parties revised the Closing Payment to Four Hundred Thousand Dollars ($400,000) plus any amounts owed under the Management Services Agreement (as defined in the Wood Sage MIPA).

In April 2023, the parties above entered into an Amendment to the Wood Sage MIPA, pursuant to which the parties revised the closing of the said agreement from April 30, 2023, to September 30, 2024. Upon the closure of the said transaction, Danam will own 100% of the membership interests in the Company as a part of Business combination (Refer Note 8 — Subsequent Events).

**Basis of Presentation and Principles of Consolidation**

The Company's fiscal year ends on December 31.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").

The consolidated financial statements include the accounts of Wood Sage, APS and CSP since their respective acquisitions on August 22, 2023. All inter-company balances and transactions are eliminated on consolidation.

**Liquidity**

Historically, operations have been funded primarily positive operating cash flows, debt financing and capital contributions from its members. The Company has the ability to maintain the current level of spending or reduce expenditure to maintain operations.

**Reclassifications**

Certain prior year amounts have been reclassified to conform to the current year presentation.

**Use of Estimates**

The preparation of the Company's Consolidated Financial Statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the Consolidated Financial Statements. These estimates are based on information available through the date of the issuance of the Consolidated Financial Statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

● provisions for income taxes and related valuation allowances and tax uncertainties;

● recoverability of long-lived assets and their related estimated lives;

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**Inventories**

Inventories are stated at the lower of cost and net realizable value. Cost is determined on a first in first out basis. On a quarterly basis, we evaluate inventory for net realizable value using estimates based on historical experience, current or projected pricing trends, specific categories of inventory, age and expiration dates of on-hand inventory and manufacturer return policies. If actual conditions are less favorable than our assumptions, additional inventory write downs may be required, and no reserve is maintained as obsolete or expired inventories are written off. We believe that the inventory valuation provides a reasonable approximation of the current value of inventory. There is no reserve for inventory obsolescence and inventory is not pledged during the periods presented.

**Accounts Receivable**

The Company's receivables are from customers and are collectible within 90 days. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence.

**Intangible Assets under Development**

Research expenditure is recognized as an expense and Development expenditure that meets specified criteria is recognized as the cost of an intangible asset. The company has begun capitalizing the expenses related to the app DelivMeds as the management has determined that the Company's app has crossed the research phase and has begun development.

**Comprehensive Income (Loss)**

Comprehensive income (loss) includes net income (loss) as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income (loss) and comprehensive income (loss) presented in the consolidated financial statements for the periods ended December 31, 2023, and December 31, 2022.

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

---

| | |
|:---|:---|
| Level 1 | Quoted prices are available in active markets for identical assets or liabilities. |
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| Level 3 | Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. |

---

The carrying amounts of cash, accounts receivable, inventories and accounts payable approximate fair value because of the short-term nature of these instruments. The company does not have any long-term debt.

**Revenue Recognition**

The Company adopted Accounting Standards Codification ("ASC") 606 on January 1, 2020, the new accounting guidance on revenue recognition. The Company is in the retail pharmacy business. and fills prescriptions for drugs written by a doctor and recognizes revenue at the time the patient confirms delivery of the prescription. Customer returns are not material. The following are the steps taken to recognize revenue.

Step One: Identify the contract with the customer — The prescription is written by a doctor for a customer and delivered to the Company. The prescription identifies the performance obligations in the contract. The Company fills the prescription and delivers to the Customer the prescription, fulfilling the contract. The collection is probable because there is confirmation that the customer has insurance for the reimbursement to the Company prior to filling of the prescription.

Step Two: Identify the performance obligations in the contract — Each prescription is distinct to the Customer.

Step Three: Determine the transaction price — The consideration is not variable. The transaction price is determined to be the price of the prescription at the time of delivery which considers the expected reimbursements from third party payors (e.g., pharmacy benefit managers, insurance companies and government agencies).

Step Four: Allocate the transaction price — The price of the prescription invoiced represents the expected amount of reimbursement from third party payors. There is no difference between contract price and "stand-alone selling price".

Step Five: Recognize revenue when or as the entity satisfies a performance obligation — Revenue is recognized upon the delivery of the prescription.

**Business Combinations**

The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

**Goodwill**

Goodwill is an asset representing the excess cost over the fair market value of net assets acquired in business combinations. In accordance with Intangibles — Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis when indicators of potential impairment exist. Goodwill is tested for impairment at the reporting unit level. The Company's reporting of discrete financial information is available and management regularly reviews the operating results. For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the reporting structure.

The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

The Company also has the option to proceed directly to the quantitative test. Under the quantitative impairment test, the estimated fair value of each reporting unit is compared to its carrying value, including goodwill. If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated to that reporting unit. Management can resume the qualitative assessment in any subsequent period for any reporting unit.

For 2023, management performed a qualitative impairment assessment of our reporting units, of which there were no indications that it was more likely than not that the fair value of our reporting units was less than their respective carrying values. As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized in 2023.

**Concentration of Credit Risks and Major Customers**

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corp limits. During the years ended December 31, 2023 and 2022, no sales to customers represented greater than 10% of revenue.

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits.

**Recent Accounting Pronouncements**

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these consolidated financial statements. The pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**Accounting Pronouncements Recently Adopted**

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (ASC 326), which provides guidance on measurement of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to U.S. GAAP that is based on expected losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023, the company determined that the update applied to trade receivables, but there is no material impact to the consolidated financial statements from the adoption of ASU 2016-13.

**Accounting Pronouncements Not Yet Adopted**

In February 2016, the FASB issued ASU No. 2016-02, Leases, to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of- use asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related right-of-use asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The Company plans to adopt this new guidance when it acquires any new leases.

**Note 2. Going Concern**

The Company has a net loss of $517,599 for the year ended December 31, 2023 and members' deficit of $531,149 as of December 31, 2023. The Company's situation raises a substantial doubt on whether the entity can continue as a going concern in the next twelve months.

The Company's ability to continue as a going concern in the next twelve months following the date the consolidated financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results.

Management has evaluated these conditions and plans to generate revenues and raise capital as needed to satisfy its capital needs. During the next twelve months, the Company intends to fund its operations through debt and/or equity financing.

There are no assurances that management will be able to raise capital on terms acceptable to the Company. If it is unable to obtain sufficient amount of additional capital, it may be required to reduce the scope of its planned development, which could harm its business, financial condition, and operating results. The accompanying consolidated financial statements do not include any adjustments that might result from these uncertainties.

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

**Note 3. Business Combinations**

The Company evaluated the acquisitions of APS and CSP pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition.

The Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation:

---

| | | | |
|:---|:---|:---|:---|
|  | **APS** | **CSP** | **Total** |
| Cash and cash equivalents | $1050 | $62253 | $63303 |
| Accounts receivables |  | 43023 | 43023 |
| Inventories |  | 71728 | 71728 |
| Prepaid expenses and other assets |  | 465 | 465 |
| Intangible assets under development | 858498 |  | 858498 |
| Goodwill | 404765 | 335443 | 740207 |
| Accounts payable | (64313) | (192142) | (256455) |
| Other current liabilities | - | (220770) | (220770) |
| Purchase price consideration | $1200000 | $100000 | $1300000 |

---

Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes. The results of APS and CSP have been included in the consolidated financial statements since the date of acquisition.

*Unaudited Pro Forma Financial Information*

The following unaudited pro forma financial information presents the Company's financial results as if the APS and CSP acquisitions had occurred as of January 1, 2022. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company's future financial results. The unaudited pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Net sales | $1189617 | $889379 |
| Net loss | $(1054916) | $(515953) |

---

**Note 4. Intangible Assets under Development**

Intangible assets under development of the company consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Internal development cost - Delivmeds | $991736 | $- |

---

**Note 5. Note Payable**

On August 22, 2023, Wood Sage entered into a non-interest bearing promissory note ("Note") with Integral Health pursuant to which Integral made a certain loan to Wood Sage in the amount of $1,300,000 to satisfy the purchase price under the CSP MIPA and APS MIPA. No later than 30 days after a change in control to Wood Sage, the aggregate unpaid principal balance of the Note will be due and payable by Wood Sage. As of the date of these consolidated financial statements, the Note was still outstanding.

**Note 6. Related Party Transactions**

As of December 31, 2023, the Company's subsidiaries had $663,114 in amounts due to TRxADE, the Seller. The advances are unsecured, non-interest bearing and due on demand.

As of December 31, 2023, CSP had $67,793 in amounts due from Danam. The advances are unsecured, non-interest bearing and due on demand.

**Note 7. Accrued Expenses**

Accrued Expenses consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Accrued salaries and wages | $234526 | $- |
| Accrued professional fees | 7200 | - |
|  | $241726 | $- |

---

**Note 8. Commitments and Contingencies**

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 9. Subsequent Events**

**Acquisition of membership interests in Wood Sage, LLC**

On June 16, 2024, Danam and the Company amended and restated the Wood Sage MIPA and closed on Danam's acquisition of the Company. The amended and restated Wood Sage MIPA whereby the parties revised the closing payment to be made by Danam to Mr. Panchal to be 0.389 shares of Danam Common Stock. The shares issued by Danam to Mr. Panchal were meant to approximate total cash compensation of $400,000 with a 20% discount. As a result, Danam acquired all issued and outstanding interests in the Company as of June 16, 2024.

**Membership Interest Purchase Agreement — Danam Health, Inc. and Wellgistics, LLC**

On May 11, 2023, Danam entered into a membership interest purchase agreement (the "Wellgistics MIPA") with Wellgistics, LLC ("Wellgistics"), Strategix, Nomad Capital, LLC, and Jouska Holdings LLC (each, a "Seller" and collectively, "Sellers"). Upon the closing of the transaction contemplated in the Wellgistics MIPA, Sellers will sell, and Danam will acquire, all outstanding membership interests of Wellgistics.

The Parties amended the Wellgistics MIPA on August 04, 2023, extending the last day by which the Purchase Agreement ("Amendment") could be consummated to December 26, 2023, and the Parties desire to amend the Purchase Agreement and Amendment to modify such date;

The Parties amended the Wellgistics MIPA on December 26, 2023, extending the last day by which the Purchase Agreement ("Second Amendment") could be consummated to March 29, 2024, and the Parties desire to amend the Purchase Agreement and Amendment to modify such date;

The Parties further amended the Wellgistics MIPA on March 22, 2024, to clarify the language and extend certain deadlines related to Earn-Out Payments and Bonus Payments. Additionally, it has been agreed unilaterally by the Sellers in the event that this Agreement fails to close by August 31, 2024, Danam may but is not required to pay Seller a non-refundable sum of One Hundred Fifty Thousand Dollars ($150,000.00) ("Extension Fee") which shall automatically extend the Closing deadline by thirty (30) days. Buyer may pay the Extension Fee no more than three (3) times for a total of no more than a ninety (90) day extension. The Extension Fee is Non-Refundable under any circumstances. The Extension Fee shall be applied to and reduce the cash payable to Sellers at Close if the sale is completed.

**Merger Agreement — Danam Health, Inc. and Assure Holdings, Corp.**

On February 12, 2024, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Assure Holdings, Corp. ("Assure") and Assure Merger Corp., a newly formed wholly-owned subsidiary of Assure ("Assure Merger"). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the stockholders of Assure and Danam, Assure Merger would have been merged with and into Danam (the "Merger"), with Danam surviving the Merger as a wholly-owned subsidiary of Assure.

On April 8, 2024, Assure made a convertible promissory note in the principal amount of $1,000,000 in favor of Danam (the "Promissory Note"). The note bears interest at 10% per annum and matures on July 22, 2024. The note is convertible upon a financing event or upon a sale transaction.

On June 13, 2024, Danam terminated the Merger Agreement and Danam management is considering the exercise of its rights under the Merger Agreement, including, but not limited to, accelerating the maturity date of the Promissory Note, seeking payment of $1,000,000 in termination fees, and any other remedies available pursuant to the Merger Agreement or in law.

Management has evaluated subsequent events through July 3, 2024, the date the financial statements were available to be issued.

**Report of Independent Registered Public Accounting Firm**

To the members of Wellgistics, LLC.

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of Wellgistics, LLC and the Subsidiary (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), consolidated statements of members' equity and consolidated statements of cash Flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with Generally Accepted Accounting Principles of United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have nor we have engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matter**

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) relate to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

**/s/ Suri & Co., Chartered Accountants**

We have served as the Company's auditors since 2021.

Date: 24<sup>th</sup> April 2024

Place: Chennai, India

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1795164 | $4234630 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 1309397 | 721710 |
| &nbsp;&nbsp;&nbsp;Inventories | 6731577 | 8391850 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 557947 | 112284 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 10394085 | 13460474 |
| Property, plant and equipment, net | 549691 | 3519237 |
| Operating lease, right of use asset | 1402596 | 2036682 |
| Goodwill | 872433 | 872433 |
| Investments in unconsolidated entity | 17671 | 100000 |
| Note receivable | 139770 | 276439 |
| Other assets | 24249 | 41015 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $13400495 | $20306280 |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $3310333 | $2785510 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 994587 | 252275 |
| &nbsp;&nbsp;&nbsp;Current portion of debt obligations | 5180995 | 5233289 |
| &nbsp;&nbsp;&nbsp;Operating – lease liability | 426588 | 524241 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 9912503 | 8795315 |
| Long term debt | 136913 | 2713109 |
| Operating lease liability | 1029864 | 1558915 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 11079281 | 13067339 |
| Commitments and contingencies |  |  |
| Members' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Members' capital | 1272838 | 1272838 |
| &nbsp;&nbsp;&nbsp;Members' distribution | (32244742) | (31817767) |
| &nbsp;&nbsp;&nbsp;Retained earnings | 33293118 | 37783870 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total members' equity | 2321214 | 7238941 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' equity | $13400495 | $20306280 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED Statements of Operations and Comprehensive Income (Loss)**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Net sales | $33182749 | $31888349 |
| Cost of sales | 30519683 | 26162860 |
| &nbsp;&nbsp;&nbsp;Gross profit | 2663066 | 5725489 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expense | 6612049 | 6540583 |
| &nbsp;&nbsp;&nbsp;Depreciation | 276376 | 380284 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 6888425 | 6920867 |
| Loss from operations | (4225359) | (1195378) |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (363525) | (287183) |
| &nbsp;&nbsp;&nbsp;Loss from unconsolidated affiliated | (82329) | (51942) |
| &nbsp;&nbsp;&nbsp;Other income | 180461 |  |
| &nbsp;&nbsp;&nbsp;Gain on legal settlement | - | 1818054 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | (265393) | 1478929 |
| Net income (loss) | $(4490752) | $283551 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED Statements of Members' Equity**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Members'**<br>**capital** | **Members'**<br>**distribution** | **Retained**<br>**earnings** | **Total members'**<br>**equity** |
| **Balances at December 31, 2021** | $1272838 | $(30102760) | $37500319 | $8670397 |
| Distributions to member |  | (1715007) |  | (1715007) |
| Net loss | - | - | 283551 | 283551 |
| **Balances at December 31, 2022** | 1272838 | (31817767) | 37783870 | 7238941 |
| Distributions to member |  | (426975) |  | (426975) |
| Net loss | - | - | (4490752) | (4490752) |
| **Balances at December 31, 2023** | $1272838 | $(32244742) | $33293118 | $2321214 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED Statements of Cash Flows**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(4490752) | $283551 |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 276376 | 380284 |
| &nbsp;&nbsp;&nbsp;Bad debt | 700612 | 298750 |
| &nbsp;&nbsp;&nbsp;Loss from unconsolidated affiliate | 82329 | 51942 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1071047) | (366324) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 1660273 | (1822193) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (445663) | 580334 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 16766 | (12624) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 547012 | 1055524 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 742312 | (173806) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability, net | 7382 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities | (1974401) | 275438 |
| **Cash flows from investing activities:** |  |  |
| Incremental investment in unconsolidated entities |  | (51162) |
| Purchases of property, plant and equipment | (9432) | (297009) |
| Net cash acquired from business combination | - | 220855 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (9432) | (127316) |
| **Cash flows from financing activities:** |  |  |
| Payments on term loan and notes payable | (429914) | (680127) |
| Proceeds from revolving credit facility |  | 4745531 |
| Repayments on revolving credit facility |  | (5027556) |
| Distributions to members | (25720) | (1715007) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (455634) | (2677159) |
| **Net increase in cash and cash equivalents** | (2439467) | (2529037) |
| Cash and cash equivalents at beginning of year | 4234630 | 6763667 |
| Cash and cash equivalents at end of year | $1795163 | $4234630 |
| **Supplemental cash flow information:** |  |  |
| Cash paid for interest | $420120 | $287322 |
| **Supplemental non-cash investing and financing activities:** |  |  |
| Loan transferred during sale of interest in subsidiary | $2301347 | $- |
| Asset transferred during sale of interest in subsidiary | $2702602 | $- |
| Distribution to member during sale of interest in subsidiary | $401255 | $- |
| Promissory notes assumed to acquire business | $- | $1500000 |
| Shares received as consideration for disposal of a business | $- | $100000 |
| Notes issued as consideration for disposal of assets | $- | $641000 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1 Organization and Summary of Significant Accounting Policies**

**Nature of Operations**

Wellgistics, LLC ("Wellgistics", the "Company") was organized in 2013 as a limited liability company. Wellgistics is a pharmaceutical company that retails generic and specialty drugs to pharmacies. In 2017, the Company was sold to Strategix Global, LLC (Strategix). On May 1, 2019, Pharm Donkey, LLC (Pharm Donkey) acquired a 20% ownership interest in the Company. Strategix Global, LLC owned the remaining 80% when the transaction occurred. On July 25, 2020, Strategix Global, LLC, purchased the remaining 20% back from Pharm Donkey. As part of the purchase, Wellgistics assigned $2,500,000 of notes receivable to Pharm Donkey.

During 2021 Strategix sold 20% of its interest in Wellgistics to Nomad Capital LLC. Later during May 2022, the ownership agreement was amended, and the ownership was changed to Strategix Global, LLC holding 65%; Nomad Capital LLC holds 20% and the remaining 15% is held by Jouska Holdings LLC.

Later effective from June 2023, the ownership agreement was amended, and the ownership was changed to Strategix Global, LLC holding 60%; Nomad Capital LLC holds 20% and the remaining 20% is held by Jouska Holdings LLC.

**Membership Interest Purchase Agreement — Danam Health, Inc. and Wellgistics, LLC**

On May 11, 2023, Danam entered into a membership interest purchase agreement (the "Wellgistics MIPA") with Wellgistics, LLC ("Wellgistics"), Strategix, Nomad Capital, LLC , and Jouska Holdings LLC (each, a "Seller" and collectively, "Sellers"). Upon the closing of the transaction contemplated in the Wellgistics MIPA, Sellers will sell and Danam will acquire all of the outstanding membership interests of Wellgistics as a part of the business combination.

The Parties amended the Wellgistics MIPA on August 04, 2023 extending the last day by which the Purchase Agreement ("Amendment") could be consummated to December 26, 2023 and the Parties desire to amend the Purchase Agreement and Amendment to modify such date;

The Parties amended the Wellgistics MIPA on December 26, 2023 extending the last day by which the Purchase Agreement ("Second Amendment") could be consummated to March 29, 2024 and the Parties desire to amend the Purchase Agreement and Amendment to modify such date. (Refer Note 13 – Subsequent Events – Membership Interest Purchase Agreement – Danam Health, Inc. and Wellgistics, LLC).

**Basis of Presentation and Principles of Consolidation**

The Company's fiscal year ends on December 31.

The accompanying consolidated financial statements for the period ending December 31, 2023 have been prepared in accordance with accounting principles generally accepted in the United States ("U.S.GAAP").

The consolidated financial statements include the accounts of Wellgistics and Norton Aviation LLC the subsidiary it controls. All inter-company balances and transactions are eliminated on consolidation. During the year ended December 31, 2023, the control in the subsidiary has been derecognized as the 100% membership interest has been distributed to its owners.

**Use of Estimates**

The preparation of the Company's consolidated financial statements in conformity with U.S.GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the consolidated financial statements. These estimates are based on information available through the date of the issuance of the consolidated financial statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

● fair value of long-term debt and notes receivable;

● evaluation of goodwill for impairment

● recoverability of long-lived assets and their related estimated lives;

● accruals for estimated liabilities such as property tax accruals and litigation settlement accrual;

● evaluation of equity method investments for impairment; and

**Liquidity**

Historically, operations have been funded primarily positive operating cash flows, debt financing and capital contributions from its members. The Company has the ability to maintain the current level of spending or reduce expenditure to maintain operations.

**Reclassification**

Certain prior period amounts have been reclassified to conform to the current period presentation.

**Comprehensive Income (Loss)**

Comprehensive income (loss) includes net income (loss) as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income and comprehensive income (loss) presented in the consolidated financial statements for the years ended December 31, 2023 and 2022.

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**Accounts Receivable, Net**

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are due from various customers and are shown net of applicable reserves for doubtful accounts as shown on the face of the balance sheet. There were no accounts that had been placed on non-accrual status. The allowance for doubtful accounts has been estimated by management based on historical experience, current market trends and, for larger customer accounts, their assessment of the ability of the customers to pay outstanding balances. Past due balances and other higher risk amounts are reviewed individually for collectability. Changes in circumstances relating to the collectability of accounts receivable may result in the need to increase or decrease the allowance for doubtful accounts in the future.

The company provides for 95% of the accounts receivable which are due over the period of 90 days. The Company recognized bad debt expense of $700,612 and $298,750 within general and administrative expenses for the years ended December 31, 2023 and 2022, respectively.

**Inventories, Net**

Inventory is stated at lower of cost, determined on a first in first out basis ("FIFO"), and net realizable value. Production costs are comprised of direct material and labor and applicable manufacturing overhead. The Company records an inventory reserve for losses associated with excess and obsolete items, which is estimated based on the Company's current knowledge with respect to inventory levels, planned production, and customer demand. Provisions for excess and obsolete inventory are charged to cost of sales and are permanent reductions to the carrying value of inventory.

**Property, Plant and Equipment, Net**

Property, plant and equipment, net ("PP&E") is stated at cost less accumulated depreciation and amortization and any accumulated impairment losses. Depreciation and amortization are computed using the straight-line method over the assets' estimated useful lives. The estimated useful lives of PP&E are as follows:

---

| | |
|:---|:---|
| Equipment | 5 - 10 years |
| Furniture and Fixtures | 7 years |
| Aircraft and Hangar | 20 years |
| Software | 3 - 5 years |
| Leasehold Improvements | Shorter of the estimate useful life or remaining lease term |

---

Capitalized costs associated with construction in progress are not depreciated until the related assets are placed into service, at which time the capitalized balance will be transferred to the appropriate account of PP&E. Construction in progress is stated at the lower of cost or fair value, which includes the cost of construction and other direct costs attributable to the construction. The costs are capitalized as incurred or as payments are made pursuant to relevant construction contracts.

Major renewals and improvements are capitalized. Replacements, maintenance and repairs, which do not significantly improve or extend the useful life of the assets, are expensed when incurred.

Upon the sale or retirement of assets, costs and the related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in the results of operations.

The Company evaluates its long-lived assets or asset groups for indicators of possible impairment by determining whether there were any triggering events that could impact the Company's assets. If events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable the Company performs a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by such asset or asset group. Should an impairment exist, the impairment loss is measured based on the excess carrying value of the asset over the asset's fair value generally determined by estimates of future discounted cash flows.

The Company has not identified any such Impairment losses for the years ended December 31, 2023 and 2022.

**Business Combination**

The Company accounts for business combinations using the acquisition method of accounting in accordance with *Business Combinations (Topic 805)*, which allocates the fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. We engage third-party appraisal firms when appropriate to assist in the fair value determination of intangible assets. Initial purchase price allocations are subject to revisions within the measurement period, not to exceed one year from the date of acquisition. Acquisition-related expenses and transaction costs associated with business combinations are expensed as incurred.

**Goodwill**

Goodwill is an asset representing the excess cost over the fair market value of net assets acquired in business combinations. In accordance with Intangibles–- Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis when indicators of potential impairment exist. Goodwill is tested for impairment at the reporting unit level. The Company's reporting units discrete financial information is available and management regularly reviews the operating results. For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the reporting structure.

The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

The Company also has the option to proceed directly to the quantitative test. Under the quantitative impairment test, the estimated fair value of each reporting unit is compared to its carrying value, including goodwill. If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated to that reporting unit. Management can resume the qualitative assessment in any subsequent period for any reporting unit.

For the years ended December 31, 2023 and 2022, management performed a qualitative impairment assessment of our reporting units, of which there were no indications that it was more likely than not that the fair value of our reporting units were less than their respective carrying values. As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized in 2023 and 2022.

**Equity method investments**

The Company accounts for non-marketable investments using the equity method of accounting if the investment gives the Company the ability to exercise significant influence over, but not control, of an investee. Significant influence generally exists if the investor has an ownership interest representing between 20% and 50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our proportionate share of earnings or losses and distributions. Accordingly, the company has accounted for its investment in Black Bay LLC ("Black Bay") where it owns 50% of the membership rights under equity method and has accounted for the proportionate share of losses.

**Non-marketable investments**

Non-marketable investments in which the company neither has a control or exercises significant influence are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer or impairment events (referred to as the measurement alternative). All gains and losses on privately held equity securities, realized and unrealized, are recorded through gains (losses) on investment in unconsolidated entities net, in the statement of operations.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

---

| | |
|:---|:---|
| Level 1 | Quoted prices are available in active markets for identical assets or liabilities |
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities |
| Level 3 | Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations |

---

The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate their fair value because of the short-term nature of these instruments. The carrying amount of long-term debt approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar maturities.

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits. The Company's federal and state income tax returns for 2019 through 2023 are subject to examination (generally for the three years after they are filed) by the Internal Revenue Service and other taxing authorities.

*<u>Recent Accounting Pronouncements</u>*

**Accounting Pronouncements Recently Adopted**

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (ASC 326), which provides guidance on measurement of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to U.S.GAAP that is based on expected losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023 the company determined that the update applied to trade receivables, but that there no material impact to the consolidated financial statements from the adoption of ASU 2016-13.

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-2, Leases, to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related right-of-use asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. In March 2019, the FASB issued ASU 2019-01, "Lease (842): Codification improvements." This updated clarified that entities were exempt from disclosing the effect of the change on income from continuing operations, net income, and related per-share amounts, if applicable, for interim periods after the adoption of Accounting Standards Codification ("ASC") 842.

The standard was initially effective for annual and interim reporting periods beginning after December 15, 2019. However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates", which deferred the effective date of ASU 2016-02 by an additional year. At its April 8, 2020, meeting, the FASB voted to defer the effective date for ASC 842 another year. As such, the Company is required to adopt the new leases standard for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

The Company adopted this new guidance effective January 1, 2022. ASC 842 requires a modified retrospective approach to each lease that existed at the date of initial application as well as leases entered into after that date. The Company has elected to report all leases at the beginning of the period of adoption and not restate its comparative periods. Based on the Company's lease portfolio, the Company anticipates recognizing a right-of-use asset and a related lease liability on its balance sheet, with an immaterial impact on the Company's consolidated statement of operations compared to the previous lease accounting guidance.

Practical Expedients Adopted with Topic 842

The Company has elected to adopt the following practical expedients upon the transition date to Topic 842 on January 1, 2022:

● Transitional practical expedients package: An entity may elect to apply the listed practical expedients as a package to all the leases that commenced before the effective date. The practical expedients are:

● The entity need not reassess whether any expired or existing contracts are or contains leases;

● The entity need not reassess the lease classification for expired or existing contracts;

● The entity need not reassess initial direct costs for any existing leases.

Use of portfolio approach: An entity can apply this guidance to a portfolio of leases with similar characteristics if the entity reasonably expects that the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases in that portfolio. This approach can also be applied to other aspects of the lease's guidance for which lessees/lessors need to make judgments and estimates, such as determining the discount rate and determining and reassessing the lease term.

● Short-term lease recognition exemption: Leases with a term of twelve months or less constitute short-term leases and will not be recognized on the balance sheet for all classes of assets. The Company has elected the short-term lease recognition exemption for all classes of assets. The impact of this exemption is that short-term lease cost will be recognized on a straight-line basis over the term.

Lease and non-lease components: As a practical expedient, a lessor may combine lease and non-lease components where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease.

**Revenue Recognition**

Revenue is recognized when control of the promised products or services is transferred to customers, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those products or services. The new standard supersedes U.S.GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the previous standards. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

Effective January 1, 2020, the Company adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers and the related amendments, which are codified into ASC 606, which establishes a broad principle that requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenues, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those products or services. The new standard supersedes U.S.GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the previous standards. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

ASC 606 may be applied either retrospectively or through the use of a modified-retrospective method. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings at the date of initial application. The Company adopted ASC 606 on January 1, 2020, using the modified retrospective method, the impact of which was not material to the Company.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract was determined to be within the scope of ASC 606, the Company assessed the goods or services promised within each contract and determined those that were performance obligations, and assessed whether each promised good or service was distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. The Company recognizes revenue at the point of sale. The majority of orders are placed via the Company's website. Customers generally pay by credit card at the time they place their order. The Company does have larger customers to whom they have extended terms for payment. Generally, payments from these customers are due within 30 days of their order being shipped. However, a few customers have been given terms extending out to 45 days.

The Company recognizes revenue when goods are delivered to the customer. The gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are considered when estimating the impact of these revenue deductions on gross sales for a reporting period. All revenue for the Company is recognized at the point-in-time when delivered to customer based on contractual obligations. Any amount collected from customers for goods not yet delivered is recorded as unearned revenue. The company recognizes a refund liability if it receives consideration from a customer and expects to refund some or all of that consideration to the customer. A refund liability is measured at the amount of consideration received (or receivable) for which the company does not expect to be entitled (that is, amounts not included in the transaction price). The refund liability (and corresponding change in the transaction price and, therefore, the contract liability) is updated at the end of each reporting period for changes in circumstances.

**Concentration of Credit Risks and Major Customers**

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corp limits. During the period ended December 31, 2023, and 2022, no sales to customers represented greater than 10% of revenue.

**Note 3 Accounts Receivable, Net**

Accounts receivable, net consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Billed – Third Party | $1894103 | $976811 |
| Billed – Affiliates | 5513 | 5513 |
| Total Accounts Receivable | 1899615 | 982324 |
| Less: Allowance for doubtful accounts | (590218) | (260614) |
| **Total accounts receivable, net** | $1309397 | $721710 |

---

**Note 4 Inventories, Net**

Inventory consists of stock that was purchased in 2020 from First Defense Nasal Screen Corp ("FDNS"). An ongoing legal dispute between the Company and the supplier has been settled where the Company was awarded $4.6 million. The award has not been accounted for due to the uncertainty of receipt. Following the bankruptcy filing of FDNS the court awarded the complete possession of the inventory to the Company and Vide the United States Bankruptcy Court order dated March 15, 2023, the entity is in receipt of a monthly plan payment of $3,014 for the FDNS from March 2023 which has been included in the Other income in the Statement of Operations and Comprehensive Income (Loss). The Company reserved 50% of the total inventory value of $6.72 million during the year ended December 31, 2021.

Inventory consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Finished goods | $6390049 | $5190108 |
| FDNS | 3369953 | 3369953 |
| Inventory reserve | (3028425) | (168211) |
| Net inventory | $6731577 | $8391850 |

---

**Note 5 Property, Plant and Equipment, Net**

Major classifications of property, plant and equipment consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Aircraft & Hangar | $- | $2995000 |
| Leasehold Improvements | 766467 | 766467 |
| Equipment | 587996 | 366558 |
| Furniture & Fixtures | 152161 | 152161 |
| Software | - | 28098 |
|  | 1506624 | 4308284 |
| Less: Accumulated Depreciation | (956933) | (1008155) |
|  | 549691 | 3300129 |
| Construction in Progress | - | 219108 |
| Property, plant and equipment, net | $549691 | $3519237 |

---

Depreciation expense for the years ended December 31, 2023 and 2022 amounted to $276,376 and $380,284, respectively.

Construction in progress primarily relates to a refrigeration system being constructed in the Company's warehouse, was placed into service in the first half of 2023.

**Note 6 Accrued Expenses and Other Current Liabilities**

Accrued expenses and Other Current Liabilities consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Credit card obligation | $34748 | $108789 |
| Accrued payroll and vacation | 26598 | 54960 |
| Unearned revenue | 55606 | 66749 |
| Accrued interest | 34373 | 7191 |
| Customer deposits | - | 14586 |
| **Total** | $151325 | $252275 |

---

**Note 7 Lease**

The Company elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows companies to carry forward their historical lease classification. The Company made an accounting policy election by class of underlying asset not to recognize the lease liability and related right-of-use asset for leases with a term of one year or less.

The Company has operating leases for administrative offices and warehouse facilities. The leases have remaining lease terms of one year to six years, some of which include options to extend the leases for up to 3 years, and some of which include options to terminate the leases within one year. Options to extend or terminate leases that are considered reasonably certain are included in our determination of the lease term.

The components of lease expense were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2023** | **2022** |
| Operating lease cost | $635384 | $498252 |
| Short-term lease cost | $29779 | $265589 |

---

Supplemental cash flow information related to leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2023** | **2022** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| Operating cash flows for operating leases | $623805 | $440912 |
| Right-of-use assets obtained in exchange for new lease liabilities | $58374 | $2419307 |

---

Supplemental balance sheet information related to leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| **<u>Operating Leases</u>** |  |  |
| Right-of-use assets | $1402596 | $2036682 |
| Short-term lease liabilities | 426588 | 524241 |
| Long-term lease liabilities | 1029864 | 1558915 |
| Total lease liabilities | $1456452 | $2083156 |

---

---

| | | |
|:---|:---|:---|
| Weighted Average Remaining Lease Term | 3.77 | 4.34 |
| Weighted Average Discount Rate | 6.21% | 6.21% |

---

Maturities of lease liabilities were as follows at December 31, 2023:

---

| | |
|:---|:---|
| **December 31, 2023** | |
| 2024 | $500388 |
| 2025 | 375124 |
| 2026 | 329592 |
| 2027 | 337831 |
| Thereafter | 84976 |
| Total Lease Payments | 1627911 |
| Less: Imputed interest | 171459 |
| Total | $1456452 |

---

**Note 8 Debt**

Outstanding debt consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Bank loan | $- | $2294157 |
| New revolving line of credit | 4774780 | 4745531 |
| Seller promissory note | 543128 | 906710 |
| Total debt | 5317908 | 7946398 |
| Less: current portion of debt | (5180995) | (5233289) |
| **Total** | $136913 | $2713109 |

---

**Seller Promissory Note**

In May 2022, the Company entered into a promissory note agreement with the seller of APD in the amount of $1.2 million. The promissory note was part of the consideration to the Seller in connection with the APD acquisition. The promissory note bears interest at a rate of 2% per annum and will Mature on 1 April 2025. Interest expenses related to the promissory note was immaterial for the year ended December 31, 2023. Accrued interest as of December 31, 2023 was immaterial. As of December 31, 2023 the amount outstanding is $543,128.

**Revolving line of credit**

In May 2022 the Company entered into a credit agreement for a new line of credit $5,000,000 replacing the former line of credit. The new line of credit has a variable interest rate of three months US treasury rate plus 2.75% adjusted for minimum and maximum ceiling rates. As of December 31, 2023 and 2022, the interest rate works out to 8.36% and 6.21%. The line of credit is collateralized by Accounts Receivable and Inventory balances. The line of credit is subject to certain specified covenants. The most stringent covenant includes the compliance to certain specified financial ratios. Interest expense related to the line of credit amounted to $420,000 for the year ended December 31, 2023. The outstanding balance on the line of credit as of December 31, 2023 was $4,774,780.

**Paycheck protection program**

In 2020, the Company obtained a $0.8 million, 2-year loan from a regional bank (the "Lender") pursuant to the U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") under Title I of the CARES Act. The loan bears interest at 1.0% per annum and no payments were due for the first six months. In accordance with the applicable provisions of the CARES Act, during 2020, the Company filed its forgiveness application (the "Application") with the Lender. The Company certified in the Application that100% of the loaned funds were utilized to pay for qualified payroll and payroll related costs, and as such, requested that the entire principal balance be forgiven. The forgiveness application was approved by the lender, and the Company's loan was extinguished. During the year ended December 31, 2022, the Company recorded other income of $0.8 million in the consolidated statement of operations.

Maturities of the outstanding debt are as follows:

---

| | |
|:---|:---|
| **Years ending December 31,** | |
| 2024 | $5180995 |
| 2025 | 136913 |
|  | $5317908 |

---

**Note 9 Fair Value of Financial Instruments**

The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate their fair value because of the short-term nature of these instruments. The carrying amount of long-term debt approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar maturities.

**Note 10 Investment in Unconsolidated Affiliates**

The total share of loss for the year ended December 31, 2022 relating to the Black Bay investment was $62,512, however the amount of loss reported in the consolidated statement of operations is limited to the remaining investment the Company has in Black Bay. The unrecognized losses for Black Bay as of December 31, 2022 is $10,570.

The Company has investments in affiliates that are not consolidated. The balances in these investments as of December 31, 2023 and 2022 are summarized below:

---

| | | | |
|:---|:---|:---|:---|
|  | **Black Bay** | **Gift Health** | **Total** |
| **Balance as at December 31, 2021** | $780 | $- | $780 |
| Contribution | 51152 | 100000 | 151152 |
| Share of loss | (51162) | - | 51162 |
| **Balance as at December 31, 2022** |  | 100000 | 100000 |
| Contribution |  |  |  |
| Share of loss | - | (82329) | (82329) |
| **Balance as at December 31, 2023** | $- | $17671 | $17671 |

---

**Note 11 Commitment and Contingencies**

The Company had an interest in a 2019 class action lawsuit relating to an illegal antitrust scheme, which results in one of the Company's vendors conspiring with its competitor to overcharge for its medication. The vendor and its co-conspirators which a settlement, where direct purchasers of the medication was able to file a claim and receive a cash payment. In May 2022, the company successfully file a claim and received $1.8 million in settlement. For the period ending December 31, 2022 $1.8 million is recorded as non-operating income in the consolidated statement of operation under gain on legal settlement.

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable. The Company does not record any anticipated gains relating to its litigation or legal claims. The gains are only recorded upon receipt of the settlement.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 12. Related Party Transactions**

The Company is partly owned by a private equity company, Nomad Capital, which has ownership interest in a few numbers of portfolio companies. The Company has had transactions with some of the affiliated companies of Nomad Capital. The transactions for purchases of pharmaceutical supplies are recorded in cost of sales. The purchases from the affiliated companies are sometimes sold below the value sold to a third party. Operating expenses, which include software expenses and marketing expenses, with affiliated companies are recorded within general and administrative expenses. The Company is charged a managerial service fee by its owners, which is recorded within general and administrative expenses.

The Company had the following related party balances recorded in accounts payable and accounts receivable:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Accounts payable (receivable) from affiliates of Nomad Capital | $2417 | $92157 |
| Accounts receivable from Affiliates of Company | $5514 | $5514 |

---

The Company had the following transactions with related parties:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2023** | **2022** |
| Operating expenses from affiliates of Nomad Capital | $498111 | $466878 |
| Cost of purchases |  | $135493 |
| Less: Discount from affiliates | - | (100061) |
| Purchases from affiliates of Nomad |  | 35432 |
| Management service fee paid to Nomad Capital | $540000 | $105000 |
| Management service fee paid to Strategix |  | $60000 |
| Management service fee paid to BBPR |  | $80000 |

---

**Note 13. Subsequent Events**

**Membership Interest Purchase Agreement — Danam Health, Inc. and Wellgistics, LLC**

The Parties further amended the Wellgistics MIPA on March 22, 2024 to clarify the language and extend certain deadlines related to Earn-Out Payments and Bonus Payments. Additionally, it has been agreed unilaterally by the Sellers in the event that this Agreement fails to close by August 31, 2024, Danam may but is not required to pay Seller a non-refundable sum of One Hundred Fifty Thousand Dollars ($150,000.00) ("Extension Fee") which shall automatically extend the Closing deadline by thirty (30) days. Buyer may pay the Extension Fee no more than three (3) times for a total of no more than a ninety (90) day extension. The Extension Fee is Non-Refundable under any circumstances. The Extension Fee shall be applied to and reduce the cash payable to Sellers at Close if the sale is completed.

**Merger Agreement — Danam Health, Inc. and Assure Holdings, Corp.**

On February 12, 2024, Danam entered into an Agreement and Plan of Merger (the "Merger Agreement") with Assure Holdings, Corp. ("Assure") and Assure Merger Corp., a newly formed wholly-owned subsidiary of Assure ("Assure Merger"). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the stockholders of Assure and Danam, Assure Merger will be merged with and into Danam (the "Merger"), with Danam surviving the Merger as a wholly-owned subsidiary of Assure. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the "Effective Time"): (i) each share of Danam capital stock issued and outstanding immediately prior to the Effective Time shall automatically be converted into and become the right to receive the applicable per share portion of the "merger consideration" as set forth in the allocation statement to be delivered pursuant to the Merger Agreement ("merger consideration" is defined in the Merger Agreement to mean a number of shares of common stock of Assure equal to (a) the quotient obtained by dividing (i) the number of shares of Assure capital stock on a fully diluted basis (the "Assure Fully Diluted Share Number") by (ii) the quotient of (A) the adjusted value of Assure dividend by (B) the sum of the adjusted value of Assure and the adjusted value of Danam, minus (b) the Assure Fully Diluted Share Number minus (c) the number of shares of common stock of Assure the warrants of Danam will become exercisable for upon closing of the Merger); (ii) each outstanding warrant of Danam will be assumed by Assure and become a warrant to purchase an adjusted number of shares of common stock of Assure, at an adjusted exercise price per share but subject to the same terms and conditions as the warrant of Danam.

Following closing of the Merger, the former Assure equity holders immediately before the Merger are expected to own approximately 10% of the outstanding capital stock of the combined company on a fully diluted basis and the equity holders of Danam immediately before the Merger are expected to own approximately 90% of the outstanding capital stock of the combined company on a fully diluted basis.

Upon closing of the Merger, Assure will be renamed Danam Health Holdings Corp. Suren Ajjarapu will serve as Chairman of the Board of Directors and Tim Canning will serve as the Chief Executive Officer of the combined company. The Merger Agreement provides that the Board of Directors of the combined company will be comprised of five members which will be filled upon completion of the Merger to be designated by Danam.

The Merger Agreement contains customary representations, warranties and covenants of Assure and Danam, including covenants relating to the conduct of the business of both Assure and Danam from the date of signing the Merger Agreement through closing of the Merger, obtaining the requisite approval of the stockholders of Assure and Danam and maintain the listing of the common stock of Assure on the NASDAQ Capital Market and applying for the continued listing of Danam after the closing of the Merger on the NASDAQ Capital Market. Under the terms of the Merger Agreement, Assure has also agreed not to solicit from any person an acquisition proposal (as defined in the Merger Agreement) for Assure.

In connection with the Merger, Assure will prepare and file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 that will contain a prospectus and a proxy statement, and will seek the approval of Assure's stockholders with respect to certain actions, including the following (collectively, the "Assure Stockholder Proposals"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Sale transaction (as defined in the Merger Agreement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Merger;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the change of control of Assure resulting from the transactions contemplated by this Agreement pursuant to the rules of NASDAQ;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the post-closing equity plan for Assure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the post-closing board composition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) an amendment to the certificate of incorporation of Assure to effect a reverse stock split; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) an amendment to the certificate of incorporation of Assure to change the name of Assure.

The Board has agreed to recommend the approval of the Assure Stockholder Proposals to the stockholders and to solicit proxies in support of the approval of the Assure Stockholder Proposals at a meeting of the stockholders to be held for that purpose.

The Merger Agreement contains a limited contractual ability for the Board, in accordance with its fiduciary duties to the stockholders, to change its recommendation to the stockholders upon receipt of a superior proposal subject to certain terms and conditions therein, including providing Danam notice of the superior proposal and time to make a counter-proposal to amend the terms of the Merger Agreement.

Under the Merger Agreement, Assure has agreed to maintain certain indemnity rights (including advancing expenses) of the current officers and directors of Assure as they exist in the governing documents of Assure and maintain director and officers insurance for a period of 6 years following the closing of the Merger.

The closing of the Merger is subject to customary closing conditions, including, among other things, (i) the required approval of the stockholders of Assure and Danam, (ii) the accuracy of the representations and warranties of the parties made in the Merger Agreement, subject to materiality qualifiers, (iii) compliance by the parties with their respective covenants under the Merger Agreement, and (iv) the approval of NASDAQ of the continued listing of Danam after the closing of the Merger. Further, closing of the Merger is conditioned on the simultaneous closing of a sale transaction of Assure's assets. The obligation of Assure is conditioned upon Danam completing acquisition transactions as set forth in the Merger Agreement, including completing the acquisitions of (a) all of the membership interests in Wood Sage, LLC, a Florida limited liability company and (b) all of the membership interests in Wellgistics, LLC, set forth in the applicable acquisition transactions agreements, both such acquisition transactions to close prior to or concurrent with the Merger. The obligation of Danam to close the Merger is also subject to satisfaction of certain additional conditions, including, among other things, (i) no Assure material adverse effect, (ii) Assure having performed its obligations under the agreement governing the sale transaction, (iii) Assure completing a wind down of its business, (iv) the reverse split having been consummated, and (v) Assure having a maximum amount of $500,000 in retained liabilities.

Management has evaluated subsequent events through April 24, 2024, the date the consolidated financial statements were available to be issued.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1193272 | $1795164 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 1412033 | 1309397 |
| &nbsp;&nbsp;&nbsp;Inventories | 6235551 | 6731577 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 18125 | 557947 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 8858981 | 10394085 |
| Property, plant and equipment, net | 469383 | 549691 |
| Operating lease, right of use asset | 1287252 | 1402596 |
| Goodwill | 872433 | 872433 |
| Investments in unconsolidated entity | 17671 | 17671 |
| Note receivable | 139770 | 139770 |
| Other assets | 859033 | 24249 |
| &nbsp;&nbsp;&nbsp;Total assets | 12504523 | $13400495 |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $3124103 | $3310333 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 1003414 | 994587 |
| &nbsp;&nbsp;&nbsp;Current portion of debt obligations | 5115929 | 5180995 |
| &nbsp;&nbsp;&nbsp;Operating – lease liability | 342515 | 426588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 9585961 | 9912503 |
| Long term debt |  | 136913 |
| Operating lease liability | 1010905 | 1029864 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 10596866 | 11079281 |
| Commitments and contingencies |  |  |
| Members' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Members' capital | 1272838 | 1272838 |
| &nbsp;&nbsp;&nbsp;Members' distribution | (32244742) | (32244742) |
| &nbsp;&nbsp;&nbsp;Retained earnings | 32879561 | 33293118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total members' equity | 1907657 | 2321214 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' equity | $12504523 | $13400495 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED Statements of Operations and Comprehensive Income (Loss)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,**<br>**2024** | **2023** |
| Net sales | $18007680 | 15698707 |
| Cost of sales | 15829466 | 12613396 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 2178214 | 3085311 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expense | 2764505 | 3328867 |
| &nbsp;&nbsp;&nbsp;Depreciation | 81521 | 139309 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 2846026 | 3468176 |
| Loss from operations | (667812) | (382865) |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (175123) | (173895) |
| &nbsp;&nbsp;&nbsp;Other income | 429378 | 197914 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | 254255 | 24019 |
| Net loss | $(413557) | $(358846) |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED Statements of Members' Equity**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Members'**<br>**Capital** | **Members'**<br>**Distribution** | **Retained**<br>**Earnings** | **Total Members'**<br>**Equity** |
| **Balances at December 31, 2022** | $1272838 | $(31817767) | $37783870 | $7238941 |
| Distributions to members |  | (430082) |  | (430082) |
| Net loss | - | - | (358846) | (358846) |
| **Balances at June 30, 2023** | $1272838 | $(32247849) | $37425024 | $6450013 |
| **Balances at December 31, 2023** | $1272838 | $(32244742) | $33293118 | $2321214 |
| Net loss | - | - | (413557) | (413557) |
| **Balances at June 30, 2024** | $1272838 | $(32244742) | $32879561 | $1907657 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**CONSOLIDATED Statements of Cash Flows**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,**<br>**2024** | **2023** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(413557) | $(358846) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 81521 | 139309 |
| &nbsp;&nbsp;&nbsp;Bad debt | 127211 |  |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (229848) | (311391) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 496026 | (293728) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 539822 | 94477 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (834784) | 4006 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (186230) | (1054959) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 8827 | (95753) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability, net | 12312 | 7152 |
| &nbsp;&nbsp;&nbsp;Net cash used in operating activities | (398700) | (1869733) |
| **Cash flows from investing activities:** |  |  |
| Purchases of property, plant and equipment | (1213) | (9431) |
| &nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1213) | (9431) |
| **Cash flows from financing activities:** |  |  |
| Repayments of term loan and notes payable | (201979) | (161543) |
| Distributions to members | - | (28827) |
| Net cash used in financing activities | (201979) | (190370) |
| **Net change in cash and cash equivalents** | (601892) | (2069534) |
| Cash and cash equivalents at beginning of period | 1795164 | 4234630 |
| Cash and cash equivalents at end of period | $1193272 | $2165096 |
| **Supplemental cash flow information:** |  |  |
| Cash paid for interest | $104035 | $181638 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**WELLGISTICS, LLC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1 Organization and Summary of Significant Accounting Policies**

**Nature of Operations**

Wellgistics, LLC ("Wellgistics", the "Company") was organized in 2013 as a limited liability company. Wellgistics is a pharmaceutical company that retails generic and specialty drugs to pharmacies. In 2017, the Company was sold to Strategix Global, LLC (Strategix). On May 1, 2019, Pharm Donkey, LLC (Pharm Donkey) acquired a 20% ownership interest in the Company. Strategix Global, LLC owned the remaining 80% when the transaction occurred. On July 25, 2020, Strategix Global, LLC, purchased the remaining 20% back from Pharm Donkey. As part of the purchase, Wellgistics assigned $2,500,000 of notes receivable to Pharm Donkey.

During 2021 Strategix sold 20% of its interest in Wellgistics to Nomad Capital LLC. Later during May 2022, the ownership agreement was amended, and the ownership was changed to Strategix Global, LLC holding 65%; Nomad Capital LLC holds 20% and the remaining 15% is held by Jouska Holdings LLC. The equity holders of the Company entered into an agreement with Danam Health, Inc ("Danam") for it to acquire all of the issued and outstanding membership interests. Later effective from June 2023, the ownership agreement was amended, and the ownership was changed to Strategix Global, LLC holding 60%; Nomad Capital LLC holds 20% and the remaining 20% is held by Jouska Holdings LLC.

**Membership Interest Purchase Agreement - Danam Health, Inc. and Wellgistics, LLC**

On May 11, 2023, Danam entered into a membership interest purchase agreement (the "Wellgistics MIPA") with Wellgistics, LLC ("Wellgistics"), Strategix, Nomad Capital, LLC , and Jouska Holdings LLC (each, a "Seller" and collectively, "Sellers"). Upon the closing of the transaction contemplated in the Wellgistics MIPA, Sellers will sell and Danam will acquire all of the outstanding membership interests of Wellgistics as a part of the business combination.

The Parties amended the Wellgistics MIPA on August 4, 2023 extending the last day by which the Purchase Agreement ("Amendment") could be consummated to December 26, 2023 and the Parties desire to amend the Purchase Agreement and Amendment to modify such date;

The Parties amended the Wellgistics MIPA on December 26, 2023 extending the last day by which the Purchase Agreement ("Second Amendment") could be consummated to March 29, 2024 and the Parties desire to amend the Purchase Agreement and Amendment to modify such date

The Parties further amended the Wellgistics MIPA on March 22, 2024 to clarify the language and extend certain deadlines related to Earn-Out Payments and Bonus Payments. Additionally, it has been agreed unilaterally by the Sellers in the event that this Agreement fails to close by August 31, 2024, Danam may but is not required to pay Seller a non-refundable sum of One Hundred Fifty Thousand Dollars ($150,000.00) ("Extension Fee") which shall automatically extend the Closing deadline by thirty (30) days. Buyer may pay the Extension Fee no more than three (3) times for a total of no more than a ninety (90) day extension. The Extension Fee is Non-Refundable under any circumstances. The Extension Fee shall be applied to and reduce the cash payable to Sellers at Close if the sale is completed.

**Basis of Presentation and Principles of Consolidation**

The Company's fiscal year ends on December 31.

The accompanying consolidated financial statements for the six months ended June 30, 2024 have been prepared in accordance with accounting principles generally accepted in the United States ("U.S.GAAP").

The consolidated financial statements include the accounts of Wellgistics and Norton Aviation LLC the subsidiary it controls. All inter-company balances and transactions are eliminated on consolidation. During the year ended December 31, 2023, the control in the subsidiary has been derecognized as the 100% membership interest has been distributed to its owners.

**Unaudited Interim Financial Information**

The unaudited interim financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, within the rules and regulations of the SEC. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the results for the interim periods presented and of the financial condition as of the date of the interim balance sheet. The financial data and the other information disclosed in these notes to the interim financial statements related to the six-month periods are unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year.

**Use of Estimates**

The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the consolidated financial statements. These estimates are based on information available through the date of the issuance of the financial statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

● fair value of long-term debt and notes receivable.

● evaluation of goodwill for impairment

● recoverability of long-lived assets and their related estimated lives.

● accruals for estimated liabilities such as property tax accruals and litigation settlement accrual;

● evaluation of equity method investments for impairment; and

**Liquidity**

Historically, operations have been funded primarily by positive operating cash flows, debt financing and capital contributions from its members. The Company has the ability to maintain the current level of spending or reduce expenditure to maintain operations.

**Reclassification**

Certain prior period amounts have been reclassified to conform to the current period presentation.

**Comprehensive Income (Loss)**

Comprehensive income (loss) includes net income (loss) as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income and comprehensive income (loss) presented in the financial statements for the six months ended June 30, 2024 and 2023.

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**Accounts Receivable, Net** 

Accounts receivables are recorded at the invoiced amount and do not bear interest. Accounts receivables are due from various customers and are shown net of applicable reserves for doubtful accounts as shown on the face of the balance sheet. There were no accounts that had been placed on non-accrual status. The allowance for doubtful accounts has been estimated by management based on historical experience, current market trends and, for larger customer accounts, their assessment of the ability of the customers to pay outstanding balances. Past due balances and other higher risk amounts are reviewed individually for collectability. Changes in circumstances relating to the collectability of accounts receivable may result in the need to increase or decrease the allowance for doubtful accounts in the future.

The company provides for 95% of the accounts receivable which are due over the period of 90 days. The Company recognized bad debt expense of $127,211 and $124,080 within general and administrative expenses for the six months ended June 30, 2024 and 2023, respectively.

**Inventories, Net**

Inventory is stated at lower of cost, determined on a first in first out basis ("FIFO"), and net realizable value. Production costs are comprised of direct material and labor and applicable manufacturing overhead. The Company records an inventory reserve for losses associated with excess and obsolete items, which is estimated based on the Company's current knowledge with respect to inventory levels, planned production, and customer demand. Provisions for excess and obsolete inventory are charged to cost of sales and are permanent reductions to the carrying value of inventory.

**Property, Plant and Equipment, Net**

Property, plant and equipment, net ("PP&E") is stated at cost less accumulated depreciation and amortization and any accumulated impairment losses. Depreciation and amortization are computed using the straight-line method over the assets' estimated useful lives. The estimated useful lives of PP&E are as follows:

Equipment – 5 – 10 years

Furniture and Fixtures – 7 years

Aircraft and Hangar - 20 years

Software – 3 – 5 years

Leasehold improvements – Shorter of the estimate useful life or remaining lease term

Capitalized costs associated with construction in progress are not depreciated until the related assets are placed into service, at which time the capitalized balance will be transferred to the appropriate account of PP&E. Construction in progress is stated at the lower of cost or fair value, which includes the cost of construction and other direct costs attributable to the construction. The costs are capitalized as incurred or as payments are made pursuant to relevant construction contracts.

Major renewals and improvements are capitalized. Replacements, maintenance, and repairs, which do not significantly improve or extend the useful life of the assets, are expensed when incurred.

Upon the sale or retirement of assets, costs and the related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in the results of operations.

The Company evaluates its long-lived assets or asset groups for indicators of possible impairment by determining whether there were any triggering events that could impact the Company's assets. If events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable the Company performs a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by such asset or asset group. Should an impairment exist, the impairment loss is measured based on the excess carrying value of the asset over the asset's fair value generally determined by estimates of future discounted cash flows.

The Company has not identified any such impairment losses for the six months ended June 30, 2024 and 2023.

**Business Combination**

The Company accounts for business combinations using the acquisition method of accounting in accordance with *Business Combinations (Topic 805)*, which allocates the fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. We engage third-party appraisal firms when appropriate to assist in the fair value determination of intangible assets. Initial purchase price allocations are subject to revisions within the measurement period, not to exceed one year from the date of acquisition. Acquisition-related expenses and transaction costs associated with business combinations are expensed as incurred.

**Goodwill**

Goodwill is an asset representing the excess cost over the fair market value of net assets acquired in business combinations. In accordance with Intangibles– Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis when indicators of potential impairment exist. Goodwill is tested for impairment at the reporting unit level. The Company's reporting units discrete financial information is available and management regularly reviews the operating results. For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the reporting structure.

The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments, and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required. The Company also has the option to proceed directly to the quantitative test. Under the quantitative impairment test, the estimated fair value of each reporting unit is compared to its carrying value, including goodwill. If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated to that reporting unit. Management can resume the qualitative assessment in any subsequent period for any reporting unit.

For the six months ended June 30, 2024, and the year ended December 31, 2023, management performed a qualitative impairment assessment of our reporting units, of which there were no indications that it was more likely than not that the fair value of our reporting units were less than their respective carrying values. As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized in June 2024 and December 2023.

**Equity method investments**

The Company accounts for non-marketable investments using the equity method of accounting if the investment gives the Company the ability to exercise significant influence over, but not control, of an investee. Significant influence generally exists if the investor has an ownership interest representing between 20% and 50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our proportionate share of earnings or losses and distributions. Accordingly, the company has accounted for its investment in Black Bay LLC ("Black Bay") where it owns 50% of the membership rights under equity method and has accounted for the proportionate share of losses.

**Non-marketable investments**

Non-marketable investments in which the company neither has a control or exercises significant influence are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer or impairment events (referred to as the measurement alternative). All gains and losses on privately held equity securities, realized and unrealized, are recorded through gains (losses) on investment in unconsolidated entities net, in the statement of operations..

F**air Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

---

| | |
|:---|:---|
| Level 1 | Quoted prices are available in active markets for identical assets or liabilities. |
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| Level 3 | Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. |

---

The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate their fair value because of the short-term nature of these instruments. The carrying amount of long-term debt approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar maturities.

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits. The Company's federal and state income tax returns for 2019 through 2023 are subject to examination (generally for the three years after they are filed) by the Internal Revenue Service and other taxing authorities.

**Revenue Recognition**

Revenue is recognized when control of the promised products or services is transferred to customers, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those products or services. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the previous standards. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

Effective January 1, 2020, the Company adopted FASB ASU No. 2014-09, *Revenue from Contracts with Customers* and the related amendments, which are codified into ASC 606, which establishes a broad principle that requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenues, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those products or services. The new standard supersedes U.S.GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the previous standards. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

ASC 606 may be applied either retrospectively or through the use of a modified-retrospective method. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings at the date of initial application. The Company adopted ASC 606 on January 1, 2020, using the modified retrospective method, the impact of which was not material to the Company.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract was determined to be within the scope of ASC 606, the Company assessed the goods or services promised within each contract and determined those that were performance obligations, and assessed whether each promised good or service was distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. The Company recognizes revenue at the point of sale. The majority of orders are placed via the Company's website. Customers generally pay by credit card at the time they place their order. The Company does have larger customers to whom they have extended terms for payment. Generally, payments from these customers are due within 30 days of their order being shipped. However, a few customers have been given terms extending out to 45 days.

The Company recognizes revenue when goods are delivered to the customer. The gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are considered when estimating the impact of these revenue deductions on gross sales for a reporting period. All revenue for the Company is recognized at the point-in-time when delivered to customer based on contractual obligations. Any amount collected from customers for goods not yet delivered is recorded as unearned revenue. The company recognizes a refund liability if it receives consideration from a customer and expects to refund some or all of that consideration to the customer. A refund liability is measured at the amount of consideration received (or receivable) for which the company does not expect to be entitled (that is, amounts not included in the transaction price). The refund liability (and corresponding change in the transaction price and, therefore, the contract liability) is updated at the end of each reporting period for changes in circumstances.

**Concentration of Credit Risks and Major Customers**

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corp limits. During the six months ended June 30, 2024, and 2023, no sales to customers represented greater than 10% of revenue.

**Note 2 Accounts Receivable, Net**

Accounts receivable, net consist of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| Billed – Third Party | $2108672 | $1894103 |
| Billed – Affiliates | - | 5513 |
| Total Accounts Receivable | 2108672 | 1899616 |
| Less: Allowance for doubtful accounts | (696639) | (590219) |
| Total accounts receivable, net | $1412033 | $1309397 |

---

**Note 3 Inventories, Net**

Inventory consists of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| Finished Goods | $4871194 | $6390049 |
| FDNS | 3369954 | 3369954 |
| Inventory Reserve | (2005597) | (3028426) |
| &nbsp;&nbsp;&nbsp;Net Inventory | $6235551 | $6731577 |

---

**Note 4 Property, Plant and Equipment, Net**

Property, plant and equipment consist of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| Leasehold Improvements | $766467 | $766467 |
| Equipment | 589208 | 587996 |
| Furniture & Fixtures | 152161 | 152161 |
| Software | 28098 | - |
|  | 1535934 | 1506624 |
| Less: Accumulated Depreciation | (1066551) | (956933) |
| Property, plant and equipment, net | $469383 | $549691 |

---

Depreciation expense for the six months ended June 30, 2024 and 2023 amounted to $81,521 and $139,309, respectively.

**Note 5 Accrued Expenses and Other Current Liabilities**

Accrued expenses and other current liabilities consist of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| Credit card obligation | $102439 | $34748 |
| Accrued payroll and vacation | 28685 | 26598 |
| Unearned revenue | 500000 | 55606 |
| Accrued interest | 119326 | 34373 |
| Refund liability | 252964 | 843262 |
| Accrued expenses and other liabilities | $1003414 | $994587 |

---

**Note 6 Lease**

The Company elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows companies to carry forward their historical lease classification. The Company made an accounting policy election by class of underlying asset not to recognize the lease liability and related right-of-use asset for leases with a term of one year or less.

The Company has operating leases for administrative offices and warehouse facilities. The leases have remaining lease terms of one year to six years, some of which include options to extend the leases for up to 3 years, and some of which include options to terminate the leases within one year. Options to extend or terminate leases that are considered reasonably certain are included in our determination of the lease term.

In May 2024, the Company entered into a lease agreement for office space in Tampa, Florida. The Company holds a 40% share in this lease, with Danam holding remaining 60%.. As a result, the Company recognized a right-of-use asset and corresponding lease liability of $238,029 calculated using a discount rate of 8.36%. The lease includes a monthly base rent of $18,792. The lease required a security deposit by Wellgistics of $31,871.

Supplemental cash flow information related to leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,**<br>**2024** | **2023** |
| Operating lease cost | $189111 | $317692 |
| Short-term lease cost | $7445 | $7445 |

---

Supplemental balance sheet information related to leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| **<u>Operating Leases</u>** |  |  |
| Right-of-use assets | $1287252 | $1402596 |
| Short-term lease liabilities | 342515 | 426588 |
| Long-term lease liabilities | 1010905 | 1029864 |
| &nbsp;&nbsp;&nbsp;Total lease liabilities | $1353420 | $1456452 |

---

**Note 7 Debt**

Outstanding debt consists of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| New revolving line of credit | $4774780 | $4774780 |
| Seller promissory note | 341149 | 543128 |
| Total debt | 5115929 | 5317908 |
| Less: current portion of debt | (5115929) | (5180995) |
| **Total** | $- | $136913 |

---

Seller Promissory Note

In May 2022, the Company entered into a promissory note agreement with the seller of APD in the amount of $1.2 million. The promissory note was part of the consideration to the Seller in connection with the APD acquisition. The promissory note bears interest at a rate of 2% per annum and will mature on April 1, 2025. Interest expenses related to the promissory note was immaterial for the six ended June 30, 2024. Accrued interest as of June 30, 2024 was immaterial. As of June 30, 2024 the amount outstanding is $341,149.

Revolving line of credit

In May 2022 the Company entered into a credit agreement for a new line of credit $5,000,000 replacing the former line of credit. The new line of credit has a variable interest rate of three months US treasury rate plus 2.75% adjusted for minimum and maximum ceiling rates. As of June 30, 2024 and December 31, 2023, the interest rate works out to 8.36%. The line of credit is collateralized by accounts receivable and inventory balances. The line of credit is subject to certain specified covenants. The most stringent covenant includes the compliance to certain specified financial ratios. Interest expense related to the line of credit amounted to $13,865 for six months ended June 30, 2024. The outstanding balance on the line of credit as of June 30, 2024 was $4,774,780.

**Note 8 Fair Value of Financial Instruments**

The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate their fair value because of the short-term nature of these instruments. The carrying amount of long-term debt approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar maturities.

**Note 9 Investment in Unconsolidated Affiliates**

The Company has investments in affiliates that are not consolidated. As of June 30, 2024 and December 31, 2023, the Company had an investment in Gift Health totaling $17,671.

**Note 10 Commitment and Contingencies**

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable. The Company does not record any anticipated gains relating to its litigation or legal claims. The gains are only recorded upon receipt of the settlement.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 11 Related Party Transactions**

The Company is partly owned by a private equity company, Nomad Capital, which has ownership interest in a few numbers of portfolio companies. The Company has had transactions with some of the affiliated companies of Nomad Capital. The transactions for purchases of pharmaceutical supplies are recorded in cost of sales. The purchases from the affiliated companies are sometimes sold below the value sold to a third party. Operating expenses, which include software expenses and marketing expenses, with affiliated companies are recorded within general and administrative expenses. The Company is charged a managerial service fee by its owners, which is recorded within general and administrative expenses.

The Company had the following related party balances recorded in accounts payable and accounts receivable:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| Accounts payable (receivable) from affiliates of Nomad Capital | $- | $2417 |
| Accounts receivable from affiliates of Company | $- | $5514 |

---

The Company had the following transactions with related parties:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,**<br>**2024** | **2023** |
| Operating expenses from affiliates of Nomad Capital | $237363 | $254852 |
| Management service fee paid to Nomad Capital | $270000 | $270000 |
| Management service fee paid to Strategix | $- | $- |
| Management service fee paid to BBPR | $- | $- |

---

**Note 12. Subsequent Events**

Management has evaluated subsequent events through September 5, 2024, the date the financial statements were available to be issued.

**Community Specialty Pharmacy, LLC**

**Condensed Balance Sheets**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $62253 | $14846 |
| &nbsp;&nbsp;&nbsp;Accounts receivables | 43023 | 21727 |
| &nbsp;&nbsp;&nbsp;Inventories | 71728 | 51136 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 465 | 3287 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $177469 | $90996 |
| **LIABILITIES AND MEMBERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $192143 | $78853 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 220770 | 225978 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 412913 | 304831 |
| Commitments and contingencies |  |  |
| Members' equity (deficit): |  |  |
| &nbsp;&nbsp;&nbsp;Due to parent company | 2280872 | 1799973 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (2516316) | (2013808) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total members' equity (deficit) | (235444) | (213835) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' equity (deficit) | $177469 | $90996 |

---

The accompanying notes are an integral part of these financial statements.

**Community Specialty Pharmacy, LLC**

**Condensed Statements of Operations and Comprehensive Loss**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Period Ended** | **Period Ended** |
|  | **August 21,** | **August 21,** |
|  | **2023** | **2022** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net sales | $850753 | $797704 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of sales | 756575 | 841216 |
| &nbsp;&nbsp;&nbsp;Gross profit (loss) | 94178 | (43512) |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expense | 596686 | 189892 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 596686 | 189892 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (502508) | (233404) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(502508) | $(233404) |

---

The accompanying notes are an integral part of these financial statements.

**Community Specialty Pharmacy, LLC**

**Condensed Statements of Members' Equity**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Due to Parent**<br>**Company** | **Accumulated**<br>**Deficit** | **Total Members'**<br>**Equity (Deficit)** |
| **Balances at December 31, 2021** | $1579974 | $(1539911) | $40063 |
| Capital contributions from parent company | 972466 |  | 972466 |
| Net loss |  | (233404) | (233404) |
| **Balances at August 21, 2022** | $2552440 | $(1773315) | $779125 |
| **Balances at December 31, 2022** | $1799973 | $(2013808) | $(213835) |
| Capital contributions from parent company | 480899 |  | 480899 |
| Net loss |  | (502508) | (502508) |
| **Balances at August 21, 2023** | $2280872 | $(2516316) | $(235444) |

---

The accompanying notes are an integral part of these financial statements.

**Community Specialty Pharmacy, LLC**

**Condensed Statements of Cash Flows**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Period Ended** | **Period Ended** |
|  | **August 21,** | **August 21,** |
|  | **2023** | **2022** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(502508) | $(233404) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivables | (21296) | 72047 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (20592) | (920108) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 2822 | (6008) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 113290 | 27719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | (5208) | 82918 |
| &nbsp;&nbsp;&nbsp;Net cash used in operating activities | (433492) | (976836) |
| **Cash flows from financing activities:** |  |  |
| Capital contributions from parent company | 480899 | 972466 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 480899 | 972466 |
| **Net change in cash and cash equivalents** | 47407 | (4370) |
| Cash and cash equivalents at beginning of period | 14846 | 63719 |
| Cash and cash equivalents at end of period | $62253 | $59349 |

---

The accompanying notes are an integral part of these financial statements.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Note 1 Organization and Summary of Significant Accounting Policies**

**Nature of Operations**

Community Specialty Pharmacy, LLC ("CSP", the "Company") is an accredited independent retail pharmacy with a focus on specialty medications and a community-based model offering home delivery services to patients.

**Basis of Presentation**

The Company's fiscal year ends on December 31, and its fiscal quarters end on March 31, June 30, September 30, and December 31.

The accompanying unaudited condensed financial statements for the period ending 21.08.2023 have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information. Accordingly, these unaudited condensed financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. The unaudited condensed prepared on the same basis as the audited financial statements.

These unaudited condensed financial statements should be read in conjunction with the entity's audited financial statements and notes thereto. In the opinion of management, the unaudited condensed financial statements include all normal and recurring adjustments that are considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. Operating results for the period ended August 21, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 for any other interim period, or for any other future year.

**Use of Estimates**

The preparation of the Company's Financial Statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the Financial Statements. These estimates are based on information available through the date of the issuance of the financial statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

● provisions for income taxes and related valuation allowances and tax uncertainties;

**Liquidity**

Historically, operations have been funded primarily through the infusement of capital by Trxade Health, Inc, the parent company (See Note 4 – Due to Parent Company). The Company has the ability to maintain the current level of spending or reduce expenditures to maintain operations if funding is not available.

**Reclassification**

Certain prior period amounts have been reclassified to conform to the current year presentation.

**Comprehensive Income**

Comprehensive income includes net income as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income and comprehensive income presented in the financial statements for the periods ended August 21, 2023, and 2022.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**Inventories**

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in first out basis. On a quarterly basis, we evaluate inventory for net realizable value using estimates based on historical experience, current or projected pricing trends, specific categories of inventory, age and expiration dates of on-hand inventory and manufacturer return policies. If actual conditions are less favorable than our assumptions, additional inventory write-downs may be required, and no reserve is maintained as obsolete or expired inventories are written off. We believe that the inventory valuation provides a reasonable approximation of the current value of inventory. There is no reserve for inventory obsolescence and inventory is not pledged during the periods presented.

**Accounts Receivable**

The Company's receivables are from customers and are collectible within 90 days. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence.

**Revenue**

The Company adopted Accounting Standards Codification ("ASC") 606 on January 1, 2020, the new accounting guidance on revenue recognition. The Company is in the retail pharmacy business. and fills prescriptions for drugs written by a doctor and recognizes revenue at the time the patient confirms delivery of the prescription. Customer returns are not material. The following are the steps taken to recognize revenue.

Step One: Identify the contract with the customer — The prescription is written by a doctor for a customer and delivered to the Company. The prescription identifies the performance obligations in the contract. The Company fills the prescription and delivers to the Customer the prescription, fulfilling the contract. The collection is probable because there is confirmation that the customer has insurance for the reimbursement to the Company prior to filling of the prescription.

Step Two: Identify the performance obligations in the contract — Each prescription is distinct to the Customer.

Step Three: Determine the transaction price — The consideration is not variable. The transaction price is determined to be the price of the prescription at the time of delivery which considers the expected reimbursements from third party payors (e.g., pharmacy benefit managers, insurance companies and government agencies).

Step Four: Allocate the transaction price — The price of the prescription invoiced represents the expected amount of reimbursement from third party payors. There is no difference between contract price and "stand-alone selling price".

Step Five: Recognize revenue when or as the entity satisfies a performance obligation — Revenue is recognized upon the delivery of the prescription.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Concentration of Credit Risks and Major Customers**

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corp limits. During the periods ended June 30, 2023 and 2022, no sales to customers represented greater than 10% of revenue.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

Level 1 Quoted prices are available in active markets for identical assets or liabilities.

---

| | |
|:---|:---|
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |

---

Level 3 Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations.

The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short term nature of these instruments.

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits.

**Recent Accounting Pronouncements**

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. The pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**Accounting Pronouncements Recently Adopted**

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, a comprehensive new revenue recognition standard that supersedes most existing industry-specific guidance. Accounting Standards Codification ("ASC") 606 creates a framework by which an entity allocates the transaction price to separate performance obligations and recognizes revenue when each performance obligation is satisfied. Under the new standard, entities are required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either "full retrospective" adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up in the earliest period presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up in the current period. In July and December 2016, the FASB issued various additional authoritative guidance for the new revenue recognition standard. The Company adopted ASC 606 on January 1, 2020, using the modified retrospective method, the impact of which was not material to the Company.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Accounting Pronouncements Not Yet Adopted**

In February 2016, the FASB issued ASU No. 2016-02, Leases, to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related right-of-use asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The Company plans to adopt this new guidance when it acquires any new leases.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (ASC 326), which provides guidance on measurement of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to GAAP that is based on expected losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023 the company determined that the update applied to trade receivables, but that there no material impact to the financial statements from the adoption of ASU 2016-13.

**Note 2 Prepaid expenses and other assets**

Prepaid expenses and other assets consist of the following:

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
| Prepaid license and fees | $465 | $3287 |
|  | $465 | $3287 |

---

**Note 3 Other current liabilities**

Other current liabilities consist of the following:

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
| Accrued salaries and wages | $220770 | $225978 |
|  | $220770 | $225978 |

---

**Note 4 Due to Parent Company**

Amounts due to parent company consists of consists of the following:

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
| Expenses reimbursement due | $2280872 | $1799973 |
|  | $2280872 | $1799973 |

---

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Note 5 Commitment and Contingencies**

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 6 Subsequent Events**

On January 2023, CSP and TRxADE HEALTH, Inc., a Delaware corporation ("TRxADE") entered into a Membership Interest Purchase Agreement (the "CSP MIPA"), pursuant to which TRxADE sold and Wood Sage acquired one hundred percent (100%) of the membership interest it owns in CSP in exchange for (i) One Hundred Thousand Dollars ($100,000) and (ii) all amounts due and payable to TRxADE from Wood Sage under the Master Service Agreement (defined below). In January 2023, Danam and CSP entered into an Amendment to the CSP MIPA, pursuant to which the parties revised the Closing Payment to One Hundred Thousand Dollars ($100,000) plus any amounts owed under the Management Services Agreement (as defined in the CSP MIPA).

On August 22, 2023, Wood Sage entered into the Note with Integral, which is owned by Suren Ajjarapu and Prashant Patel, to satisfy the purchase price under the CSP MIPA. Upon the satisfaction of all closing conditions, the CSP MIPA closed in August 2023.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**INDEPENDENT AUDITORS' REPORT**

To the members of Community Specialty Pharmacy, LLC.

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of Community Specialty Pharmacy, LLC. (the "Company") as of December 31, 2022 and 2021, the related statement of operations and comprehensive loss, statements of owner's equity and statements of cash flows for each of the two years in the period ended December 31, 2022, and the related notes collectively referred to as the "Financial Statements". In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with Generally Accepted Accounting Principles of United States of America.

In our report dated May 24th, 2023, we expressed an opinion that the 2022 and 2021 financial statements did not fairly present financial position, results of operations comprehensive loss, and cash flows in conformity with accounting principles generally accepted in the United States of America because of two departures due to which the Financial Statements were materially misstated: the Employee benefit expenses of the company were found to be understated for the years 2022 and 2021 and the Trade Receivables of the company was found to be over-stated for the years 2022 and 2021. As described in Note 2 Restatement of previously issued Financial Statements, the Company restated its 2022 and 2021 financial statements. Accordingly, our present opinion on the 2022 and 2021 financial statements, as presented herein, is different from that expressed in our previous report.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the applicable rules and regulations of the and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have nor we have engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matter**

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) relate to accounts or disclosures that are material to the financial statements and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Suri & Co., Chartered Accountants

We have served as the Company's auditors since 2021.

Date: 29th August 2023

Place: Chennai, India

**COMMUNITY SPECIALTY PHARMACY, LLC**

**BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
|  | **(As Restated)** | **(As Restated)** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| Cash and cash equivalents | $14846 | $63719 |
| Accounts receivable | 21727 | 111760 |
| Inventories | 51136 | 42494 |
| Prepaid expenses and other assets | 3287 | 6682 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | **90996** | **224655** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**90996** | $**224655** |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $78853 | $30083 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 225978 | 154509 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **304831** | **184592** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **304831** | **184592** |
| Commitments and contingencies |  |  |
| **Members' equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to Parent Company | 1799973 | 1579974 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (2013808) | (1539911) |
| &nbsp;&nbsp;&nbsp;**Total Members' equity (deficit)** | **(213835)** | **40063** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and members equity** | $**90996** | $**224655** |

---

The accompanying notes are an integral part of these financial statements.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2021** |
|  | **(As Restated)** | **(As Restated)** |
| **Net sales** | 889379 | 1225152 |
| Cost of sales | 866014 | 1068367 |
| Gross Profit | 23365 | 156785 |
| **Operating expenses:** |  |  |
| General and administrative expenses | 497262 | 546035 |
| Loss from operations | (473897) | (389250) |
| **Net loss** | **(473897)** | **(389250)** |

---

The accompanying notes are an integral part of these financial statements.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**STATEMENTS OF MEMBERS' DEFICIT**

---

| | | | |
|:---|:---|:---|:---|
|  | **Due to Parent**<br>**Company** | **Accumulated**<br>**Deficit** | **Total Members'**<br>**Deficit** |
| **Balance at December 31, 2020** | $**1325731** | $**(1150661)** | $**175070** |
| Capital contributions from parent company | 254243 |  | 254243 |
| Net loss |  | (389250) | (389250) |
| **Balance at December 31, 2021 (As restated)** | $**1579974** | $**(1539911)** | $**40063** |
| Capital contributions from parent company | 219999 |  | 219999 |
| Net loss |  | (473897) | (473897) |
| **Balance at December 31, 2022 (As restated)** | $**1799973** | $**(2013808)** | $**(213835)** |

---

The accompanying notes are an integral part of these financial statements.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
|  | **(As Restated)** | **(As Restated)** |
| **Operating activities:** |  |  |
| Net loss | $(473897) | $(389250) |
| Changes in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 90033 | 80446 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (8641) | (7817) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 3395 | (2692) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 48769 | (100313) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 71469 | 147466 |
| **Net cash used by operating activities** | **(268872)** | **(272160)** |
| **Financing activities:** |  |  |
| Capital contributions from parent company | 219999 | 254243 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 219999 | 254243 |
| Net decrease in cash and cash equivalents | **(48873)** | **(17917)** |
| **Cash and cash equivalents** |  |  |
| Beginning of period | 63719 | 81636 |
| End of period | $14846 | $63719 |

---

The accompanying notes are an integral part of these financial statements.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Note 1 Organization and Summary of Significant Accounting Policies**

**Nature of Operations**

Community Specialty Pharmacy, LLC ("CSP", the "Company") is an accredited independent retail pharmacy with a focus on specialty medications and a community-based model offering home delivery services to patients.

**Basis of Presentation**

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") in all material respects and have been consistently applied in preparing the accompanying financial statements.

**Use of Estimates**

The preparation of the Company's Financial Statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the Financial Statements. These estimates are based on information available through the date of the issuance of the financial statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

● provisions for income taxes and related valuation allowances and tax uncertainties;

● accruals for estimated liabilities such as property tax accruals and; litigation settlement accrual;

**Liquidity**

Historically, operations have been funded primarily through the infusement of capital by Trxade Health, Inc, the Company parent company parent (See Note 6 - Due to Parent Company). The Company has the ability to maintain the current level of spending or reduce expenditures to maintain operations if funding is not available.

**Reclassification**

Certain prior year amounts have been reclassified to conform to the current year presentation.

**Comprehensive Income**

Comprehensive income includes net income as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income and comprehensive income presented in the financial statements for the years ended December 31, 2022, and 2021.

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Inventories**

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in first out basis. On a quarterly basis, we evaluate inventory for net realizable value using estimates based on historical experience, current or projected pricing trends, specific categories of inventory, age and expiration dates of on-hand inventory and manufacturer return policies. If actual conditions are less favorable than our assumptions, additional inventory write-downs may be required, and no reserve is maintained as obsolete or expired inventories are written off. We believe that the inventory valuation provides a reasonable approximation of the current value of inventory. There is no reserve for inventory obsolescence and inventory is not pledged during the periods presented.

**Accounts Receivable**

The Company's receivables are from customers and are collectible within 90 days. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence.

**Revenue**

The Company adopted Accounting Standards Codification ("ASC") 606 on January 1, 2020, the new accounting guidance on revenue recognition. The Company is in the retail pharmacy business. and fills prescriptions for drugs written by a doctor and recognizes revenue at the time the patient confirms delivery of the prescription. Customer returns are not material. The following are the steps taken to recognize revenue.

*Step One:* Identify the contract with the customer - The prescription is written by a doctor for a customer and delivered to the Company. The prescription identifies the performance obligations in the contract. The Company fills the prescription and delivers to the Customer the prescription, fulfilling the contract. The collection is probable because there is confirmation that the customer has insurance for the reimbursement to the Company prior to filling of the prescription.

*Step Two:* Identify the performance obligations in the contract - Each prescription is distinct to the Customer.

*Step Three:* Determine the transaction price - The consideration is not variable. The transaction price is determined to be the price of the prescription at the time of delivery which considers the expected reimbursements from third party payors (e.g., pharmacy benefit managers, insurance companies and government agencies).

*Step Four:* Allocate the transaction price - The price of the prescription invoiced represents the expected amount of reimbursement from third party payors. There is no difference between contract price and "stand-alone selling price".

*Step Five:* Recognize revenue when or as the entity satisfies a performance obligation - Revenue is recognized upon the delivery of the prescription.

**Concentration of Credit Risks and Major Customers**

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corp limits. During the years ended December 31, 2022, no sales to customers represented greater than 10% of revenue.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO FINANCIAL STATEMENTS**

Level 1 Quoted prices are available in active markets for identical assets or liabilities.

---

| | |
|:---|:---|
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |

---

Level 3 Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations.

The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short term nature of these instruments.

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits.

*Recent Accounting Pronouncements*

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. The pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**Accounting Pronouncements Not Yet Adopted**

In February 2016, the FASB issued ASU *No. 2016-02, Leases*, to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related right-of-use asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The Company plans to adopt this new guidance when it acquires any new leases.

In June 2016, the FASB issued ASU *No. 2016-13, Financial Instruments - Credit Losses* (ASC 326), which provides guidance on measurement of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to GAAP that is based on expected losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting this standard, but does not expect the adoption to have a material impact on its Financial Statements.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Note 2 Restatement of previously issued Financial Statements**

The Company's Balance Sheet as of December 31, 2022, and 2021, its Statement of Operations, Statement of Shareholders' Equity, and Statement of Cash Flows for the year ended December 31, 2022 and 2021, and certain related notes, have been restated to correct errors.

*Restatement Background*

During the course of independent audit of the 2022 and 2021 financial statements, the Company's auditor identified errors that resulted in a qualified opinion being issued on the financial statements. The errors identified were determined to be material in the 2022 and 2021 Financial Statements. As a result of these errors, the Company has restated its Financial Statements for the year ended December 31, 2022 and 2021 in accordance with ASC 250, *Accounting Changes and Error Corrections* (the "restated financial statements").

*Description of Errors*

 

The following are the errors in the previously issued 2022 and 2021 Financial Statements:

1) *Trade Receivables:* An error was identified related to the recording of trade receivables as of December 31, 2021. Trade receivables were overstated due to the collectivity of a number of accounts. The error overstated previously reported trade receivables in the December 31, 2021 financials by approximately $114 thousand and understated net loss by approximately the same amount. A similar error was also found in the December 31, 2022 financials relating to trade receivables. The error overstated previously reported trade receivables in the December 31, 2022 financials by approximately $58 thousands and understated net loss by approximately same amount.

2) *General and administration expenses:* An error was identified in general and administrative expenses ("G&A") related to the overstatement of trade receivables described in error 1). The bad debt expenses relating to the trade receivables was not recorded in G&A expense in the statement of operations for the year ended December 31, 2021 and 2022. The error understated previously reported G&A expenses and net loss by approximately $114 thousand, and $58 thousand for the year ended December 31, 2021 and 2022 respectively.

3) *General and administration expenses:* Another error was identified in G&A expenses related to understating employee benefit expenses reported in G&A expenses in the statement of operations for the year ended December 31, 2021 and 2022. The error understated previously reported G&A expenses and net loss by approximately $147 thousand, and $61 thousand for the year ended December 31, 2021 and 2022 respectively. The accumulative error to G&A expenses including the first G&A error detailed in 2) was an understatement of $261 thousand and $118 thousand for the years ended December 31, 2021 and 2022 respectively.

4) *Other current liabilities:* An error was identified in other current liabilities relating to the error described in 3). The error understated previously reported other current liabilities by approximately $147 thousand and $208 thousand as of the ended December 31, 2021 and 2022 respectively.

5) *Revenue:* An error was identified related to revenue for the year ended December 31, 2022. The error relating to the overstatement of trade receivables in the December 31, 2021 financial statements was incorrectly adjusted in the revenue reported in the 2022 financials statements. The error understated previously reported revenue by approximately $114 thousand and overstated net loss by the same amount for the year ended December 31, 2022.

6) *Other income:* An error was identified related to other income for the year ended December 31, 2021 and 2022. The error related to the reporting of operating revenue as non-operating other income. The error overstated previously reported other income and understated revenue by approximately $24 thousand and $25 thousand for the year ended December 31, 2021 and 2022 respectively.

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO FINANCIAL STATEMENTS**

*Description of Restatement Tables*

The following tables present a reconciliation from the figures as previously reported to the as restated amounts for the Company's Balance Sheet, Statement of Operations, Statement of Cash Flows, and Statement of Shareholders' Equity as of and for the years ended December 31, 2022 and 2021. The amounts as previously reported were derived from the Company's previously issued Financial Statements for the year ended December 31, 2022, issued on May 24, 2023 (certain amounts may not add due to rounding):

**Community Specialty Pharmacy, LLC**

**Statement of Operations**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **Net sales** | $750503 | $138876 | (5),(6) | $889379 |
| Cost of sales | 866014 |  |  | 866014 |
| Gross Profit | (115511) | 138876 |  | 23365 |
| **Operating expenses:** |  |  |  |  |
| General and administrative expenses | 379100 | 118162 | (2),(3) | 497262 |
| Loss from operations | (494611) | 20714 |  | (473897) |
| Other income | 24833 | (24833) | (6) |  |
| **Net loss** | $**(469778)** | $**(4119)** |  | $**(473897)** |

---

**Community Specialty Pharmacy, LLC**

**Statement of Operations**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **Net sales** | $1201149 | $24003 | (5),(6) | $1225152 |
| Cost of sales | 1068367 |  |  | 1068367 |
| Gross Profit | 132782 | 24003 |  | 156785 |
| **Operating expenses:** |  |  |  |  |
| General and administrative expenses | 285348 | 260687 | (2),(3) | 546035 |
| Loss from operations | (152566) | (236684) |  | (389250) |
| Other income | 24003 | (24003) | (6) |  |
| **Net loss** | $**(128563)** | **(260687)** |  | $**(389250)** |

---

**Community Specialty Pharmacy, LLC**

**Balance Sheet**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **ASSETS** |  |  |  |  |
| **Current assets:** |  |  |  |  |
| Cash and cash equivalents | $14846 | $— |  | $14846 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 79338 | (57611) | (1) | 21727 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 51136 |  |  | 51136 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 3287 |  |  | 3287 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | **148607** | **(57611)** |  | **90996** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**148607** | $**(57611)** |  | $**90996** |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |  |  |
| **Current liabilities:** |  |  |  |  |
| Accounts payable | $78853 | $— |  | $78853 |
| Other current liabilities | 18783 | 207195 | (3),(4) | 225978 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **97636** | **207195** |  | **304831** |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | **97636** | **207195** |  | **304831** |
| Commitment and contingencies |  |  |  |  |
| **Members' equity:** |  |  |  |  |
| Due to Parent Company | 1799973 |  |  | 1799973 |
| Accumulated deficit | (1749002) | (264806) | (1),(2),(3),(5) | (2013808) |
| **Total members equity** | **50971** | **(264806)** |  | **(213835)** |
| &nbsp;&nbsp;&nbsp;**Total liabilities and owners' equity** | $**148607** | $**(57611)** |  | $**90996** |

---

**Community Specialty Pharmacy, LLC**

**Balance Sheet**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **ASSETS** |  |  |  |  |
| **Current assets:** |  |  |  |  |
| Cash and cash equivalents | $63719 | $— |  | $63719 |
| Accounts receivable | 225803 | (114043) | (1) | 111760 |
| Inventories | 42494 |  |  | 42494 |
| Prepaid expenses and other assets | 6682 |  |  | 6682 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | **338698** | **(114043)** |  | **224655** |
| &nbsp;&nbsp;&nbsp;**Total assets** | $**338698** | $**(114043)** |  | $**224655** |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |  |  |
| **Current liabilities:** |  |  |  |  |
| Accounts payable | $30083 | $— |  | $30083 |
| Other current liabilities | 7865 | 146644 | (3),(4) | $154509 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **37948** | **146644** |  | **184592** |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | **37948** | **146644** |  | **184592** |
| Commitment and contingencies |  |  |  |  |
| **Owners' equity:** |  |  |  |  |
| Due to Parent Company | 1579974 |  |  | 1579974 |
| Accumulated deficit | (1279224) | (260687) | (1),(2),(3),(5) | (1539911) |
| **Total members' equity** | **300750** | **(260687)** |  | **40063** |
| &nbsp;&nbsp;&nbsp;**Total liabilities and members' equity** | $**338698** | $**(114043)** |  | $**224655** |

---

**Community Specialty Pharmacy, LLC**

**Statement of Cashflows**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **Operating activities:** |  |  |  |  |
| Net loss | $(469778) | (4119) | (1),(2),(3),(5) | $(473897) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 146465 | (56432) | (1) | 90033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (8641) |  |  | (8641) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 3395 |  |  | 3395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 48769 |  |  | 48769 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 10918 | 60551 | (3),(4) | 71469 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | **(268872)** | **—** |  | **(268872)** |
| **Financing activities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Capital contributions from parent company | 219999 |  |  | 219999 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 219999 |  |  | 219999 |
| Net decrease in cash and cash equivalents | **(48873)** |  |  | **(48873)** |
| **Cash and cash equivalents** |  |  |  |  |
| Beginning of period | 63719 |  |  | 63719 |
| End of period | $14846 | $— |  | $14846 |

---

**Community Specialty Pharmacy, LLC**

**Statement of Cashflows**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **Operating activities:** |  |  |  |  |
| Net loss | $(128563) | $(260687) | (1) (2),(3),(5) | $(389250) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (33597) | 114043 | (1) | 80446 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (7817) |  |  | (7817) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (2692) |  |  | (2692) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (100313) |  |  | (100313) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 822 | 146644 | (3),(4) | 147466 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | **(272160)** | **—** |  | **(272160)** |
| **Financing activities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Capital contributions from parent company | 254243 |  |  | 254243 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 254243 |  |  | 254243 |
| Net decrease in cash and cash equivalents | **(17917)** |  |  | **(17917)** |
| **Cash and cash equivalents** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period | 81636 |  |  | 81636 |
| &nbsp;&nbsp;&nbsp;End of period | $63719 | $**—** |  | $63719 |

---

**Community Specialty Pharmacy, LLC**

**Statement of Owners' Equity**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As previously restated** | **As previously restated** | **As previously restated** | **As restated** | **As restated** | **As restated** |
|  | **Due to**<br>**Parent**<br>**Members'**<br>**Company** |<br>**Accumulated**<br>**Deficit** |<br>**Total**<br>**Equity** | **Due to**<br>**Parent**<br>**Member's**<br>**Company** |<br>**Accumulated**<br>**Deficit** |<br>**Total**<br>**Deficit** |
| **Balance at December 31, 2020** | $**1325731** | $**(1150661)** | $**175070** | $**1325731** | $**(1150661)** | $**175070** |
| Capital contributions from parent company | 254243 |  | 254243 | 254243 |  | 254243 |
| Net loss |  | (128563) | (128563) |  | (389250) | (389250) |
| **Balance at December 31, 2021** | **1579974** | **(1279224)** | 300750 | **1579974** | **(1539911)** | **40063** |
| Capital contributions from parent company | 219999 |  | 219999 | 219999 |  | 219999 |
| Net loss |  | (469778) | (469778) |  | (473897) | (473897) |
| **Balance at December 31, 2022** | $**1799973** | $**(1749002)** | $**50971** | $**1799973** | $**(2013808)** | $**(213835)** |

---

**Note 3 Prepaid expenses and other assets**

Prepaid expenses and other assets consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Prepaid licenses and fees | 3287 | 6682 |
| **Prepaid expense and other assets** | $3287 | $6682 |

---

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Note 4 Other current liabilities**

Other current liabilities consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Accrued salary and wages | 18783 | 7865 |
| **Other current liabilities** | $18783 | $7865 |

---

**Note 5 Related Party**

The Company's transactions with Trxade and its subsidiaries are considered related party transactions. The Company has historically operated part of Trxade and not as a standalone company and certain of the Company's transactions entered into the ordinary course business were with Txade and its subsidiaries. Accordingly, certain shared costs have been allocated to the Company by Txade and reflected as expenses in these financial statements and some expenses have been paid on behalf of the Company by Trxade and its subsidiaries. With the exception of Trxade Inc, who is the ultimate parent company, all the companies presented in the table below are wholly owned subsidiaries of Trxade

Related party transaction of consists of the following:

December 31, 2022

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |<br>**Trxade**<br>**Group** |<br>**Trxade Inc** | **Integra**<br>**Pharma**<br>**Solutions** | **Alliance**<br>**Pharma**<br>**Solutions** |<br>**Bonum**<br>**Health Inc** |
| Expenses Incurred by Related Party | $30280 | $294029 | $— | $**—** | $**—** |
| Sales | (10893) |  |  |  |  |
| Inter Group transfers | 807445 | (916090) | 10401 | 4327 | 500 |
|  | $**826832** | $**(622061)** | $**10401** | $**4327** | $**500** |

---

December 31, 2021

---

| | | | |
|:---|:---|:---|:---|
|  |<br>**Trxade**<br>**Group** |<br>**Trxade Inc** | **Integra**<br>**Pharma**<br>**Solutions** |
| Expenses Incurred by Related Party | $(46694) | $(203252) | $(4548) |
| Inter Group Transfers | (892.56) | 0 | 1142.56 |
|  | $**(47586)** | $**(203252)** | $**(3405)** |

---

**Note 6 Due to Parent Company**

Amounts due to parent company consists of consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Expense reimbursement dues | 1799973 | 1579974 |
| **Due to Parent Company** | $**1799973** | $**1579974** |

---

**COMMUNITY SPECIALTY PHARMACY, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Note 7 Commitment and Contingencies**

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 8 Subsequent Events**

The Company evaluated subsequent events through August 29, 2023, the date at which the Financial Statements were available to be issued.

In January 2023, as part of a business combination between Artemis Strategic Investment Corporation ("Artemis"), a Special Purpose Acquisition Company ("SPAC"), and Danam Health, Inc ("Danam"), with Messrs. Suren Ajjarapu and Prashant Patel as officers, a holding company Wood Sage, LLC ("Wood Sage) will be acquired by Danam to effectuate a business combination acquiring 100% of our outstanding membership interests from Trxade Health, Inc's ("Trxade"), with Messrs. Suren Ajjarapu and Prashant Patel as officers of TRxADE. On or about January 20, 2023, Wood Sage, Community Specialty Pharmacy, LLC ("CSP"), and TRxADE Health, Inc. ("TRxADE") entered into a membership interest purchase agreement ("CSP MIPA"), amended January 20, 2023, whereby Wood Sage would buy TRxADE's 100% membership interest in CSP. Wood Sage would pay $100,000 at closing. On or about January 20, 2023, Wood Sage and CSP entered into a master service agreement ("Wood Sage MSA"), amended on or about January 20, 2023, whereby CSP would manage the operations of CSP through closing.

On August 6, 2023, Danam entered into a Business Combination Agreement ("BCA"), by and among Artemis, ASIC Merger Sub Inc, a wholly owned subsidiary of Artemis ("Merger Sub"), Artemis Sponsor, LLC, a representative for the stockholders of Artemis, Suren Ajjarapu, and Danam Health, Inc. Upon the consummation of the Business Combination Danam will survive and become a wholly owned subsidiary of Artemis, which will be renamed Danam Health Holdings Corporation ("New Danam"). The consummation of the Business Combination is conditioned upon a favorable vote of both Artemis and Danam's stockholders. As part of the BCA the Company entered into membership interest purchase agreements with Wellgistics, LLC ("Wellgistics"), and Wood Sage, LLC ("Wood Sage") and its respective selling equity holders to acquire all of the issued and outstanding membership interests of both companies in a transaction that will close immediately prior the business combination of Artemis and Danam.

On August 22, 2023, Wood Sage purchased CSP and Alliance Pharma Solutions, LLC ("APS") from Integral Health, Inc. (successor in interest to TRxADE). Wood Sage signed a promissory note payable to Integral Health, Inc. in the amount of $1,300,000, due 30 days from closing.

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**INDEPENDENT AUDITORS' REPORT**

To the members of Alliance Pharma Solutions, LLC.

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of Alliance Pharma Solutions, LLC. (the "Company") as of December 31, 2022 and 2021, the related statement of operations and comprehensive loss, statements of owner's equity and statements of cash flows for each of the two years in the period ended December 31, 2022, and the related notes collectively referred to as the "Financial Statements". In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with Generally Accepted Accounting Principles of United States of America.

In our report dated May 24th, 2023, we expressed an opinion that the 2022 financial statements did not fairly present financial position, results of operations and comprehensive loss, and cash flows in conformity with accounting principles generally accepted in the United States of America because of the following departure due to which the Financial Statements were materially misstated; The company had not capitalized expenses relating to Research and development which has crossed the research stage and commenced development. As described in Note 2 Restatement of previously issued Financial Statements, the Company restated its 2022 financial statements. Accordingly, our present opinion on the 2022 financial statements, as presented herein, is different from that expressed in our previous report.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the applicable rules and regulations of the and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have nor we have engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matter**

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

&nbsp;&nbsp;&nbsp;&nbsp;(1) relate
 to accounts or disclosures that are material to the financial statements and

&nbsp;&nbsp;&nbsp;&nbsp;(2) involved
 our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Suri & Co., Chartered Accountants

We have served as the Company's auditors since 2021.

Date: 29th August 2023

Place: Chennai, India

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
|  | **(As Restated)** | |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| Cash and cash equivalents | $1419 | $1469 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 3196 | 1663 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | **4615** | **3132** |
| Property, plant and equipment, net |  | 22251 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets under development | 567256 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**571871** | $**25383** |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $75818 | $72294 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | **75818** | **72294** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **75818** | **72294** |
| Commitments and contingencies (Note 8) |  |  |
| **Members' equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to Parent Company | 1339053 | 769261 |
| Accumulated deficit | (843000) | (816172) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total members' equity (deficit)** | **496053** | **(46911)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and members' equity** | $**571871** | $**25383** |

---

The accompanying notes are an integral part of these financial statements.

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2021** |
|  | **(As Restated)** | |
| **Operating expenses:** |  |  |
| Research and development expenses | $1400 | $343048 |
| General and administrative expenses | 24277 | 53768 |
| Depreciation | 1151 | 5351 |
| Loss from operations | (26828) | (402167) |
| **Net loss** | $**(26828)** | $**(402167)** |

---

The accompanying notes are an integral part of these financial statements.

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**STATEMENTS OF MEMBERS' EQUITY**

---

| | | | |
|:---|:---|:---|:---|
|  | **Due to Parent**<br>**Company** | **Accumulated**<br>**Deficit** | **Total Members'**<br>**Equity** |
| **Balance at December 31, 2020** | $**421379** | $**(414005)** | $**7374** |
| Capital contributions from parent company | 347882 |  | 347882 |
| Net loss |  | (402167) | (402167) |
| **Balance at December 31, 2021** | **769261** | **(816172)** | $**(46911)** |
| Capital contributions from parent company | 569792 |  | 569792 |
| Net loss |  | (26828) | (26828) |
| **Balance at December 31, 2022 (As restated)** | $**1339053** | $**(843000)** | $**496053** |

---

The accompanying notes are an integral part of these financial statements.

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
|  | **(As Restated)** | |
| **Operating activities:** |  |  |
| Net loss | $(26828) | $(402167) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Depreciation | 1151 | 5351 |
| Gain/(loss) on asset disposal | (1900) | 422 |
| Changes in operating assets and liabilities: |  |  |
| Prepaid expenses and other assets | (1534) | (1663) |
| Accounts payable | 3525 | 72294 |
| Net cash used in operating activities | (25586) | (325763) |
| **Investing activities:** |  |  |
| Purchase of vehicle |  | (23018) |
| Proceeds from sale of property, plant and equipment | 23000 | **—** |
| Payments made for intangible assets under development | (567256) |  |
| Net cash used in investing activities | (544256) | (23018) |
| **Financing activities:** |  |  |
| Capital contributions from parent company | 569792 | 347882 |
| Net cash provided by financing activities | 569792 | 347882 |
| Net decrease in cash and cash equivalents | **(50)** | **(899)** |
| **Cash and cash equivalents** |  |  |
| Beginning of period | 1469 | 2368 |
| End of period | $1419 | $1469 |

---

The accompanying notes are an integral part of these financial statements.

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Note 1 Organization and Summary of Significant Accounting Policies**

**Nature of Operations**

Alliance Pharmaceutical Solutions, LLC (d.b.a. DelivMeds) ("APS", or the "Company") has developed a same day Pharma delivery software - Delivmeds.com and invested in SyncHealth MSO, LLC a managed services organization in January 2019, which investment was divested in February 2020. The Company is a wholly owned subsidiary of Trxade Health, Inc, ("Trxade"), with Messrs. Suren Ajjarapu and Prashant Patel as officers of Trxade, and has entered into an agreement to sell the Company (See Note 9 - Subsequent Events)

**Basis of Presentation**

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") in all material respects and have been consistently applied in preparing the accompanying financial statements.

**Use of Estimates**

The preparation of the Company's Financial Statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the Financial Statements. These estimates are based on information available through the date of the issuance of the financial statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

● provisions for income taxes and related valuation allowances and tax uncertainties;

● recoverability of long-lived assets and their related estimated lives;

**Liquidity**

Historically, operations have been funded primarily through the infusion of capital by Trxade Health, Inc, the Company parent company parent (See Note 5 - Due to Parent Company). The Company has the ability to maintain the current level of spending or reduce expenditure to maintain operations if funding is not available.

**Reclassification**

Certain prior year amounts have been reclassified to conform to the current year presentation.

**Comprehensive Income**

Comprehensive income includes net income as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income and comprehensive income presented in the financial statements for the years ended December 31, 2022, and 2021.

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**Property, Plant and Equipment, net**

Property, plant and equipment, net ("PP&E") is stated at cost less accumulated depreciation and amortization and any accumulated impairment losses. Depreciation and amortization are computed using the straight-line method over the assets' estimated useful lives. The estimated useful lives of PP&E are as follows:

Automobiles and trucks 5 years

Upon the sale or retirement of assets, costs and the related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in the results of operations.

The Company evaluates its long-lived assets or asset groups for indicators of possible impairment by determining whether there were any triggering events that could impact the Company's assets. If events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable the Company performs a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by such asset or asset group. Should an impairment exist, the impairment loss is measured based on the excess carrying value of the asset over the asset's fair value generally determined by estimates of future discounted cash flows.

The Company has not identified any such impairment losses for the years ended December 31, 2022 and 2021.

**Intangible Assets**

Research expenditure is recognized as an expense and Development expenditure that meets specified criteria is recognized as the cost of an intangible asset. The company has begun capitalizing the expenses related to the app Delivmeds as the management has determined that the Company's app has crossed the research phase and has begun development.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

Level 1 Quoted prices are available in active markets for identical assets or liabilities.

---

| | |
|:---|:---|
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |

---

Level 3 Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations.

The carrying amounts of cash, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments.

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits.

*Recent Accounting Pronouncements*

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. The pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**Accounting Pronouncements Not Yet Adopted**

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") *No. 2014-09, Revenue from Contracts with Customers*, a comprehensive new revenue recognition standard that supersedes most existing industry-specific guidance. Accounting Standards Codification ("ASC") 606 creates a framework by which an entity allocates the transaction price to separate performance obligations and recognizes revenue when each performance obligation is satisfied. Under the new standard, entities are required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either "full retrospective" adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up in the earliest period presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up in the current period. In July and December 2016, the FASB issued various additional authoritative guidance for the new revenue recognition standard. The Company plans to adopt the accounting standard once it starts generating revenue.

In February 2016, the FASB issued ASU *No. 2016-02, Leases*, to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related right-of-use asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The Company plans to adopt this new guidance when it acquires any new leases.

In June 2016, the FASB issued ASU *No. 2016-13, Financial Instruments - Credit Losses* (ASC 326), which provides guidance on measurement of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to GAAP that is based on expected losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting this standard, but does not expect the adoption to have a material impact on its Financial Statements.

**Note 2 Restatement of previously issued Financial Statements**

The Company's Balance Sheet as of December 31, 2022, and its Statement of Operations, Statement of Shareholders' Equity, and Statement of Cash Flows for the year ended December 31, 2022, and certain related notes, have been restated to correct errors.

*Restatement Background*

During the course of the independent audit of the 2022 financial statements, the Company's auditor identified errors that resulted in a qualified opinion being issued on the financial statements. The errors identified were determined to be material in the 2022 Financial Statements. As a result of these errors, the Company has restated its Financial Statements for the year ended December 31, 2022, in accordance with ASC 250, *Accounting Changes and Error Corrections* (the "restated financial statements").

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**NOTES TO FINANCIAL STATEMENTS**

*Description of Errors*

The following are the errors in the previously issued 2022 Financial Statements:

1) *Research and development expenses:* An error was identified related to expenses for a research and development ("R&D") project that had successfully passed the development stage being incorrectly reported as R&D expenses in the in the Statement of Operations. The error overstated previously reported R&D expense and net loss by approximately $45 thousand.

2) *General and administration expenses:* An error was identified related to expenses for a research and development ("R&D") project that had successfully passed the development stage being incorrectly reported as general and administrative ("G&A") expenses in the Statement of Operations. The error overstated previously reported G&A expenses and net loss by approximately $71 thousand.

3) *Intangible assets under development:* An error was identified related to the capitalization of intangible assets under development during the year ended December 31, 2022. The Company inappropriately recorded expenses related to an R&D project that had successfully passed its development stage, whereby were expensed instead of capitalized as required by the General Accepted Accounting Principal. The errors understated previously reported intangible assets under development by approximately $116 thousand.

*Description of Restatement Tables*

The following tables present a reconciliation from the figures as previously reported to the as restated amounts for the Company's Balance Sheet, Statement of Operations, Statement of Cash Flows, and Statement of Shareholders' Equity as of and for the year ended December 31, 2022. The amounts as previously reported were derived from the Company's previously issued Financial Statements for the year ended December 31, 2022, issued on May 24, 2023 (certain amounts may not add due to rounding):

**Alliance Pharmaceutical Solutions, LLC**

**Statement of Operations**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **Operating expenses:** |  |  |  |  |
| Research and development expenses | $46787 | $(45387) | (1) | $1400 |
| General and administrative expenses | 95301 | (71024) | (2) | 24277 |
| Depreciation and amortization | 1151 |  |  | 1151 |
| Loss from operations | (143239) | 116411 |  | (26828) |
| **Net loss** | $**(143239)** | **116411** |  | $**(26828)** |

---

**Alliance Pharmaceutical Solutions, LLC**

**Balance Sheet**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** |<br>**As Restated** |
| **ASSETS** | | |  | |
| **Current assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1419 | $— |  | $1419 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 3196 |  |  | 3196 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | **4615** | **—** |  | **4615** |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net |  |  |  | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets under development | 450845 | 116411 | (3) | 567256 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**455460** | $**116411** |  | $**571871** |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |  |  |
| **Current liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $75818 | $— |  | $75818 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | **75818** | **—** |  | **75818** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **75818** | **—** |  | **75818** |
| Commitment and contingencies |  |  |  |  |
| **Members' equity:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Due to Parent Company | 1339053 |  |  | 1339053 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (959411) | 116411 | (1),(2) | (843000) |
| &nbsp;&nbsp;&nbsp;**Total members' equity** | **379642** | **116411** |  | **496053** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and members' equity** | $**455460** | $**116411** |  | $**571871** |

---

**Alliance Pharmaceutical Solutions, LLC**

**Statement of Cashflows**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **As Previously**<br>**Reported** | **Restatement**<br>**Impact** | **Restatement**<br>**Reference** | **As**<br>**Restated** |
| **Operating activities:** |  |  |  |  |
| Net loss | $(143239) | $116411 | (1),(2) | $(26828) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 1151 |  |  | 1151 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on asset disposal | (1900) |  |  | (1900) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (1534) |  |  | (1534) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 3525 |  |  | 3525 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | **(141997)** | **116411** |  | **(25586)** |
| **Investing activities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of property, plant and equipment | 23000 |  |  | 23000 |
| &nbsp;&nbsp;&nbsp;Payments made for intangible assets under development | (450845) | (116411) | (3) | (567256) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | **(427845)** | **(116411)** |  | **(544256)** |
| **Financing activities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Capital contributions from parent company | 569792 | **—** |  | 569792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 569792 |  |  | 569792 |
| Net increase decrease in cash and cash equivalents | (50) |  |  | (50) |
| **Cash and cash equivalents** |  |  |  |  |
| Beginning of period | 1469 |  |  | 1469 |
| End of period | $1419 | $— |  | $1419 |

---

**Alliance Pharmaceutical Solutions, LLC**

**Statement of Owners' Equity**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As previously reported** | **As previously reported** | **As previously reported** | **As restated** | **As restated** | **As restated** |
|  | **Due to**<br>**Parent**<br>**Company** |<br>**Accumulated**<br>**deficit** | **Total**<br>**Owners'**<br>**Equity** | **Due to**<br>**Parent**<br>**Company** |<br>**Accumulated**<br>**deficit** | **Total**<br>**Owners'**<br>**Equity** |
| **Balance at December 31, 2021** | $**769261** | $**(816172)** | $**(46911)** | $**769261** | $**(816172)** | $**(46911)** |
| Capital contributions from parent company | 569792 |  | 569792 | 569792 |  | 569792 |
| Net loss |  | (143239) | (143239) |  | (26828) | (26828) |
| **Balance at December 31, 2022** | $**1339053** | $**(959411)** | $**379642** | $**1339053** | $**(843000)** | $**496053** |

---

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**NOTES TO FINANCIAL STATEMENTS**

**Note 3 Prepaid expenses and other assets**

Prepaid expenses and other assets consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Prepaid software | $2750 | $— |
| Prepaid industry fees | 446 | 1663 |
| Prepaid expenses and other assets | $3196 | $1663 |

---

**Note 4 Property, Plant and Equipment, net**

PP&E consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Automobiles and trucks | $— | $23018 |
|  |  | 23018 |
| Less: Accumulated depreciation |  | (767) |
| Property, plant and equipment, net | $— | $22251 |

---

Depreciation expenses for the years ended December 31, 2022 and 2021 amounted to $1,151 and $5,351 respectively.

**Note 5 Intangible assets under development**

Intangible assets under development consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Internal development cost - Delivmeds | 567256 |  |
| **Total Intangible assets under development** | $567256 | $— |

---

**Note 6 Related Party**

The Company's transactions with Trxade and its subsidiaries are considered related party transactions. The Company has historically operated part of Trxade and not as a standalone company and certain of the Company's transactions entered into the ordinary course business were with Trxade and its subsidiaries. Accordingly, certain shared costs have been allocated to the Company by Trxade and reflected as expenses in these financial statements and some expenses have been paid on behalf of the Company by Trxade and its subsidiaries. With the exception of Trxade Inc, who is the ultimate parent company, all the companies presented in the table below are wholly owned subsidiaries of Trxade.

Related party transaction of consists of the following:

December 31, 2022

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |<br>**Trxade**<br>**Group** |<br>**Trxade Inc** | **Integra**<br>**Pharma**<br>**Solutions** | **Community**<br>**Specialty**<br>**Pharmacy** |<br>**Bonum**<br>**Health Inc** |
| Expenses incurred by related party | 23138 | 428936 |  | 1749 |  |
| Inter group transfer | 764043 | (721255) | (24937) | (15576) | (2275) |
| Capital contributions | 86470 | 10000 | 10000 | 9500 |  |
|  | 873651 | (282319) | (14937) | (4327) | (2275) |

---

**ALLIANCE PHARMACEUTICAL SOLUTIONS, LLC**

**NOTES TO FINANCIAL STATEMENTS**

December 31, 2021

---

| | | | |
|:---|:---|:---|:---|
|  | **Trxade**<br>**Group** |<br>**Txade Inc** | **Bonum**<br>**Health Inc** |
| Expenses incurred by related party | 15385 | 206203 | 2275 |
| Capital contributions | 124018 |  |  |
|  | 139403 | 206203 | 2275 |

---

**Note 7 Due to Parent Company**

Amounts due to parent company consists of consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Expenses reimbursement due | $1339053 | $769261 |
| **Due to Parent Company** | $**1339053** | $**769261** |

---

**Note 8 Commitment and Contingencies**

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 9 Subsequent Events**

The Company evaluated subsequent events through August 29, 2023, the date at which the Financial Statements were available to be issued.

In January 2023, as part of a business combination between Artemis Strategic Investment Corporation ("Artemis"), a Special Purpose Acquisition Company ("SPAC"), and Danam Health, Inc ("Danam"), with Messrs. Suren Ajjarapu and Prashant Patel as officers, a holding company Wood Sage, LLC ("Wood Sage) will be acquired by Danam to effectuate a business combination acquiring 100% of our outstanding membership interests from Trxade Health, Inc's ("Trxade"). On or about January 20, 2023, Wood Sage, Alliance Pharma Solutions ("APS"), and TRxADE entered into a membership interest purchase agreement ("APS MIPA"), amended on or about January 20, 2023, whereby Wood Sage would buy TRxADE's 100% membership interest in APS. Wood Sage would pay $1,200,000 at closing. On or about January 20, 2023, Wood Sage and APS entered into a master service agreement ("Wood Sage MSA"), amended on or about January 20, 2023, whereby APS would manage the operations of APS through closing.

On August 6, 2023, Danam entered into a Business Combination Agreement ("BCA"), by and among Artemis, ASIC Merger Sub Inc, a wholly owned subsidiary of Artemis ("Merger Sub"), Artemis Sponsor, LLC, a representative for the stockholders of Artemis, Suren Ajjarapu, and Danam Health, Inc. Upon the consummation of the Business Combination Danam will survive and become a wholly owned subsidiary of Artemis, which will be renamed Danam Health Holdings Corporation ("New Danam"). The consummation of the Business Combination is conditioned upon a favorable vote of both Artemis and Danam's stockholders. As part of the BCA the Company entered into membership interest purchase agreements with Wellgistics, LLC ("Wellgistics"), and Wood Sage, LLC ("Wood Sage") and its respective selling equity holders to acquire all of the issued and outstanding membership interests of both companies in a transaction that will close immediately prior the business combination of Artemis and Danam.

On August 22, 2023, Wood Sage purchased APS and Community Specialty Pharmacy, LLC ("CSP") from Integral Health, Inc. (successor in interest to TRxADE). Wood Sage signed a promissory note payable to Integral Health, Inc. in the amount of $1,300,000, due 30 days from closing.

**AlliancePharma Solutions LLC**

**Condensed Balance Sheets**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1050 | $1419 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets |  | 3196 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1050 | 4615 |
| Property, plant and equipment, net |  |  |
| Intangible assets under development | 858498 | 567256 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $859548 | $571871 |
| **LIABILITIES AND MEMBERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $64313 | $75818 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 64313 | 75818 |
| Commitments and contingencies |  |  |
| Members equity: |  |  |
| Due to parent company | 1673044 | 1339053 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (877809) | (843000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total members' equity | 795235 | 496053 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' equity | $859548 | $571871 |

---

The accompanying notes are an integral part of these financial statements.

**Alliance Pharma Solutions LLC**

**Condensed Statements of Operations and Comprehensive Loss**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Period Ended** | **Period Ended** |
|  | **August 21,** | **August 21,** |
|  | **2023** | **2022** |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Research and development expenses | $375 | $950 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 34434 | 13113 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation |  | 1151 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 34809 | 15214 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (34809) | (15214) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(34809) | $(15214) |

---

The accompanying notes are an integral part of these financial statements.

**Alliance Pharma Solutions LLC**

**Condensed Statements of Members' Equity**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Due to**<br>**Parent Company** | **Accumulated**<br>**Deficit** | **Total Members'**<br>**Equity** |
| **Balances at December 31, 2021** | $769261 | $(816172) | $(46911) |
| Capital contributions from parent company | 444433 |  | 444433 |
| Net loss |  | (15214) | (15214) |
| **Balances at August 21, 2022** | $1213694 | $(831386) | $382308 |
| **Balances at December 31, 2022** | $1339053 | $(843000) | $496053 |
| Capital contributions from parent company | 333991 |  | 333991 |
| Net loss |  | (34809) | (34809) |
| **Balances at August 21, 2023** | $1673044 | $(877809) | $795235 |

---

The accompanying notes are an integral part of these financial statements.

**Alliance Pharma Solutions LLC**

**Condensed Statements of Cash Flows**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Period Ended** | **Period Ended** |
|  | **August 21,** | **August 21,** |
|  | **2023** | **2022** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(34809) | $(15214) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation |  | 1151 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on asset disposal |  | (1900) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 3196 | (4770) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (11505) | (47791) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (43118) | (68524) |
| **Cash flows from investing activities:** |  |  |
| Sale of fixed assets |  | 23000 |
| Payments made for intangible assets under development | (291242) | (398691) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (291242) | (375691) |
| **Cash flows from financing activities:** |  |  |
| Capital contribution from member | 333991 | 444433 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 333991 | 444433 |
| **Net change in cash and cash equivalents** | (369) | 218 |
| Cash and cash equivalents at beginning of period | 1419 | 1469 |
| Cash and cash equivalents at end of period | $1050 | $1687 |

---

The accompanying notes are an integral part of these financial statements.

**ALLIANCEPHARMA SOLUTIONS LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Note 1. Organization and Summary of Significant Accounting Policies**

Alliance Pharmaceutical Solutions, LLC (d.b.a. DelivMeds) ("APS", or the "Company") has developed a same day Pharma delivery software — Delivmeds.com and invested in SyncHealth MSO, LLC a managed services organization in January 2019, which investment was divested in February 2020. The Company is a wholly owned subsidiary of Trxade Health, Inc, ("Trxade") and has entered into an agreement to sell the Company (See Note 6 - Subsequent Events).

**Basis of Presentation**

The Company's fiscal year ends on December 31.

The accompanying unaudited condensed financial statements for the interim period ending June 30, 2023 have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information. Accordingly, these unaudited condensed financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. The unaudited condensed prepared on the same basis as the audited financial statements.

These unaudited condensed financial statements should be read in conjunction with the entity's audited financial statements and notes thereto. In the opinion of management, the unaudited condensed financial statements include all normal and recurring adjustments that are considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. Operating results for the period ended August 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 for any other interim period, or for any other future year.

**Use of Estimates**

The preparation of the Company's Financial Statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the Financial Statements. These estimates are based on information available through the date of the issuance of the financial statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

● provisions for income taxes and related valuation allowances and tax uncertainties;

● recoverability of long-lived assets and their related estimated lives;

**Liquidity**

Historically, operations have been funded primarily through the infusement of capital by Trxade Health, Inc, the Company's parent company. The Company has the ability to maintain the current level of spending or reduce expenditures to maintain operations if funding is not available.

**Reclassification**

Certain prior period amounts have been reclassified to conform to the current year presentation.

**Comprehensive Income**

Comprehensive income includes net income as well as other changes in members' equity that result from transactions and economic events other than those with members. There was no difference between net income and comprehensive income presented in the financial statements for the periods.

**ALLIANCEPHARMA SOLUTIONS LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Segment Reporting**

The Company's chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations. Accordingly, the Company has a single reportable segment and operating segment structure.

**Intangible Assets**

Research expenditure is recognized as an expense and Development expenditure that meets specified criteria is recognized as the cost of an intangible asset. The company has begun capitalizing the expenses related to the app Delivmeds as the management has determined that the Company's app has crossed the research phase and has begun development.

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

Level 1 Quoted prices are available in active markets for identical assets or liabilities.

---

| | |
|:---|:---|
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |

---

Level 3 Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations.

The carrying amounts of cash, accounts payable and accrued liabilities approximate fair value because of the short term nature of these instruments.

**Income Taxes**

The Company, with the consent of its members, has elected to be taxed as a partnership under both federal and state provisions. Under these provisions, the Company does not pay income taxes on its taxable income. Instead, each member reports on their income tax return their proportionate share of the Company's taxable income and tax credits.

*Recent Accounting Pronouncements*

The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. The pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**ALLIANCEPHARMA SOLUTIONS LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Accounting Pronouncements Not Yet Adopted**

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") *No. 2014-09, Revenue from Contracts with Customers*, a comprehensive new revenue recognition standard that supersedes most existing industry-specific guidance. Accounting Standards Codification ("ASC") 606 creates a framework by which an entity allocates the transaction price to separate performance obligations and recognizes revenue when each performance obligation is satisfied. Under the new standard, entities are required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either "full retrospective" adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up in the earliest period presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up in the current period. In July and December 2016, the FASB issued various additional authoritative guidance for the new revenue recognition standard. The Company plans to adopt the accounting standard once it starts generating revenue.

In February 2016, the FASB issued ASU *No. 2016-02, Leases*, to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related right-of-use asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The Company plans to adopt this new guidance when it acquires any new leases.

In June 2016, the FASB issued ASU *No. 2016-13, Financial Instruments—Credit Losses* (ASC 326), which provides guidance on measurement of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to GAAP that is based on expected losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company plans to adopt this new guidance as and when situation arises.

**Note 2 Prepaid Expenses**

Prepaid expenses of the company consists of the following,

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
| Prepaid software | $— | $2750 |
| Prepaid industry fees |  | 446 |
|  | $— | $3196 |

---

**Note 3 Intangible Assets under Development**

Intangible assets under development of the company consists of the following,

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
| Internal development cost - Delivmeds | $858498 | $567256 |
|  | $858498 | $567256 |

---

**ALLIANCEPHARMA SOLUTIONS LLC**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**Note 4 Dues to Parent Company**

Dues to parent company consists of the following,

---

| | | |
|:---|:---|:---|
|  | **August 21,**<br>**2023** | **December 31,**<br>**2022** |
| Expenses reimbursement due | $1673044 | $1339053 |
|  | $1673044 | $1339053 |

---

**Note 5 Commitments and Contingencies**

From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable.

Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position.

**Note 6 Subsequent Events**

In January 2023, Wood Sage, Alliance Pharma Solutions, LLC, a Florida limited liability company ("APS"), and TRxADE entered into a Membership Interest Purchase Agreement (the "APS MIPA"), pursuant to which TRxADE sold and Wood Sage acquired one hundred percent (100%) of the membership interest it owns in APS in exchange for (i) One Hundred Twenty Five Thousand Dollars ($125,000) and (ii) all amounts due and payable to TRxADE from Wood Sage under the Master Service Agreement. In January 2023, Danam and APS entered into an Amendment to the APS MIPA (the "APS MIPA Amendment"), pursuant to which the parties revised the Closing Payment to One Million Two Hundred Thousand Dollars ($1,200,000) plus any amounts owed under the Management Service Agreement (as defined in the APS MIPA).

On August 22, 2023, Wood Sage entered into the Note with Integral, which is owned by Suren Ajjarapu and Prashant Patel, to satisfy the purchase price under the APS MIPA. Upon the satisfaction of all closing conditions, the APS MIPA closed in August 2023.

**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

The following table presents the costs and expenses in connection with the issuance and distribution of the securities to be registered, other than Placement Agent fees, payable by us in connection with the sale of Common Stock being registered. Except as otherwise noted, we will pay all of these amounts. All amounts are estimates except the SEC registration fee and FINRA filing fee.

---

| | |
|:---|:---|
| SEC registration fee | $1598 |
| FINRA filing fee | $1566 |
| Accounting fees and expenses | $20000 |
| Legal fees and expenses | $150000 |
| Printing fees and expenses | $5000 |
| Total | $178164 |

---

**Item 14. Indemnification of Directors and Officers**

Section 145(a) of the DGCL provides, in general, that a corporation may indemnify any person who was or is a party to or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

Section 145(b) of the DGCL provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made with respect to any claim, issue or matter as to which he or she shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, he or she is fairly and reasonably entitled to indemnity for such expenses that the Court of Chancery or other adjudicating court shall deem proper.

Section 145(g) of the DGCL provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify the person against such liability under Section 145 of the DGCL.

On January 9, 2024, we entered into an indemnification agreement with Tim Canning, our Chief Executive Officer. The agreement requires Danam to indemnify Mr. Canning for certain expenses, including reasonable attorneys' fees, incurred by him in certain actions or proceedings arising out of his services as our Chief Executive Officer.

We are also expressly authorized to carry directors' and officers' insurance to protect our directors, officers, employees and agents against liabilities for actions taken in their capacities as directors and officers.

**Item 15. Recent Sales of Unregistered Securities**

The following information relates to all securities issued or sold by us within the past three years and not registered under the Securities Act.

On June 16, 2024, we issued 173,961 shares of our Common Stock (after giving effect to the stock split effected by the Company on October 30, 2024) to Nikul Panchal in connection with our acquisition of Wood Sage. These shares were issued in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

On November 4, 2024, we issued 3,999,335 shares of our Common Stock to Strategix Global LLC, Nomad Capital, LLC, Jouska Holdings LLC, and Brian Norton in connection with the acquisition of Wellgistics, LLC. These shares were issued in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

On March 21, 2025, we granted an aggregate of 19,764,108 shares of restricted stock under the Company's Amended and Restated 2023 Equity Incentive Plan to the following individuals:

● 600,000 shares to the Company's independent directors, with 198,000 shares vesting immediately and the remainder vesting in equal amounts on March 4, 2026, and March 4, 2027;

● 8,164,494 shares to the Company's non-independent directors, with each share vesting immediately;

● 503,158 shares to certain employees, with 15,000 shares vesting immediately, 116,942 vesting on October 1, 2025, 126,942 vesting on October 1, 2026, 126,942 vesting on October 1, 2027, 58,666 vesting on October 1, 2028, and 58,666 vesting on October 1, 2029;

● 9,000,000 shares to the Company's chief executive officer, which vest only upon the achievement of certain financial metrics for the fiscal years ending December 31, 2025, 2026, and 2027, with the first vesting opportunity occurring during the first quarter 2026;

● 223,333 shares to former employees, with each share vesting immediately; and

● 1,273,123 shares to consultants or advisers, with each share vesting immediately.

These shares were issued in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

On April 11, 2025, we issued 152,000 shares of Common Stock to Hudson Global Ventures, LLC ("**Hudson**") pursuant to an Equity Purchase Agreement by and between the Company and Hudson dated April 9, 2025 (the "**ELOC Agreement**"). These shares were issued in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

Between May 28, 2025, and June 30, 2025, we issued 1,155,030 shares of our Common Stock to Hudson pursuant to the ELOC Agreement. These shares were issued in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

On June 26, 2025, the Company issued 750,000 shares of restricted common stock to former chief executive officer Timothy Canning as consideration for the sign-on bonus deliverable to the terms of his employment agreement, which terminated upon his resignation in February 2025. These restricted shares vest on December 26, 2025, and were issued in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

On August 7, 2025, we issued 243,428 shares of Common Stock to Outside The Box Capital Inc. for services rendered to the Company. These shares were issued in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

On August 7, 2025, we issued an aggregate of 7,940,118 shares of Common Stock to the sellers of Wellgistics, LLC under the revised Wellgistics MIPA.

**Item 16. Exhibits and Financial Statement Schedules**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Exhibits*.

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | <br>**Description** |
| 2.1# | [Amended and Restated Membership Interest Purchase Agreement dated June 16, 2024, by and between Wellgistics Health, Inc. (f/k/a Danam Health, Inc.) and Nikul Panchal (incorporated by reference to Exhibit 10.1 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224028706/ex10-1.htm) |
| 2.2# | [Membership Interest Purchase Agreement dated May 11, 2023, by and among Wellgistics Health, Inc. (f/k/a Danam Health, Inc.), Wellgistics, LLC, Strategix Global LLC, Nomad Capital LLC, Jouska Holdings LLC, and Brian Norton, as amended (incorporated by reference to Exhibit 5.2 of Wellgistics Health, Inc.'s Current Report on Form 8-K filed with the SEC on March 6, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315225009442/ex5-2.htm) |
| 2.3 | [Seventh Amendment to Membership Interest Purchase Agreement dated May 11, 2023, by and among Wellgistics Health, Inc. (f/k/a Danam Health, Inc.), Wellgistics, LLC, Strategix Global LLC, Nomad Capital LLC, Jouska Holdings LLC, and Brian Norton, as amended (incorporated by reference to Exhibit 2.1 of Wellgistics Health, Inc.'s Current Report on Form 8-K filed with the SEC on April 18, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000164117225005404/ex2-1.htm) |
| 2.4 | [Eighth Amendment to Membership Interest Purchase Agreement dated May 11, 2023, by and among Wellgistics Health, Inc. (f/k/a Danam Health, Inc.), Wellgistics, LLC, Strategix Global LLC, Nomad Capital LLC, Jouska Holdings LLC, and Brian Norton, as amended (incorporated by reference to Exhibit 2.1 of Wellgistics Health, Inc.'s Current Report on Form 8-K filed with the SEC on July 29, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000164117225021455/ex2-1.htm) |
| 2.5#  | [Agreement and Plan of Merger dated April 8, 2025, by and among Wellgistics Health, Inc., Wellpeek Merger Sub 1, Inc., Wellpeek Merger Sub 2, LLC, Peek Healthcare Technologies, Inc., and the Stockholder Representative (incorporated by reference to Exhibit 2.1 of Wellgistics Health, Inc.'s Current Report on Form 8-K filed with the SEC on April 11, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000164117225003835/ex2-1.htm) |
| 3.1 | [Certificate of Incorporation of Wellgistics Health, Inc., as amended and currently in effect (incorporated by reference to Exhibit 3.1 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224043713/ex3-1.htm) |
| 3.2 | [Bylaws of Wellgistics Health, Inc. as currently in effect (incorporated by reference to Exhibit 3.2 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224028706/ex3-2.htm) |
| 4.1\*\* | Form of Warrant. |
| 4.2\*\* | Form of Pre-Funded Warrant. |
| 4.3\*\* | Form of Placement Agent Warrant. |
| 5.1\*\* | Opinion of Dykema Gossett PLLC. |
| 10.1† | [Second Amended and Restated 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025)](https://www.sec.gov/Archives/edgar/data/2030763/000149315224043713/ex10-4.htm) |
| 10.2† | [Executive Employment Agreement dated January 1, 2023, by and between Dr. Shafaat Pirani and Wellgistics Health, Inc. (incorporated by reference to Exhibit 10.7 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224028706/ex10-7.htm) |
| 10.3† | [Executive Employment Agreement dated March 3, 2025, by and between Wellgistics Health, Inc. and Brian Norton (incorporated by reference to Exhibit 5.1 of Wellgistics Health, Inc.'s Current Report on Form 8-K filed with the SEC on March 6, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315225009442/ex5-1.htm) |
| 10.4† | [Indemnification Agreement dated January 9, 2024, by and between Tim Canning and Wellgistics Health, Inc. (f/k/a Danam Health, Inc.) (incorporated by reference to Exhibit 10.10 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025)](https://www.sec.gov/Archives/edgar/data/2030763/000149315224028706/ex10-10.htm) |
| 10.5 | [Lease Agreement dated March 23, 2024, by and between GVI-IP TAMPA OFFICE OWNER, LLC and Wellgistics, LLC and Wellgistics Health, Inc (f/k/a Danam Health, Inc.) (incorporated by reference to Exhibit 10.12 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025)](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-12.htm) |
| 10.6 | [Promissory Note dated August 22, 2023, made by Wood Sage, LLC in favor of Integral Health, Inc. (incorporated by reference to Exhibit 10.13 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-13.htm) |

---

---

| | |
|:---|:---|
| 10.7 | [Promissory Note dated September 13, 2023, made by Wellgistics Health, Inc. (f/k/a Danam Health, Inc.) in favor of Nomad Capital LLC (incorporated by reference to Exhibit 10.16 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-16.htm) |
| 10.8\*# | [Loan and Security Agreement dated November 22, 2024, by and between Marco Capital, Inc. and Wellgistics, LLC.](ex10-8.htm) |
| 10.9 | [Guaranty Agreement dated as of November 22, 2024, by Wellgistics Health, Inc. (formerly Danam Health, Inc.) in favor of Marco Capital, Inc. (incorporated by reference to Exhibit 10.18 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-18.htm) |
| 10.10 | [Roadie, Inc. Services Agreement dated July 12, 2023, by and between Roadie, Inc. and Alliance Pharma Solutions, LLC dba DelivMeds (incorporated by reference to Exhibit 10.19 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-19.htm) |
| 10.11 | [Integration and Delivery Services Agreement dated January 26, 2022, by and between Lyft Healthcare, Inc. and Alliance Pharma Solutions, LLC d/b/a DelivMeds (incorporated by reference to Exhibit 10.20 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-20.htm) |
| 10.12 | [Master Services Agreement dated November 20, 2023, by and between Best Computer Systems, Inc. d/b/a BestRx Pharmacy Software and DelivMeds (incorporated by reference to Exhibit 10.21 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-21.htm) |
| 10.13 | [340B Contract Pharmacy Services Agreement dated April 1, 2021, by and between Community Specialty Pharmacy, LLC and AIDS Service Association of Pinellas, Inc. dba EPIC (incorporated by reference to Exhibit 10.22 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-22.htm) |
| 10.14 | [Participating Pharmacy Agreement dated February 6, 2023, by and between Medzoomer, Inc. and Community Specialty Pharmacy Inc. (incorporated by reference to Exhibit 10.23 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1/A filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex10-23.htm) |
| 10.15\*# | [Standard Merchant Cash Advance Agreement dated October 1, 2024, by and between Cedar Advance LLC and Wellgistics, LLC / Danam Health, Inc.](ex10-15.htm) |
| 10.16 | [Consulting Agreement dated February 25, 2025, by and between Wellgistics Health, Inc. and Hudson Global Ventures, LLC (incorporated by reference to Exhibit 1.1 of Wellgistics Health, Inc.'s Current Report on Form 8-K filed with the SEC on February 28, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315225008723/ex1-1.htm) |
| 10.17† | [Executive Employment Agreement dated April 22, 2025, by and between the Company and Mark DiSiena (incorporated by reference to Exhibit 10.1 of Wellgistics Health, Inc.'s Current Report on Form 8-K filed with the SEC on April 24, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000164117225006003/ex10-1.htm) |
| 10.18\*# | [Business Loan and Security Agreement dated as of August 26, 2025, among Agile Capital Funding, LLC, Wellgistics Health, Inc., and Wellgistics, LLC.](ex10-18.htm) |
| 10.19† | [Executive Employment Agreement dated June 10, 2025, by and between D. Tony Madsen and Wellgistics Health, Inc.](ex10-19.htm) |
| 10.20\*\* | Form of Securities Purchase Agreement. |
| 16.1 | [Letter from Suri & Co., Chartered Accountants, dated as of July 8, 2025 (incorporated by reference herein from Exhibit 16.1 to the Company's Current Report on Form 8-K filed with the SEC on July 8, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000164117225018229/ex16-1.htm) |
| 21.1 | [List of Subsidiaries of Wellgistics Health, Inc. (incorporated by reference to Exhibit 21.1 of Wellgistics Health, Inc.'s amended Registration Statement on Form S-1 filed with the SEC on January 14, 2025).](https://www.sec.gov/Archives/edgar/data/2030763/000149315224049098/ex21-1.htm) |
| 23.1\* | [Consent of Suri & Co.](ex23-1.htm) |
| 23.2\*\* | Consent of Dykema Gossett PLLC (reference is made to Exhibit 5.1) |
| 24.1\* | [Power of Attorney (reference is made to the signature page to the Registration Statement).](#sig) |
| 101.INS | Inline XBRL Instance 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 Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) |
| 107 | [Calculation of Filing Fee Table](https://www.sec.gov/Archives/edgar/data/2030763/000164117225020862/ex107.htm) |
| \* | Filed herewith. |
| \*\* | To be filed via amendment. |
| # | As permitted by Regulation S-K, Item 601(b)(10)(iv) of the Securities Exchange Act of 1934, as amended, certain confidential portions of this exhibit have been redacted from the publicly filed document. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request. |
| † | Indicates a management contract or any compensatory plan, contract or arrangement. |

---

**Item 17. Undertakings**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The undersigned registrant hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. *Provided, however*, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant hereby undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The undersigned registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tampa, State of Florida, on August 28, 2025.

---

| | |
|:---|:---|
| **WELLGISTICS HEALTH, INC.** | **WELLGISTICS HEALTH, INC.** |
| By: | */s/ Brian Norton* |
|  | Brian Norton |
|  | Chief Executive Officer |
|  | *(Principal Executive Officer)* |

---

**POWER OF ATTORNEY**

Each person whose signature appears below appoints Brian Norton as his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and any registration statement (including any amendment thereto) for this Offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or would do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute and substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Brian Norton* | Chief Executive Officer | August 28, 2025 |
| Brian Norton | *(Principal Executive Officer)* |  |
| */s/ Mark DiSiena* | Chief Financial Officer | August 28, 2025 |
| Mark DiSiena | *(Principal Financial Officer,*<br> *Principal Accounting Officer)* |  |
| */s/ Suren Ajjarapu* | Director | August 28, 2025 |
| Suren Ajjarapu |  |  |
| */s/ Michael L. Peterson* | Director | August 28, 2025 |
| Michael L. Peterson |  |  |
| */s/ Donald W. Anderson* | Director | August 28, 2025 |
| Donald W. Anderson |  |  |
| */s/ Rebecca Shanahan* | Director | August 28, 2025 |
| Rebecca Shanahan |  |  |

---

## Exhibit 10.8

**Exhibit 10.8**

![](ex10-8_001.jpg)

**<u>LOAN AND SECURITY AGREEMENT</u>**

This LOAN AND SECURITY AGREEMENT, ("<u>Agreement</u>"), dated as of November 22, 2024 ("<u>Closing Date</u>") is entered into between Marco Capital, Inc., a Delaware corporation with an office at 936 SW 1st Ave, # 306, Miami, FL 33130 ("<u>MCI</u>"), and WELLGISTICS, LLC, a Florida limited liability company, with its principal place of business and chief executive office at 358 Eagles Landing Drive, Lakeland, FL 33810 ("<u>Borrower</u>").

The parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. <u>DEFINITIONS</u> 

In addition to the defined terms contained in the first paragraph above, as used herein, the following terms shall have the following definitions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. " <u>Accounts</u> "
 means all accounts receivable due to Borrower, book debts, notes, drafts and acceptances
 and other forms of obligations now or hereafter owing to the Borrower, whether arising from
 the sale, license or lease of goods or software or the rendition of services by the Borrower
 (including, without limitation, any obligation that might be characterized as an account,
 contract right, general intangible or chattel paper, including electronic chattel paper under
 the Code), all of the Borrower's rights in, to and under all purchase orders now or
 hereafter received by the Borrower for goods and services, all proceed from the sale of Inventory,
 all monies due or to become due to the Borrower under all contracts for the sale or lease
 of goods or the rendition of services by the Borrower (whether or not yet earned) (including,
 without limitation, the right to receive the proceeds of said purchase orders and contracts),
 all collateral security and guarantees of any kind given by any obligor with respect to any
 of the foregoing, and all goods returned to or reclaimed by the Borrower that correspond
 to any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. " <u>Agreement</u> "
 means this Loan and Security Agreement and any supplements, amendments or modifications to
 this Loan and Security Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. " <u>Applicable Laws</u> " means all applicable laws, rules, regulations and orders of any Governmental
 Authority, including without limitation, usury laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4. " <u>Availability</u> "
 means, as of any date of determination, the amount that Borrower is entitled to borrow as
 Advances hereunder (after giving effect to all then outstanding Obligations and all sub-limits
 and reserves then applicable hereunder).

![](ex10-8_002.jpg)

1 of 61

![](ex10-8_001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5. " <u>Book Value</u> " means with respect to any Account means the book value thereof as determined
 in accordance with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6. " <u>Borrowing Base</u> " means, as of any date of
determination, the sum of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 applicable Advance Percentage multiplied by the aggregate amount of all Eligible Accounts, <u>plus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 applicable Advance Percentage multiplied by the aggregate amount of all Eligible Inventory, <u>minus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 Filters Reserve and the aggregate amount of all reserves, if any, established by MCI under
 Section 2.1(c) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7. " <u>Borrowing Base Certificate</u> " means the certificate, substantially in the form of <u>Exhibit A</u>, with appropriate insertions, to be submitted to MCI by Borrower pursuant to this Agreement
 and certified as true and correct by and of the Authorized Parties of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8. " <u>Borrower's Books</u> " means all of Borrower's books and records including, but not limited
 to: minute books; ledgers; records indicating, summarizing or evidencing Borrower's
 assets, liabilities, and the Accounts; all information relating to Borrower's business
 operations; and all computer programs, disc or tape files, printouts, runs, and other computer
 prepared information and the equipment containing such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9. " <u>Business Day</u> " means any day excluding Saturday, Sunday and any day which is a legal holiday
 under the laws of the State of New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.10. " <u>Cash Equivalents</u> " means (a) marketable direct obligations issued or unconditionally
 guaranteed by the United States or any agency or any State thereof having maturities of not
 more than one (1) year from the date of acquisition; (b) commercial paper maturing no more
 than one (1) year after its creation and having the highest rating from either Standard &
 Poor's Ratings Group or Moody's Investors Service, Inc.; (c) any certificates
 of deposit maturing no more than one (1) year after issue; and (d) money market funds at
 least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the
 kinds described in clauses (a) through (c) of this definition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.11. " <u>Code</u> "
 means the New York (United States) Uniform Commercial Code ("UCC"), and any and
 all terms used in this Agreement which are defined in the Code and are not defined herein
 shall be construed and defined in accordance with the definition of such terms under the
 Code.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.12. " <u>Collateral</u> " means each and all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 Accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 Equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 Inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the
 General Intangibles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the
 Negotiable Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the
 Borrower's Books;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any
 money, deposit accounts or other assets of Borrower in which MCI receives a security interest
 or which hereafter come into the possession, custody or control of Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) all
 Supporting Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all
 Investment Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) all
 Letter of Credit Rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the
 proceeds of any of the foregoing, including, but not limited to, proceeds of insurance covering
 the Collateral, or any portion thereof, and any and all Accounts, Equipment, Inventory, General
 Intangibles, Negotiable Collateral, the Borrower's Books, the Investment Property,
 the Letter of Credit Rights, the Supporting Obligations, money, deposit accounts or other
 tangible and intangible property resulting from the sale or other disposition of the Collateral,
 or any portion thereof or interest therein, and the proceeds thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.13. " <u>Daily Balance</u> " means and refers to the amount determined by taking the amount of the
 Obligations owed at the beginning of a given day, adding any new Obligations advanced or
 incurred on such date, and subtracting any payments or collections which are deemed to be
 paid on that date under the provisions of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14. " <u>Eligible Accounts Receivable</u> " or " <u>Eligible Accounts</u> " mean Accounts due
 from Account Debtors approved by MCI representing goods or services that have been delivered
 or completed, respectively, which MCI, in its sole credit judgment, deems to be Eligible
 Accounts Receivable. In any event and without limiting the generality of the forgoing, Eligible
 Accounts Receivable: (i) shall be no older than ninety (90) days from invoice date except
 for invoices which payment terms are net ninety (90) days which shall be no older than one
 hundred and twenty (120) days from invoice date; (ii) shall not have payment terms that exceed
 net ninety (90) days; (iii) shall be no more than sixty (60) days past due as determined
 by the terms of such invoice; (iv) shall be payable in full without setoff, counterclaim
 or defense or may contain other terms that have been approved by MCI; (iv) shall be insured
 Accounts if the respective invoice payment terms are ninety (90) days or beyond; (v) shall
 not be payable by an affiliate or related company and must be free from encumbrances or disputes,
 (vi) shall not represent consignment sales, scan on sale, guaranteed sale, sale or return,
 payment on reorder or any other terms indicating payment being conditional on any other event,
 requirement or status other than delivery or completion of the product or service, (vii)
 shall not include Accounts that are obligations of an Account Debtor, if fifty percent (50%)
 or more of the dollar amount of all Accounts owing by said Account Debtor are ineligible
 under this Section for being more than sixty (60) days overdue; (viii) shall not be owed
 by an Account Debtor that is the subject of an Insolvency Proceeding; (ix) shall meet the
 terms and conditions of the Agreement; (x) shall have arisen from the good-faith outright
 sale of goods or provision of services by Borrower under an enforceable contract and the
 goods shall have been delivered or shipped to the customer thereof in accordance with such
 order or contract and in the ordinary course of Borrower's business; (xi) shall be
 owned by Borrower subject to a perfected, first-priority security interest in favor of MCI,
 and Borrower's ownership of the Account shall not be subject to any other assignment,
 sale, claim, Lien or security interest; (xii) shall not be owed by an Account Debtor which
 is at the same time a provider or supplier of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.15. " <u>Eligible Inventory</u> " means and includes that Inventory (other than packaging materials, chemicals,
 additives, promotional items, labels and supplies) which MCI, in its sole credit judgment,
 deems to be Eligible Inventory. Without limiting the generality of the forgoing, no Inventory
 shall be Eligible Inventory unless: (i) it is finished goods; (ii) at all times it strictly
 complies with all of Borrower's warranties and representations to MCI; (iii) it is
 in good, new and salable condition; (iv) it is not slow moving, obsolete, expired, defective,
 damaged or unmerchantable, as determined by MCI's sole and absolute discretion; (v)
 it meets all standards imposed by any governmental agency or authority; (vi) it is at all
 times subject to MCI's duly perfected, first priority security interest and there exists
 no other lien or encumbrance other than as permitted hereunder; (vii) it is in Borrower's
 possession and control situated at a location in compliance with this Agreement; (viii) it
 is not in the hands of any third party, including a warehouseman, finisher, consignee, etc.,
 unless MCI shall have received a warehouseman's waiver or a third party processor's
 waiver from such warehouseman, finisher, consignee, etc.; (ix) it is
 not subject to any license or other agreement that limits, conditions, or restricts Borrower's
 or MCI's right to sell or otherwise dispose of such Inventory; (x) is not in the Borrower's
 possession based upon consignment, guaranteed sale, or other terms by reason of which the
 payment by the Borrower may be conditional; (xi) Inventory that Borrower has returned, has
 attempted to return, is in the process of returning or intends to return to the vendor thereof;
 (xii) Inventory that does not meet or which is otherwise not in compliance with all standards
 imposed by any governmental entity with respect to such Inventory; and (xiii) is not of a
 type that MCI, in its sole and absolute discretion, has determined is not Eligible Inventory.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.16. " <u>Environmental and Social Laws</u> " means any applicable federal, state, provincial, foreign or local
 statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding
 and enforceable written policy, or rule of common law now or hereafter in effect and in each
 case as amended, or any judicial or administrative interpretation thereof, including any
 judicial or administrative order, consent decree or judgment, in each case, to the extent
 binding on Borrower, relating to (i) the environment, the effect of the environment on employee
 health or safety, or hazardous materials, (ii) pollution or protection of the environment,
 including related laws or regulations relating to public access to information and participation
 in decision-making; (iii) public health, safety and security; and/or (iv) resettlement or
 economic displacement of persons, and any state and local or foreign counterparts or equivalents,
 in each case as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.17. " <u>Equipment</u> "
 means all of Borrower's present and hereafter acquired machinery, machine tools, motors,
 equipment, furniture, furnishings, fixtures, motor vehicles, tools, parts, dies, jigs, goods,
 and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements,
 substitutions, additions and improvements thereto, wherever located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.18. " <u>Event of Default</u> " means the occurrence
of any one of the events set forth in Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.19. " <u>Existing Indebtedness</u> " means all Indebtedness of Borrower under that certain Business Loan
 Agreement dated on or about April 5, 2022, between Borrower and Zions Bancorporation, N.A.
 DBA Zions First National Bank, as a lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.20. " <u>Filters Reserve</u> " means the reserve established by MCI against the Borrowing Base which
 shall reflect the reserve established by the auditors in the Borrower's Book on account
 of the portion of the inventory which is nasal screen filters acquired by Borrower from First
 Defense Nasal Screen Corp. (such portion of inventory, the " <u>Nasal Screen Filters</u> ").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.21. " <u>GAAP</u> "
 means generally accepted accounting principles set forth in the opinions and pronouncements
 of the Accounting Principles Board of the American Institute of Certified Public Accountants
 and statements and pronouncements of the Financial Accounting Standards Board that are applicable
 to the circumstances as of the date of determination and applied on a consistent basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.22. " <u>General Intangibles</u> " means all of Borrower's present and future general intangibles
 and all other presently owned or hereafter acquired intangible Personal property of Borrower
 (including, without limitation, any and all choses or things in action, payment intangibles
 (it being understood, for the avoidance of doubt, that "payment intangibles"
 includes without limitation all income, payments and proceeds thereof, owed by a credit card
 issuer or credit card processor—including without limitation the Merchant Processor—to
 Borrower resulting from charges by a customer of Borrower on credit, debit or charge cards
 issued by such credit card issuer in connection with the sale of goods by Borrower, or services
 performed by Borrower, in each case in the ordinary course of its business), software, goodwill,
 patents, trade names, trademarks, blueprints, drawings, purchase orders, customer lists,
 monies due or recoverable from pension funds, route lists, infringement claims, computer
 programs, computer discs, computer tapes, literature, reports, catalogs, deposit accounts,
 tax refunds and tax refund claims, contract rights, franchise rights and licenses) other
 than goods and Accounts, as well as Borrower's Books relating to any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.23. " <u>Governing Documents</u> " means, (a) with respect to any corporation, the certificate or articles
 of incorporation and the bylaws (or equivalent or comparable constitutive documents with
 respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company,
 the certificate or articles of formation or organization, and the operating agreement, or
 the certificate of registration and the limited liability company agreement (as applicable);
 (c) with respect to any partnership, joint venture, trust or other form of business entity,
 the partnership, joint venture, declaration or other applicable agreement or documentation
 evidencing or otherwise relating to its formation or organization, governance and capitalization;
 and (d) with respect to any of the entities described above, any other agreement, instrument,
 filing or notice with respect thereto filed in connection with its formation or organization
 with the applicable Governmental Authority in the jurisdiction of its formation or organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.24. " <u>Governing Rate</u> " shall have the meaning
set forth in Section 2.3(e).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.25. " <u>Governmental Authority</u> " means the government of the United States or any other nation, or of
 any political subdivision thereof, whether state, provincial, territorial or local, and any
 agency, authority, instrumentality, regulatory body, court, central bank or other entity
 exercising executive, legislative, judicial, taxing, regulatory or administrative powers
 or functions of or pertaining to government (including any supra-national bodies such as
 the European Union or the European Central Bank), including, without limitation the Consumer
 Finance Protection Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.26. " <u>Guarantor</u> "
 means individually, and " <u>Guarantors</u> " means collectively, the Persons and
 entities listed on <u>Schedule 1</u> as Parent Guarantor and Validity Guarantors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.27. " <u>Guaranty Agreement</u> " means, with respect to each Guarantor, each general and continuing guaranty
 in form and substance satisfactory to MCI in its sole discretion and executed and delivered
 by a Guarantor in favor of MCI for the benefit of MCI, whereby the applicable Guarantor shall
 guarantee either (i) the validity of the Loan Documents or (ii) the prompt payment and performance
 by Borrower of the Obligations, in each case subject only to such limitations as may be expressly
 provided for in the applicable Guaranty Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.28. " <u>Indebtedness</u> "
 of a Person means (a) all obligations of such Person for borrowed money, (b) all obligations
 of such Person evidenced by bonds, debentures, notes, or other similar instruments and all
 reimbursement or other obligations in respect of letters of credit, bankers acceptances,
 interest rate swaps, or other financial products, (c) all obligations of such Person as a
 lessee under capital leases, (d) all obligations or liabilities of others secured by a Lien
 on any asset of such Person or its subsidiaries, irrespective of whether such obligation
 or liability is assumed, (e) all obligations of such Person to pay the deferred purchase
 price of assets (other than trade payables incurred in the ordinary course of business and
 repayable in accordance with customary trade practices), (f) all obligations of such Person
 owing under hedge agreements, and (g) any obligation guaranteeing or intended to guarantee
 (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse)
 any obligation of any other Person that constitutes Indebtedness under any of clauses (a)
 through (f) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.29. " <u>Insolvency Proceeding</u> " means any proceeding commenced by or against any Person or entity under
 any provision of the federal Bankruptcy Code, as amended, or under any other bankruptcy or
 insolvency law, including, but not limited to, assignments for the benefit of creditors,
 formal or informal moratoriums, compositions or extensions generally with its creditors,
 or proceedings seeking reorganization, arrangement, or other similar relief.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.30. " <u>Inventory</u> "
 means such term as defined in the Code in effect in the State of New York and includes, without
 limitation, all of Borrower's present and future inventory in which Borrower has any
 interest, including, but not limited to, goods held for sale or lease or to be furnished
 under a contract of service and all of Borrower's present and future raw materials,
 work in process, finished goods, shelving and racking upon which the Inventory is stored,
 and packing and shipping materials, wherever located, and any documents of title representing
 any of the above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.31. " <u>Investment Property</u> " means Investment Property
as defined in the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.32. " <u>Judicial Officer or Assignee</u> " means any trustee, receiver, controller, custodian, assignee
 for the benefit of creditors or any other Person or entity having powers or duties like or
 similar to the powers and duties of a trustee, receiver, controller, custodian or assignee
 for the benefit of creditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.33. " <u>Labor Laws</u> " means any applicable federal, state, provincial, foreign or local statute,
 law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable
 written policy, or rule of common law now or hereafter in effect and in each case as amended,
 or any judicial or administrative interpretation thereof, including any judicial or administrative
 order, consent decree or judgment, in each case, to the extent binding on Borrower, relating
 to labor, international labor organizations conventions and treaties which have been ratified
 by the Borrower's jurisdiction, prohibition of all forms of forced or compulsory labor,
 occupational health and safety, prohibition of child labor, elimination of discrimination
 in respect of employment or occupation, and any state and local or foreign counterparts or
 equivalents, in each case as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.34. " <u>Letter of Credit Rights</u> " means Letter of Credit Rights as defined in the Code, whether
 or not the letter of credit is evidenced by a writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.35. " <u>Lien</u> "
 means any interest in an asset securing an obligation owed to, or a claim by, any Person
 other than the owner of the asset, irrespective of whether (a) such interest is based on
 the common law, statute, or contract, (b) such interest is recorded or perfected, and (c)
 such interest is contingent upon the occurrence of some future event or events or the existence
 of some future circumstance or circumstances. Without limiting the generality of the foregoing,
 the term "Lien" includes the lien or security interest arising from a mortgage,
 deed of trust, deed to secure debt or other lien instrument covering real property, encumbrance,
 pledge, hypothecation, assignment, deposit arrangement, security agreement, conditional sale
 or trust receipt, or from a lease, consignment, or bailment for security purposes and also
 includes reservations, exceptions, encroachments, easements, rights-of-way,
 covenants, conditions, restrictions, leases, and other title exceptions and encumbrances
 affecting real property.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.36. " <u>Loan Account</u> " shall have the meaning set
forth in Section 2.3(m).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.37. " <u>Loan Documents</u> " means collectively this Agreement and any other agreements entered into
 between Borrower and MCI in connection with this Agreement, including but not limited to
 the Guaranty Agreements, any Control Agreements, the Subordination Agreement, any landlord
 consents and/or lien subordination agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.38. " <u>Lock Box</u> " means that certain post office box maintained on behalf of MCI (as described
 on <u>Schedule 1</u>) into which the Borrower shall have instructed all of its Account Debtors
 to remit payments, except that those payments can be remitted directly to the Lock Box Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.39. " <u>Lock Box Account</u> " means (a) that certain account on deposit with bank Zions Bancorporation,
 N.A. dba Zions Bank identified as account no. ending in 6822, in the name of Borrower and
 such accounts at any other bank as may supersede that account after the date hereof, which
 account(s) shall at all times subject to a control agreement, lockbox, blocked account, Deposit
 Account Control Agreement (DACA) or similar arrangements (each a " <u>Control Agreement</u> ")
 in favor of MCI; or (b) any other deposit account or securities account consented to in writing
 by MCI and for which prior to the establishment hereof, the Borrower, MCI and the institution
 at which such account is to be established have entered into a Control Agreement, in both
 cases under (a) and (b) above, into which all proceeds of Accounts, General Intangibles and
 other Collateral and all other payments received in the Lock Box will be deposited and if
 no Lock Box is required by MCI, then the Lock Box Account will be the only direct depository
 for all proceeds of Accounts, General Intangibles, other Collateral and all other payments
 received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.40. " <u>Material Adverse Change</u> " means (a) a material adverse change in the business, operations,
 results of operations, assets, liabilities or condition (financial or otherwise) of Borrower,
 (b) a Material Adverse Change in the business, operations, results of operations, assets,
 liabilities or condition (financial or otherwise) of the Parent Guarantor and such Guarantor's
 subsidiaries, taken as a whole, (c) a material impairment of Borrower's ability to
 perform its respective obligations under the Loan Documents or of MCI's ability to
 enforce the Obligations or realize upon the Collateral (other than as a result of an action
 taken or omission that is solely in the control of MCI), or (d) a material impairment of
 the enforceability or priority of the MCI's liens with respect to the Collateral (other
 than non- material portions of the Collateral) or the validity or enforceability
 of the Loan Documents (other than as a result of an action taken or omission that is solely
 in the control of MCI).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.41. " <u>MCI Expenses</u> " means all of the following: (i) Taxes and insurance premiums required
 to be paid by Borrower under this Agreement or any of the other Loan Documents which are
 paid or advanced by MCI; (ii) filing, recording, publication and search fees paid or incurred
 by MCI and reasonable out-of-pocket fees or charges paid or incurred by MCI's transactions
 with any Guarantor, Borrower, or any of their respective subsidiaries under any of the Loan
 Documents, including, fees or charges for photocopying, notarization, couriers and messengers,
 telecommunication, environmental audits, fees and charges of MCI (without duplication) imposed
 or incurred in connection with any background checks or OFAC/PEP searches related to any
 Guarantor, Borrower or their respective subsidiaries and parent companies; (iii) MCI's
 customary fees and charges with respect to the disbursement of funds (or receipt of funds)
 to or for the account of Borrower (whether by wire transfer, ACH or otherwise), together
 with any reasonable out-of-pocket costs and expenses incurred in connection therewith; and
 (iv) the costs, fees (including reasonable attorneys' and paralegals' fees) and
 expenses incurred by or charged to MCI: (a) to examine Borrower and the Collateral, including
 but not limited to all costs and expenses incurred in connection with examinations and appraisals
 of Borrower's Books, records and assets and such other matters as MCI shall deem reasonable
 and appropriate and subject to the rights and limitations set forth in Section 4.3; (b) to
 correct any default or enforce any provision of this Agreement, any of the other Loan Documents
 and any guaranty of the Obligations, whether or not litigation is commenced; (c) in connection
 with any litigation, contest, dispute, suit, proceeding or action (whether instituted by
 MCI; Borrower or any other Person) in any way relating to the Collateral, this Agreement
 or any of the other Loan Documents or Borrower's affairs; (d) in connection with any
 attempt to enforce any rights of MCI against Borrower or any other Person which may be obligated
 to MCI by virtue of this Agreement or any of the other Loan Documents, including any Account
 Debtor or guarantor of Borrower's Obligations; (e) during the continuation of an Event
 of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping,
 selling, preparing for sale and/or advertising to sell the Collateral, whether or not a sale
 is consummated; (f) in collecting the Accounts and in collecting the Obligations, whether
 from Borrower, Account Debtors, any Guarantor and/or obligor; (g) in structuring, drafting,
 reviewing, amending, defending or concerning this Agreement or any of the other Loan Documents;
 (h) in connection with the administration of this Agreement or any of the other Loan Documents
 and the transactions contemplated hereby and thereby; (i) in connection with any consultations
 regarding this Agreement or any other Loan Documents or preparation therefore, or the financing
 extended hereunder; (j) in connection with any attempt to inspect, verify, protect, preserve,
 perfect or continue the perfection of MCI's Liens upon, restore, collect, sell, liquidate
 or otherwise dispose of or realize upon the Collateral; (k) relative to third party claims
 or any other lawsuit or adverse proceeding paid or incurred by MCI, whether in enforcing
 or defending the Loan Documents or otherwise in connection with the transactions contemplated
 by the Loan Documents, MCI's Liens in and to the Collateral, or MCI's relationship
 with any Guarantor, Borrower or any of their respective subsidiaries or parent companies.
 To the extent that MCI Expenses include legal fees and expenses, such legal fees and expenses
 shall be limited to the reasonable and documented fees and out-of-pocket charges and disbursements
 of counsel to MCI.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.42. " <u>Maximum Credit Line</u> " has the meaning set
forth on <u>Schedule 1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.43. " <u>Merchant Processor</u> " means an entity reasonably
acceptable to MCI, that agrees, pursuant to a Merchant Processing Agreement or otherwise, to process the credit card, debit cards, or
other sales of Borrower and direct all amounts received for the credit card sales to the account that MCI designates in writing or pursuant
to a tri-party agreement reasonably acceptable to MCI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.44. " <u>Merchant Processing Agreement</u> " means the agreement between Merchant Processor and Borrower
 pursuant to which Merchant Processor agrees to process all electronic payments including
 credit and debit cards and agrees to remit such amounts as determined by MCI in accordance
 with the terms thereof and hereof, together with all other instruments, documents, and agreements
 executed in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.45. " <u>Negotiable Collateral</u> " means all of Borrower's present and future letters of credit,
 advises of credit, letter of credit rights, notes, drafts, instruments, documents, leases,
 and chattel paper (including, without limitation, electronic chattel paper), and Borrower's
 Books relating to any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.46. " <u>Net Orderly Liquidation Value" or "NOLV</u> " means the orderly liquidation
 value of Eligible Inventory of Borrower determined pursuant to an appraisal performed by
 an appraiser satisfactory to MCI, which appraisal shall include, without limitation, as a
 factor in the determination of orderly liquidation value, net of projected costs and expenses
 normally incurred in the conduct of a liquidation of all or any portion of the Eligible Inventory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.47. " <u>Net Worth</u> " means, as of any date, the total assets of Borrower minus the total liabilities
 of Borrower calculated in conformity with GAAP.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.48. " <u>Obligations</u> "
 means any and all loans, Advances, debts, liabilities (including, without limitation, any
 and all amounts charged to Borrower's account pursuant to any agreement authorizing
 MCI to charge Borrower's account), obligations, lease payments, guaranties, covenants
 and duties owing by Borrower to MCI of any kind and description (whether advanced pursuant
 to or evidenced by this Agreement, any of the other Loan Documents, or any other instrument,
 or by any other agreement between MCI and Borrower and whether or not for the payment of
 money), whether direct or indirect, absolute or contingent, due or to become due, now existing
 or hereafter arising, and including, without limitation, any debt, liability or obligation
 owing from Borrower to others which MCI may have obtained by assignment or otherwise, and
 further including, without limitation, all fees as determined on <u>Schedule 1</u>, interest
 not paid when due and all MCI Expenses which Borrower is required to pay or reimburse by
 this Agreement, by law, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.49. " <u>Over Advance</u> " shall have the meaning set
forth in Section 2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.50. " <u>Parent Guarantor</u> " shall have the meaning
set forth on <u>Schedule 1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.51. " <u>Payment Items</u> " means all checks, wire transfers, drafts and other items of payment payable
 to the Borrower, including proceeds of any of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.52. " <u>Person</u> "
 means natural persons, corporations, limited liability companies, limited partnerships, general
 partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business
 trusts, or other organizations, irrespective of whether they are legal entities, and governments
 and agencies and political subdivisions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.53. " <u>Request for Advance</u> " means a written request by the Borrower for an Advance from MCI hereunder,
 which Request for Advance shall include, a Borrowing Base Certificate with content and form
 reasonably acceptable to MCI and reasonable supporting documents which may include without
 limitation, invoices and proof of delivery to Account Debtors, invoices for the purchase
 of Inventory, proof of delivery of the purchased Inventory, proof of payment by the Borrower
 for such Inventory and such other documents as MCI shall require from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.54. " <u>SOFR</u> "
 means the per annum rate equal to the secured overnight financing rate for such Business
 Day as published by CME Group Benchmark Administration Limited (" <u>CBA</u> ")
 from time to time, on the website of the CBA currently at <u>https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html</u> (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to
 time). The SOFR may not be the lowest or best rate at which MCI calculates interest or extends
 credit.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.55. " <u>Subordination Agreement</u> " means that certain Subordination Agreement by and between Borrower,
 Cardinal Health 110, LLC, and MCI entered into on or about the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.56. " <u>Subordinating Creditor</u> " means collectively, the Persons and entities listed <u>on Schedule 1</u> as Subordinating Creditor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.57. " <u>Subordinated Debt</u> " means all of the indebtedness
owed by Borrower to any third parties, including the Subordinating Creditor, the repayment of which is subordinated to the repayment
of the Obligations pursuant to the terms of a subordination agreement approved by MCI in its sole and absolute discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.58. " <u>Supporting Obligations</u> " means Supporting Obligations as defined in the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.59. " <u>Tangible Net Worth</u> " means an amount equal to the stockholders' equity of the Borrower
 increased by Subordinated Debt and decreased by intangible assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.60. " <u>Taxes</u> "
 means any taxes, levies, imposts, duties, fees, assessments or other charges of whatever
 nature now or hereafter imposed by any Governmental Authority (but excluding any tax imposed
 by any Governmental Authority measured by or based on the net income or net profits of MCI)
 and all interest, penalties or similar liabilities with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.61. " <u>Term</u> " shall have the meaning set forth
on <u>Schedule 1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.62. " <u>Term SOFR</u> ", means, for the applicable corresponding tenor, the one-month forward-looking
 term based on SOFR that has been selected or recommended by the CBA or any successor
thereto, in effect as of the date of the respective Advances made to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.63. " <u>Termination Fee</u> " means: (a) 2% of the Maximum Credit Line if the Agreement is terminated between
 the Closing Date and a date that is one year after the Closing Date; (b) 1% of the Maximum
 Credit Line if the Agreement is terminated thereafter; or (c) zero if the Agreement is terminated
 because Borrower has secured conventional bank financing *<u>provided that</u>* Borrower
 sends MCI the bank's commitment letter together with the notice of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.64. " <u>Unrestricted Cash</u> " means all cash and Cash Equivalents of Borrower that, (a) would not be required
 to appear as "restricted" on a consolidated balance sheet of Borrower and (b) is not controlled by or subject to any Lien in favor of any Person other than
 Liens created under this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.65. " <u>Validity Guarantors</u> " has the meaning set
forth on <u>Schedule 1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.66. " <u>Value</u> "
 means with reference to the value of Collateral, value determined on the basis of: (a) for
 Eligible Accounts, the invoice amount less known offsets, dilution and any other invoice
 reduction actual or anticipated by MCI and (b) for Eligible Inventory, the lesser of (i)
 the Net Orderly Liquidation Value of such Eligible Inventory, or (ii) the cost of finished
 goods in respect of such Eligible Inventory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.67. " <u>Working Capital</u> " means the amount determined by subtracting the aggregate amount of Borrower's
 current liabilities from the aggregate amount of Borrower's current assets. Borrower's
 current liabilities and current assets shall be determined in accordance with GAAP consistently
 applied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.68. Other
 Definitional Provisions. References to "Sections", "subsections",
 and "Exhibits" shall be to Sections, subsections, and Exhibits, respectively,
 of this Agreement unless otherwise specifically provided. Any of the terms defined in Section
 1 may, unless the context otherwise requires, be used in the singular or the plural depending
 on the reference. In this Agreement, words importing any gender include the other genders;
 the words "including," "includes" and "include" shall
 be deemed to be followed by the words "without limitation"; references to agreements
 and other contractual instruments shall be deemed to include subsequent amendments, assignments,
 and other modifications thereto, but only to the extent such amendments, assignments and
 other modifications are not prohibited by the terms of this Agreement; references to any
 Person includes their respective permitted successors and assigns or people succeeding to
 the relevant functions of such Persons; and all references to statutes and related regulations
 shall include any amendments of same and any successor statutes and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;2. <u>LOANS AND TERMS OF PAYMENT.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>2.1.</u> <u>Manner of Borrowing Advances (revolving loans)</u>. Borrowings
under the credit facility established hereunder shall be as follows and subject to the terms and conditions and relying upon the representations
and warranties herein set forth:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. Advance Requests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A
 Request for Advance (also known as a revolving loan) shall be made, or shall be deemed to
 be made, in the following manner: Borrower may give MCI notice of its intention to borrow,
 in which notice, Borrower shall specify the amount of the proposed borrowing and the proposed
 borrowing date, no later than 11:00 AM (Eastern Time) on the day preceding the proposed borrowing
 date, and shall provide an updated Borrowing Base Certificate at the time of each request
 for an Advance. MCI may make advances to Borrower (each, an " <u>Advance</u> "),
 in MCI's sole and absolute discretion, up to the Borrowing Base and not to exceed the
 Maximum Credit Line. Amounts borrowed pursuant to this Section 2.1(a) may be repaid and,
 subject to the terms and conditions of this Agreement, reborrowed at any time during the
 term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding
 the foregoing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The
 aggregate principal amount of the outstanding balance at any time to the Borrower shall not
 exceed the Maximum Credit Line, *<u>provided</u>* , *<u>however</u>* , that if, at
 any time of for any reason, there is an Over Advance (as defined below), Borrower shall immediately
 pay to MCI, in cash, the amount of such excess.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. No
 such Request for Advance may be made (i) at a time when there exists an Event of Default;
 or (ii) unless payment is timely made by Borrower; *provided, however*, that if payment
 is not timely made by Borrower, the becoming due of any amount required to be paid under
 the Loan Documents as principal, accrued interest, fees, MCI Expenses or other charges shall
 be deemed, at MCI's option, to be an irrevocable Request for an Advance in an aggregate
 amount required to pay such amounts owed, and the proceeds of each such Advance or revolving
 loan may be disbursed by MCI by way of direct payment of the relevant Obligation and shall
 bear interest at the rate of interest applicable to the Daily Balance, for any amount required
 to be paid under this Agreement or any of the other Loan Documents, as principal, accrued
 interest, fees or MCI Expenses (" <u>Direct Payment</u> ").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. As
 an accommodation to Borrower, MCI may permit electronic transmittal of instructions or requests
 for Advances, authorizations, agreements or reports to MCI by Borrower, received from any
 one or more of the authorized officers or other Personnel of the Borrower identified on <u>Exhibit B</u> hereto. Pursuant to the terms hereof, Borrower will deliver to MCI, from time to time,
 Requests for Advances and authorized signature cards from Borrower to MCI to indicate which
 of Borrower's employees and officers are authorized to provide and request information,
 including Advances from MCI on behalf of the Borrower, all of which is subject to the procedures
 set forth herein. The Borrower specifically requests that MCI agree to accept any facsimile
 signature on any Requests for Advances, authorized signature card or any notice which MCI
 in its sole discretion believes to have been sent or forwarded to MCI by one of the Borrower's
 authorized officers or employees. The Borrower hereby agrees to follow up any of said facsimile
 transmissions with the original of same no later than the next business day following any
 such facsimile transmission. In addition to the other indemnifications set forth herein,
 the Borrower hereby indemnifies and holds all Indemnitees (as defined below) harmless from
 and against any and all claims, demands, losses, liabilities, actions, lawsuits and other
 proceedings, judgments and awards, and from costs and expenses (including without limitation
 reasonable attorney's fees) arising directly or indirectly, in whole or in part, out
 of the negligence, willful misconduct, misuse or unlawful or unauthorized use of any facsimile
 message or, facsimile signature or signatures of any Person or Persons, including the Borrower
 or its partners, officers, directors, agents or employees, whether within or beyond the scope
 of such individual's duties or authority thereunder. Further, the Borrower agrees to
 assume full responsibility for any and all Advances and actions taken by MCI in reliance
 upon any facsimile transmission or, facsimile signature or signatures of any Person or Persons,
 including the Borrower or its partners, officers, directors, agents or employees, signing
 on behalf of the Borrower. Borrower agrees that MCI shall not be responsible for any communication
 or miscommunication by any individual claiming to or which MCI in its discretion believes
 to have proper authority to give any facsimile transmission. Unless Borrower specifically
 directs MCI in writing not to accept or act upon telecopied or electronic communications
 from Borrower, MCI shall have no liability to Borrower for any loss or damage suffered by
 Borrower as a result of MCI's honoring of any requests, execution of any instructions,
 authorizations or agreements or reliance on any reports communicated to MCI electronically
 and purporting to have been sent to MCI by Borrower and MCI shall have no duty to verify
 the origin of any such communication or the authority of the Person sending it.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. All of the Advances made pursuant to this Section 2.1 and any supplement, if any, to this Agreement shall be added to and deemed part
of the Obligations when made. If, at any time and for any reason, the amount of Advances made pursuant to Section 2.1 and such supplement,
if any, exceed the percentage or dollar limitations set forth in Section 2.1 and in such supplement, as applicable, or if all of Borrower's
Obligations, at any time and for any reason, exceed the Maximum Credit Line or any of the limitations set forth in Section 2.1 (each,
an " <u>Over Advance</u> "), then Borrower shall immediately pay to MCI, in cash, the amount of such excess.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Reserves</u>.
 Anything to the contrary in this Section 2.1 notwithstanding, with two (2) business days
 prior written notice (which notice may be provided via email) to Borrower, MCI shall have
 the right to establish reserves in such amounts, in its reasonable discretion, shall deem
 necessary or appropriate, against the Borrowing Base, with respect to (i) sums that Borrower
 is required to pay (such as Taxes, assessments, insurance premiums, or, in the case of leased
 assets, rents or other amounts payable under such leases) and has failed to pay (beyond any
 notice or cure period) under any Section of this Agreement or any other Loan Document, (ii)
 amounts owing by Borrower and which Borrower has failed to pay (beyond any notice or cure
 period) to any Person to the extent secured by a Lien on, or trust over, any of the Collateral,
 which Lien or trust, in the reasonable discretion of MCI likely would have a priority superior
 to the MCI's Liens (such as liens or trusts (whether statutory or otherwise) in favor
 of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
 Liens or trusts (whether statutory or otherwise) for ad valorem, excise, sales, or other
 taxes where given priority under Applicable Laws) in and to such item of the Collateral,
 (iii) the valuation of Collateral securing any Accounts and Inventory pursuant to such methodologies
 and in reliance upon such appraisals, experts and other sources as MCI may find appropriate
 in its reasonable discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. <u>Disbursement</u>.
 Borrower hereby irrevocably authorizes MCI to disburse the proceeds of each Advance requested,
 or deemed to be requested, pursuant to Section 2.1 as follows: (i) the proceeds of each Advance
 requested under Section 2.1 other than Direct Payments, shall be disbursed by MCI in lawful
 money of the United States of America in immediately available funds within one business
 day of MCI having accepted such Request for Advance, in the case of the initial borrowing,
 in accordance with the terms of the written disbursement letter from Borrower, and in the
 case of each subsequent borrowing, by wire transfer or ACH transfer to
 such  ***<u>bank account</u>*** as may be agreed upon by Borrower and MCI from time
 to time or elsewhere if pursuant to a written direction from Borrower; and (ii) the proceeds
 of each Direct Payment shall be disbursed by MCI by way of direct payment of the relevant
 interest or other Obligation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. <u>Payments</u>.
 The Borrower promises to repay all Obligations when due in accordance with the terms of this
 Agreement or the other Loan Documents. All payments with respect to any of the Obligations
 shall be made to MCI on the date when due or before, in U.S. Dollars ($) and in immediately
 available funds, without any offset or counterclaim, as per the payment instructions found
 in <u>Exhibit H</u>. Except where evidenced by notes or other instruments issued or made
 by Borrower to MCI specifically containing payment provisions which are in conflict with
 this Section 2.3 (in which event the conflicting provisions of said notes or other instruments
 shall govern and control), the Obligations shall be payable as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u> <u>Principal</u>.
 Principal payable on account of Advances shall be payable by Borrower to MCI immediately
 upon the earliest of (i) the receipt by MCI or Borrower of any proceeds of any of the Collateral,
 to the extent of said proceeds, (ii) Collateral no longer being eligible for funding hereunder
 (the " <u>Ineligible Collateral</u> "), to the extent of the amount of the Ineligible
 Collateral, (iii) the occurrence of an Event of Default in consequence of which MCI elects
 to accelerate the maturity and payment of the Obligations, (iv) termination of this Agreement
 pursuant to Section 3 hereof; <u>provided</u>, <u>however</u>, that if an Over Advance condition
 shall exist at any time, Borrower shall, immediately repay the Obligations to the extent
 necessary to eliminate the Over Advance condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u> <u>Interest</u>.
 Interest accrued on the Advances shall be due and payable on the earliest of (i) the fifth
 (5th) calendar day of each month (for the immediately preceding month), computed through
 the last calendar day of the preceding month; (ii) the occurrence of an Event of Default
 in consequence of which MCI elects to accelerate the maturity and payment of the Obligations;
 and (iii) termination of this Agreement pursuant to Section 3 hereof. Interest will accrue
 on a daily basis and will be billed to the Borrower on the first (1st) of each month (for
 accruals from the previous calendar month) payable not later than the fifth (5th) of that
 month as stated above. At its option, MCI may debit such amounts, which amounts shall thereupon
 constitute Obligations hereunder and shall thereafter accrue interest at the rate then provided
 under this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u> <u>Costs, Fees and Charges</u>. MCI may collect a "late charge" equal
 to five percent (5%) of any installment of interest or principal, or of any Taxes, assessments
 and insurance paid by MCI which is not paid or reimbursed by the Borrower within ten (10)
 days of the due date thereof to cover the extra expense involved in handling such delinquent
 payment. All costs, fees charges and MCI Expenses payable pursuant to this Agreement shall
 be payable by Borrower as and when incurred, to MCI. At its option, MCI may debit such amounts,
 which amounts shall thereupon constitute Obligations hereunder and shall thereafter accrue
 interest at the rate then provided under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(d)</u> <u>Other Obligations</u>. The balance of the Obligations requiring the payment of money, if any, shall
 be payable by Borrower to MCI as and when provided in this Agreement, if no date of payment
 is otherwise specified in the Loan Documents, **ON DEMAND**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(e)</u> <u>Interest Rates</u>. All Obligations owed by Borrower to MCI shall bear interest, on the calculated
 Daily Balance owing, at a rate set forth on <u>Schedule 1</u> as the "Governing Rate".
 Upon and after the occurrence of an Event of Default and during the continuation thereof
 and upon and after judgment, all Obligations owed by Borrower to MCI shall, at the election
 of MCI, without constituting a waiver of any such Event of Default, bear interest on the
 calculated Daily Balance owing, at the Default Rate (as defined on <u>Schedule 1</u>). All
 interest chargeable under this Agreement shall be computed on the basis of a three hundred
 sixty (360) day year for actual days elapsed.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Maximum Interest</u>. Regardless of any provision contained in this Agreement or any other agreement
 or document executed in connection herewith, in no contingency or event whatsoever shall
 the aggregate of all amounts that are contracted for, charged or received by MCI pursuant
 to the terms of this Agreement or any other Loan Documents and that are deemed interest under
 Applicable Laws exceed the highest rate permissible under any Applicable Laws. No agreements,
 conditions, provisions or stipulations contained in this Agreement or any of the other Loan
 Documents or the exercise by MCI of the right to accelerate the payment or the maturity of
 all or any portion of the Obligations, or the exercise of any option whatsoever contained
 in any of the Loan Documents, or the prepayment by Borrower of any of the Obligations, or
 the occurrence of any contingency whatsoever, shall entitle MCI to charge or receive in any
 event, interest or any charges, amounts premiums or fees deemed interest by Applicable Laws
 (such interest, charges, amounts, premiums and fees referred to herein collectively as " <u>Interest</u> ")
 in excess of the maximum rate allowable under Applicable Laws and in no event shall Borrower
 be obligated to pay Interest exceeding such maximum rate, and all agreements, conditions
 or stipulations, if any, which may in any event or contingency whatsoever operate to bind,
 obligate or compel Borrower to pay Interest exceeding the maximum rate allowable under Applicable
 Laws shall be without binding force or effect, at law or in equity, to the extent only of
 the excess of Interest over such maximum rate. If any Interest is charged or received in
 excess of the maximum rate allowable under Applicable Laws (" <u>Excess</u> "),
 Borrower acknowledges and stipulates that any such charge or receipt shall be the result
 of an accident and bona fide error, and such Excess, to the extent received, shall be applied
 first to reduce the principal Obligations and the balance, if any, returned to Borrower,
 it being the intent of the parties hereto not to enter into a usurious or otherwise illegal
 relationship. The right to accelerate the maturity of any of the Obligations does not include
 the right to accelerate any interest that has not otherwise accrued on the date of such acceleration,
 and MCI does not intend to collect any unearned interest in the event of any such acceleration.
 Borrower recognizes that, with fluctuations in the rates of interest set forth in Section
 2 of this Agreement and the maximum rate of interest allowable under Applicable Laws, such
 an unintentional result could inadvertently occur. All monies paid to MCI hereunder or under
 any other Loan Documents, whether at maturity or by prepayment, shall be subject to any rebate
 of unearned interest as and to the extent required by Applicable Laws. By the execution of
 this Agreement, Borrower covenants that (i) the credit or return of any Excess shall constitute
 the acceptance by Borrower of such Excess, and (ii) Borrower shall not seek or pursue any
 other remedy, legal or equitable, against MCI, based in whole or in part upon contracting
 for, charging or receiving any Interest in excess of the maximum rate allowable under Applicable
 Laws. For the purpose of determining whether or not any Excess has been contracted for, charged
 or received by MCI, all interest at any time contracted for, charged or received from Borrower
 in connection with this Agreement and any other agreement or document executed in connection
 herewith, any of the Loan Documents shall, to the extent permitted by Applicable Laws, be
 amortized, prorated, allocated and spread in equal parts throughout the full term of the
 Obligations. Borrower and MCI shall, to the maximum extent permitted under Applicable Laws,
 (i) characterize any non-principal payment as an expense, fee or premium rather than as Interest
 and (ii) exclude voluntary prepayments and the effects thereof. The provisions of this Section
 shall be deemed to be incorporated into every Loan Document (whether or not any provision
 of this Section is referred to therein). All such Loan Documents and communications relating
 to any Interest owed by Borrower and all figures set forth therein shall, for the sole purpose
 of computing the extent of Obligations, be automatically recommitted by Borrower, and by
 any court considering the same, to give effect to the adjustments or credits required by
 this Section.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Payment of Interest</u>. All interest payable by Borrower shall be due and payable on the fifth (5th)
 day of each calendar month during the term of this Agreement and MCI shall bill Borrower
 as stated in 2.3(b) above, at its option, charge such interest and any and all MCI Expenses
 to Borrower's Loan Account with MCI, which amounts shall thereupon constitute Obligations
 hereunder and shall thereafter accrue interest at the rate then provided under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Requests for Advances, Other Required Information and Authorizations</u>. Concurrent with the delivery
 of the Requests for Advances or any other information required by MCI in connection with
 an advance (collectively the " <u>Other Information</u> "), Borrower shall provide
 a written report to MCI of all returns and all material disputes and claims, together with
 sales and other reports relating to the Accounts and Inventory as required by MCI. If Borrower
 fails to deliver to MCI the Request for Advance or the Other Information on the date when
 due, then notwithstanding any of the provisions contained in Section 2.1 or in any other
 Loan Document to the contrary, MCI shall not make any Advances to Borrower until the Request
 for Advance, or the Other Information is delivered to MCI. MCI is hereby authorized to make
 the loan and the extensions of credit provided for in this Agreement based upon emailed or
 other instructions and transaction reports received from any one of the authorized Personnel
 of Borrower identified on <u>Exhibit B</u>, or, at the discretion of MCI, if such extensions
 of credit are necessary to satisfy any Obligations of Borrower to MCI. Although MCI shall
 make a reasonable effort to determine the Person's identity, MCI shall not be responsible
 for determining the authenticity of any such telecopied instructions and MCI may act on the instructions of anyone it perceives to be one of the authorized Personnel
 identified on <u>Exhibit B</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(g)</u> <u>Collections</u>.
 Borrower shall instruct all of its Account Debtors to make payments solely to the Lock Box
 and Lock Box Account, as the case may be, as previously described. MCI or MCI's designee
 may, at any time, notify customers or Account Debtors of Borrower that the Accounts have
 been assigned to MCI and that MCI has a security interest therein, MCI may confirm the validity
 and/or amount of the Accounts, collect them directly, and charge the collection costs, if
 any, and expenses to Borrower's Loan Account, but, unless and until MCI does so or
 gives Borrower other written instructions, the collection of all the Accounts shall be made
 in accordance with the terms and conditions of this Agreement. Borrower agrees that, if for
 any reason Borrower receives, contrary to this Agreement, direct payments in connection with
 the Accounts, General Intangibles and/or any other Collateral, all such payments received
 by Borrower shall be held in trust for MCI as MCI's trustee and shall be remitted to
 MCI in kind within twenty-four (24) hours of receipt. The receipt of any wire transfer, check
 or other item of payment by MCI shall be deemed to have been paid to MCI on the Collection
 Date (as defined in Schedule 1). In the event the Borrower fails to comply with the provisions
 of this Section 2.3(g), in addition to all other remedies of MCI hereunder, Borrower shall
 pay a Misdirection Fee of 0.07% of the amount of the funds which are not remitted to MCI
 as required herein (the " <u>Misdirected Funds</u> ") for each day that the Misdirected
 Funds are not remitted to MCI. Nothing provided herein shall in any manner authorize the
 Borrower to misdirect funds as prohibited by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(h)</u> <u>Merchant Processing Agreement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. During
 the term of this Agreement, Borrower shall maintain a processing relationship for all its
 credit card and debit card sales with Merchant Processor. The Borrower shall not change or
 add a new Merchant Processor without the prior written consent of MCI and such Merchant Processor
 shall be subject to the Merchant Processing Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Borrowers
 and Merchant Processor have entered into the Merchant Processing Agreement, pursuant to which
 Merchant Processor will process the Borrower' electronic cash receipts including but
 not limited to credit card receipts and debit card receipts, and Borrower shall be at all times in full compliance with the terms of the Merchant Processor Agreement.
 Borrower shall promptly notify MCI in writing of a material default, or of any written notice
 received by Borrower of any default, under the Merchant Processor Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The
 Merchant Processor Agreement shall provide that all the amounts received for credit card
 sales to be deposited or transferred daily into the Lock Box Account or any other account
 as designated by MCI in writing and which is either in the name of MCI or subject to a Control
 Agreement for the benefit of MCI. Borrower shall not change remittance instructions to the
 Merchant Processor without the prior written consent of MCI and shall not in any way interfere
 with the notification or remittance instructions provided by MCI to Merchant Processor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(i)</u> <u>Monthly Statements</u>. MCI shall render monthly statements of the Obligations owing by Borrower
 to MCI, including statements of all principal, interest, and MCI Expenses owing, and such
 statements shall be conclusively presumed to be correct and accurate and constitute an account
 stated between Borrower and MCI unless, within thirty (30) days after receipt thereof by
 Borrower, Borrower shall deliver to MCI, by registered or certified mail, at MCI's
 address indicated in Section 13, written objection thereto specifying the error or errors,
 if any, contained in any such statement and MCI in its good faith discretion determines such
 exceptions are accurate and makes an appropriate adjustment. In the event that Borrower fails
 to receive such monthly statement for a particular month, Borrower hereby agrees and acknowledges
 that it shall likewise be obligated to notify MCI in writing no later than forty-five (45)
 days from the end of each such month. If Borrower fails to so notify MCI of same then said
 monthly statement shall be deemed to have been sent and delivered to Borrower and shall be
 final and conclusive on Borrower. At MCI's request, Borrower shall execute and deliver
 to MCI from time to time, promissory notes in form and content satisfactory to MCI to evidence
 the balances owing in Borrower's Loan Account, but notwithstanding any such request
 for or delivery of such notes, such statements of account shall be prima facie evidence of
 the loans and, to the extent intended by MCI to be included therein, other Obligations owing
 to MCI by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(j)</u> <u>Fees and Reimbursement of Expenses</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Borrower
 will pay to MCI those fees set forth on <u>Schedule 1</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Borrower
 will pay to MCI all MCI Expenses. All MCI Expenses shall be Obligations secured by all of
 the Collateral, shall be payable on demand to MCI, and shall bear interest from the date
 such demand is made until paid in full at the rate applicable to the Daily Balance from time
 to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Borrower
 shall pay to MCI, **ON DEMAND**, any and all reasonable fees, costs or expenses which
 MCI pays to a bank or other similar institution arising out of or in connection with (i)
 the forwarding to Borrower or any other Person or entity on behalf of Borrower, by MCI, of
 proceeds of Advances made by MCI to Borrower pursuant to this Agreement and (ii) the depositing
 for collection, by Borrower, of any check or item of payment received or delivered to MCI
 on account of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(k)</u> <u>Application of Payments and Collections</u>. Borrower irrevocably waives the right to direct the application
 of any and all payments and collections at any time or times hereafter received by MCI from
 or on behalf of Borrower, and Borrower does hereby irrevocably agree that MCI shall have
 the continuing exclusive right to apply and reapply any and all such payments and collections
 received at any time or times hereafter by MCI or its agent against the Obligations, in such
 manner as MCI may deem advisable. If as the result of collections of Borrower's Advances
 and Accounts a credit balance exists in the Loan Account, such credit balance shall not accrue
 interest in favor of Borrower, but shall be available to Borrower at any time or times for
 so long as no Default or Event of Default exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(l)</u> <u>All Advances to Constitute One Obligation</u>. The Advances shall constitute one general Obligation
 of Borrower and shall be secured by MCI's Lien upon all of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(m)</u> <u>Loan Account</u>. MCI shall establish an account on its books (the " <u>Loan Account</u> ")
 and shall enter all advances as debits to the Loan Account and shall also record in the Loan
 Account all payments made by Borrower on any Obligations and all proceeds of Collateral which
 are finally paid to MCI, and may record therein, in accordance with customary accounting
 practice, other debits and credits, including interest and all charges and expenses properly
 chargeable to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;3. <u>TERM AND TERMINATION</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. The Agreement will have a term equal to the Term (as defined
on <u>Schedule 1</u>).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. Borrower
 may terminate the Agreement at any time with sixty (60)-day prior written notice to MCI and
 subject to the payment of the Termination Fee. Any notice of termination by Borrower, however,
 and notwithstanding payment in full of all Obligations by Borrower, is conditioned on Borrower's
 delivery, to MCI, of a general release in a form reasonably satisfactory to MCI. MCI shall
 not be required to file or record any terminations or satisfactions of any of MCI's
 security interests unless and until Borrower and all Guarantors have executed and delivered
 to MCI said general release and Borrower shall have no authority to file or record any terminations
 or satisfactions without MCI's express written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. MCI
 may terminate this Agreement, for any or no reason, upon not less than sixty (60) days'
 prior written notice to Borrower, *<u>provided</u>* , *<u>however</u>* , that upon
 the occurrence of an Event of Default, MCI may terminate this Agreement at any time without
 notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. On
 the date of a termination by Borrower or MCI, all Obligations shall become immediately due
 and payable without notice or demand and shall be paid to MCI in cash or by a wire transfer
 of immediately available funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. Notwithstanding
 anything to the contrary, any termination of the Agreement shall not affect MCI's security
 interest and its right to collect any Accounts, Inventory and the rest of the Collateral,
 and the Agreement shall continue to be effective, until all Obligations incurred hereunder
 have been completed and satisfied in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6. Notice
 of termination by Borrower or MCI under this Section 3 shall be effectuated by (i) the mailing
 of a certified letter, return receipt requested or (ii) email correspondence provided that
 such email correspondence is a scan or a portable document format file or equivalent (also
 known as a "PDF file") of a letter written on the letterhead of the party providing
 the notice, in which case it shall have been deemed to be duly given upon receipt by the
 recipient via email which provides proof of receipt or at the time shown in any type of delivery
 confirmation report, at the email addresses as set forth below or at the email addresses
 that the parties shall designate by written notice to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;4. <u>CREATION OF SECURITY INTEREST</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Grant of Security Interest</u>. Borrower hereby grants to MCI a continuing security interest in
 all of Borrower's right, title and interest in all presently existing and hereafter
 acquired or arising Collateral in order to secure prompt repayment of any and all Obligations
 owed by Borrower to MCI and in order to secure prompt performance by Borrower of each and
 all of its covenants and obligations under this Agreement and otherwise created. MCI's security interest in the Collateral shall attach to all Collateral without further
 act on the part of MCI or Borrower. In the event that any Collateral, including proceeds,
 is evidenced by or consists of Negotiable Collateral, Borrower shall, immediately upon written
 request therefore from MCI, endorse and assign such Negotiable Collateral over to MCI and
 deliver actual physical possession of the Negotiable Collateral to MCI.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. <u>Collection of Accounts, General Intangibles, and Negotiable Collateral</u>. At any time after the occurrence
 and during the continuation of an Event of Default, MCI or MCI's designee may notify
 Account Debtors and/or obligors of Borrower that Borrower's Accounts, chattel paper,
 or General Intangibles have been assigned to MCI or that MCI has a security interest therein.
 Borrower agrees that it will hold in trust for MCI, as MCI trustee, any of its collections
 that are Collateral that it receives and immediately will deliver such collections to MCI.
 Borrower further agrees that it will, without compensation of any nature from MCI, take all
 actions necessary to assist MCI or any of its designees in taking possession of and/or collecting,
 as applicable, Borrower's Accounts, chattel paper, or General Intangibles, all as more
 fully set forth in this Agreement. Borrower acknowledges that its undertaking herein is a
 material inducement for MCI to enter into, and make Advances under, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. <u>Right to Examine and Inspect</u>. In order to verify the validity of any Request for Advance and
 from time to time hereafter, Borrower shall, upon the request of MCI, upon not less than
 48 hours advance written notice to Borrower (unless there is an Event of Default which is
 continuing in which case request may be immediate), promptly furnish MCI and/or any MCI employee,
 officer, agents or other designees or professionals selected by MCI, with Borrower's
 financial, accounting, accounts receivable, invoicing records, inventory and all other Collateral
 and supporting documents, and with copies of Borrower's purchase orders, sales journals,
 invoices, chattel paper, customer's purchase orders, or the equivalent, and original
 shipping or delivery receipts for all Inventory purchased and goods sold, and Borrower shall
 warrant the genuineness thereof. In addition, MCI shall be entitled to: (i) from time to
 time after an Event of Default has occurred and is continuing to communicate directly with
 any and all Account Debtors to verify the existence and terms thereof; (ii) from time to
 time but it no case less than quarterly and upon not less than 48 hours advance written notice
 to Borrower (unless there is an Event of Default which is continuing in which case no notice
 shall be required), conduct or have any agent, employee, officer, designee or third party
 to conduct field examinations of Borrower's Books, business operations, Inventory,
 Borrower's financial, accounting, accounts receivable, invoicing records, and all other
 Collateral and supporting documents and to check and test the same as to quality, quantity,
 value and condition (" <u>Field Exams</u> ") and (iii) from time to time but in
 no case less than annually and upon not less than 48 hours advance written
 notice to Borrower (unless there is an Event of Default which is continuing in which case
 no notice shall be required), check, test, and appraise the Collateral or any portion thereof,
 in order to verify any of Guarantors' and Borrower's financial condition or the
 amount, quality, value, condition of, or any other matter relating to, the Collateral (" <u>Appraisals</u> ").
 Borrower shall reimburse or pay to MCI all costs, expenses and charges incurred by MCI in
 the exercise of the foregoing provisions, (a) at any time from and after the occurrence and
 during the continuance of an Event of Default, and (b) at all other times, with respect to
 four (4) Field Exams in a twelve-month period and to one (1) Appraisal in a twelve-month
 period, and the amount charged shall be deemed included in the "Obligations"
 when incurred, and shall thereafter accrue interest at the rate then provided under this
 Agreement, and at MCI's option, may be charged as an Advance hereunder. The Field Exams
 and Appraisals may be "desktop" or "in-Person" as determined by MCI
 in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4. <u>Setoff</u>. All sums at any time standing to the Borrower's
credit on the MCI's books and all of the Borrower's property at any time in the MCI's possession, or upon or in which
MCI has a lien or security interest shall be security for all Obligations. In addition to and not in limitation of the above, with respect
to any deposits or property of the Borrower in MCI's possession or control, now or in the future, MCI shall have the right to setoff
all or any portion thereof, at any time, against any Obligations hereunder, even though unmatured, without prior notice or demand to
the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5. <u>Continuation of Security Interest</u>. Notwithstanding termination
of this Agreement, until all Obligations, contingent or otherwise, have been fully repaid and performed, MCI shall retain its security
interest in all presently owned and hereafter arising or acquired Collateral, and Borrower shall continue to immediately deliver to MCI,
in kind, all collections received respecting the Accounts.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6. <u>Perfection of Security Interest</u>. Borrower shall execute
or authenticate and deliver to MCI, concurrent with Borrower's execution of this Agreement, and at any time or times hereafter
at the request of MCI, and does hereby authorize MCI on its behalf to file, all financing statements, continuation financing statements,
security agreements, assignments, endorsements, affidavits, reports, notices, schedules of accounts, letters of authority and all other
documents that MCI may reasonably request, in form satisfactory to MCI, to perfect and maintain perfected MCI's security interests
in the Collateral and in order to fully consummate all of the transactions contemplated under this Agreement. MCI may at any time and
from time to time, file financing statements, continuation statements and amendments thereto that describe the Collateral as all assets
of the Borrower or words of similar effect and which contain any other information required by Part 5 of Revised Article 9 of the Code
(" <u>RA9</u> ") for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment,
including whether the Borrower is an organization, the type of organization and any organization identification number issued to the
Borrower. The Borrower agrees to furnish any such information to MCI promptly upon request. Any such financing statements, continuation
statements or amendments may be signed or authenticated by MCI on behalf of the Borrower, as provided in Section 4.8, and may be filed
at any time in any jurisdiction whether or not RA9 is then in effect in that jurisdiction. The Borrower shall at any time and from time
to time, whether or not RA9 is in effect in any particular jurisdiction, take such steps as MCI may reasonably request for MCI (a) to
obtain an acknowledgment, in form and substance satisfactory to MCI, of any bailee having possession of any of the Collateral that the
bailee holds such Collateral for MCI, (b) to obtain "control" of any investment property, deposit accounts, letter-of-credit
rights or electronic chattel paper (as such terms are defined in RA9 with corresponding provisions in Sections 9-104, 9-105, 9-106 and
9-107 relating to what constitutes "control" for such items of Collateral), with any agreements establishing control to be
in form and substance satisfactory to MCI, and (c) otherwise to insure the continued perfection and priority of MCI's security
interest in any of the Collateral and of the preservation of its rights therein, whether in anticipation and following the effectiveness
of RA9 in any jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7. <u>Access to Borrower's Books</u>. MCI (through any of
its officers, employees or agents) shall have the right, at any time or times hereafter and upon not less than 48 hours advance written
notice to Borrower (unless there is an Event of Default which is continuing in which case no notice shall be required), during Borrower's
usual business hours, or during the usual business hours of any third-party having control over the records of Borrower, to inspect and
verify Borrower's Books in order to verify the amount or condition of, or any other matter relating to, the Collateral and Borrower's
financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8. <u>Power of Attorney</u>. Borrower hereby irrevocably makes,
constitutes and appoints MCI (and any of MCI's officers, employees or agents designated by MCI) as Borrower's true and lawful
attorney with power:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To sign or authenticate
the name of Borrower on any of the documents described in Section 4.6 or on any other similar documents which need to be executed, recorded
and/or filed in order to perfect or continue perfected MCI's security interest in the Collateral;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To
 endorse Borrower's name on any checks, notes, acceptances, money orders, drafts or
 other forms of payment or security that may come into MCI's possession;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) After
 the occurrence of an Event of Default, to notify the post office authorities to change the
 address for delivery of Borrower's mail to an address designated by MCI, to receive
 and open all mail addressed to Borrower, and to retain all mail relating to the Collateral
 and forward, within two (2) business days of MCI's receipt thereof, all other mail
 to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) At
 any time that an Event of Default is continuing, make, settle, and adjust all claims under
 such Borrower's policies of insurance and make all determinations and decisions with
 respect to such policies of insurance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Settle
 and adjust disputes and claims respecting Borrower's Accounts, chattel paper, or General
 Intangibles directly with Account Debtors and applicable financial institutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To
 do all things to carry out this Agreement and the Loan Documents.

The appointment of MCI as Borrower's attorney, and each and every one of MCI's rights and powers, being coupled with an interest, are irrevocable so long as any Accounts in which MCI has a security interest remain unpaid and until all of the Obligations have been fully paid and performed. The Borrower ratifies and approves all acts of the attorney. Neither MCI nor its employees, officers or agents shall be liable for any acts or omissions or for any error in judgment or mistake of fact or law made in good faith except for gross negligence or willful misconduct. MCI may file one or more financing statements disclosing MCI's security interest without the Borrower's signature appearing thereon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9. <u>Sale of Inventory</u>. Until the occurrence of an Event of Default by Borrower under this Agreement,
 Borrower may, subject to the provisions hereof and consistent herewith, sell or lease the
 Inventory, but only in the ordinary course of Borrower's business. A sale or lease
 of Inventory in Borrower's ordinary course of business does not include an exchange
 or a transfer in partial or total satisfaction of a debt owing by Borrower, nor does it include
 an exchange for less than reasonably equivalent value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10. <u>Commercial Tort Claims</u>. If the Borrower shall at any time acquire a commercial tort claim, as defined
 in the Code, the Borrower shall immediately notify MCI in a writing signed by the Borrower
 of the brief details thereof and grant to MCI in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with
 such writing to be in form and substance satisfactory to MCI.

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&nbsp;&nbsp;&nbsp;&nbsp;5. <u>CONDITIONS PRECEDENT AND SUBSEQUENT</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. <u>Conditions Precedent to the Initial Advance</u>. The initial Advance by MCI hereunder or any other Loan
 Documents, is subject to the fulfillment, to the satisfaction of MCI in its sole option,
 of each of the following conditions precedent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. MCI
 shall have received and be satisfied with financing statements (form UCC-1) in form satisfactory
 for filing and recording with the appropriate Governmental Authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. MCI
 shall have received and be satisfied with certified extracts from the minutes of the meetings
 or written consents (as applicable) of Borrower's members and/or managers or board
 of directors (i) authorizing the execution, delivery and performance of the Loan Documents,
 (ii) authorizing borrowings and the granting of the security interest provided for herein,
 (iii) authorizing specific officers to execute and deliver the agreements provided for herein,
 and (iv) attesting to the incumbency and signatures of such specific officers or directors
 of such Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. MCI
 shall have received and be satisfied with a certified copy of Borrower's Governing
 Documents and any amendments thereto, a certificate of good standing showing that Borrower
 is in good standing under the laws of the State of its formation and certificates indicating
 that Borrower has qualified to transact business and is in good standing in any other state
 in which the conduct of its business or its ownership of property requires that it be so
 qualified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. MCI
 shall have received and be satisfied with MCI's business, legal and collateral due
 diligence and received copies of record searches including UCC searches, tax Lien and litigation
 searches, fictitious business statement filings, insurance certificates, notices or other
 similar documents which MCI may require and in such form as MCI may require, in order to
 reflect, perfect or protect the priority of MCI's security interests in the Collateral
 and in order to fully consummate all of the transactions contemplated under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. MCI
 shall have received completed reference checks (including Personal credit reports, tax lien
 and litigation histories) with respect to Borrower, its affiliates and each of the executive officers, the results of which are satisfactory to MCI in its sole
 discretion;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Borrower
 shall have paid all MCI Expenses incurred in connection with the transactions evidenced by
 this Agreement and all fees payable on the Closing Date in accordance with this Agreement,
 in each case, to the extent then due and payable as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. MCI
 shall have received and be satisfied with a fully completed Request for Advance, dated as
 of the date of any requested funding, and certified as being true and correct by any one
 of the Authorized Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. Borrower
 shall have received all licenses, approvals or evidence of other actions required by any
 Governmental Authority in connection with the execution and delivery by Borrower of the Loan
 Documents or with the consummation of the transactions contemplated thereby or for the conduct
 of their respective businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. MCI
 shall have received satisfactory evidence that all tax returns required to be filed by Borrower
 have been timely filed and all Taxes upon Borrower or its respective properties, assets,
 income, and franchises (including real property taxes, sales taxes, and payroll taxes) have
 been paid prior to delinquency, except such Taxes that are the subject of a protest which
 has been instituted promptly and prosecuted diligently in good faith by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. Evidence
 satisfactory to MCI that Borrower has obtained insurance policies or binders, with such insurers
 and in such amounts as may be acceptable to MCI, respecting the tangible Personal property
 comprising the Collateral and naming MCI as a loss payee on a MCI's loss payee endorsement
 acceptable to MCI in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. MCI
 shall have received a payoff letter executed by each Person holding the Liens securing the
 Existing Indebtedness, which letter shall include an agreement by such Person, upon receipt
 of a specified amount, to release such Liens, and which letter shall otherwise be in form
 and substance satisfactory to MCI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. MCI
 shall have received and be satisfied with a Control Agreement over the Lock Box Account in
 form reasonably acceptable to MCI, from Zions Bancorporation, N.A. dba Zions Bank, or any
 other bank or financial institution or other Person at **which such account is maintained or with which such entitlement or contract is carried and which has been approved by MCI in its sole discretion.**![](ex10-8_002.jpg)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. RESERVED.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n. MCI
 shall have confirmed the receipt and effectiveness in writing of all the Loan Documents,
 in form and substance satisfactory to MCI in its sole option, duly executed, and each such
 document shall be in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o. MCI
 shall have received and be satisfied with separate subordination agreements, in a form acceptable
 to MCI in its sole discretion, duly executed and delivered by each Subordinating Creditor,
 respectively, to MCI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. MCI
 shall have received and be satisfied with landlord consents and waivers and/or lien subordination
 agreements for all of Borrower's leased locations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q. MCI
 shall have received and be satisfied with evidence satisfactory to MCI that Borrower has
 instructed all of its Account Debtors, customers and other parties obligated in respect of
 the Accounts, General Intangibles and other Collateral that all payments made on any Account,
 General Intangibles and other Collateral shall be remitted directly and solely to the Lock
 Box or Lock Box Account as MCI determines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r. Such
 other matters set forth on <u>Schedule 1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. <u>Conditions Precedent to the Subsequent Advances</u>. Any subsequent Advances by MCI hereunder or any
 other Loan Documents, are subject to the fulfillment, to the satisfaction of MCI in its sole
 option, of each of the following conditions precedent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. the
 representations and warranties contained in this Agreement and the other Loan Documents shall
 be true and correct in all material respects (except to the extent otherwise qualified by
 materiality, in which case it shall be true and correct in all respects) on and as of the
 date of such extension of credit, as though made on and as of such date (except to the extent
 that such representations and warranties relate solely to an earlier date (in which case
 they shall be true and correct in all material respects (except to the extent otherwise qualified
 by materiality, in which case it shall be true and correct in all respects) as of such earlier
 date)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. no
 Default or Event of Default shall have occurred and be continuing on the date of such extension
 of credit, nor shall either result from the making thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. no
 injunction, writ, restraining order, or other order of any nature restricting or prohibiting,
 directly or indirectly, the extending of such credit shall have been issued and remain in
 force by any Governmental Authority against Borrower, MCI, or any of their affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. no
 Material Adverse Change shall have occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Borrower
 shall have delivered to MCI a Compliance Certificate, which shall evidence Borrower's
 compliance with each covenant set forth at Section 7, as of the date of such Advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Borrower
 shall have delivered a Control Agreement for each deposit account maintained by or for the
 benefit of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Borrower
 shall have delivered to MCI a current Borrowing Base Certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. the
 conditions precedent to the initial Advance set forth in Section 5.1 shall remain satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;6. <u>BORROWER'S REPRESENTATIONS AND WARRANTIES</u>. Borrower makes the following representations and warranties
 which shall be deemed to be continuing representations and warranties so long as any credit
 hereunder shall be available and until the Obligations have been repaid in full:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Existence and Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The
 chief executive office of Borrower is at the address specified on <u>Schedule 1</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Borrower
 is an entity described on <u>Schedule 1</u> duly organized and existing under the laws of
 the State of Organization (as defined on <u>Schedule 1</u>), has the organizational identification
 number set forth on <u>Schedule 1</u> and is qualified and licensed to do business and is
 in good standing in any state in which the conduct of its business or its ownership of property
 requires that it be so qualified;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Borrower
 has the right and power to enter into this Agreement and each of the other Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Borrower
 has the power, authority, rights and franchises to own its property and to carry on its business
 as now conducted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Borrower
 has no investment in any other business entity;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **The Borrower's exact legal name is set forth in the first paragraph of this Agreement;** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Borrower
 is not currently subject to, and has no intention of commencing, any bankruptcy or Insolvency
 Proceeding. Borrower is solvent and will not be rendered insolvent by the transactions contemplated
 by this Agreement. Borrower does not have any intent to hinder, delay, or defraud any of
 its creditors in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Agreement Authorized</u>. The execution, delivery and performance by Borrower of this Agreement and
 each of the other Loan Documents: (a) have been duly authorized and do not require the consent
 or approval of any governmental body or other regulatory authority; and (b) shall not constitute
 a breach of any provision contained in Borrower's Governing Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>Binding Agreement</u>. This Agreement is the valid, binding and legally enforceable obligation of
 Borrower in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>No Conflict</u>. The execution, delivery and performance by Borrower of this Agreement and each
 of the other Loan Documents: (a) shall not constitute an event of default under any agreement,
 indenture or undertakings to which Borrower is a party or by which it or any of its property
 may be bound or affected; (b) are not in contravention of or in conflict with any law or
 regulation; and (c) do not cause any Lien, charge or other encumbrance to be created or imposed
 upon any such property by reason thereof other than the security interests granted to MCI
 in the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>Litigation</u>.
 Except as set forth on <u>Exhibit C</u>, there are no actions or proceedings pending by or
 against Borrower, its executive officers or any Guarantor before any court or administrative
 agency, and Borrower has no knowledge or belief of any pending, threatened or imminent litigation,
 governmental investigations or claims, complaints, actions or prosecutions involving Borrower,
 its executive officers or any Guarantor, except for ongoing collection matters in which Borrower
 is the plaintiff and except as heretofore disclosed, in writing, to MCI. Borrower is not
 in default with respect to any order, writ, injunction, decree or demand of any court or
 any governmental or regulatory authority.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. <u>Financial Condition</u>. All financial statements and information relating to Borrower which have been
 delivered by Borrower to MCI have been prepared in accordance with GAAP, unless otherwise
 stated therein, and fairly and reasonably present Borrower's financial condition. There
 has been no Material Adverse Change since the date of the most recent of such financial statements
 submitted to MCI. Borrower has no knowledge of any liabilities, contingent or otherwise,
 which are not reflected in such financial statements and information, and Borrower has not
 entered into any special commitments or contracts which are not reflected in such financial
 statements or information which may have a materially adverse effect upon Borrower's
 financial condition, operations or business as now conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. <u>Tax Status</u>. Borrower has no liability for any delinquent state, local or federal Taxes, except
 as shown on <u>Exhibit F</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8. <u>Title to Assets</u>. Borrower has good title to all its assets and the Collateral and the same
 are not subject to any Liens or encumbrances other than those permitted by <u>Section 6.12(a)</u> and as shown on <u>Exhibit G</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9. <u>Licenses and Authorizations</u>. Borrower has all permits, licenses, provider numbers, accreditations,
 certifications, authorizations, approvals, consents and agreements of all Account Debtors,
 governmental agencies and instrumentalities, accreditation agencies and any other Person
 or entity necessary or required for the Borrower to own the assets that it now owns, to carry
 on its business as now conducted, to execute, deliver and perform this Agreement, including
 any other documents contemplated hereby, and to receive payments from the Account Debtors;
 and the Borrower has not been notified by any such Account Debtor, governmental agency or
 instrumentality, accreditation agency or any other Person or entity that any such Account
 Debtor, agency, instrumentality or other Person or entity has rescinded or not renewed, or
 intends to rescind or not renew, any such permit, license, provider number, accreditation,
 certification, authorization, approval, consent or agreement granted by it to the Borrower
 or to which it and the Borrower are parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10. <u>Trademarks and Patents</u>. Borrower, as of the Closing Date, possesses all necessary trademarks, trade
 names, copyrights, patents, patent rights and licenses, permits, to conduct its business
 as now operated, without any known conflict with the valid trademarks, trade names, copyrights,
 patents and license rights of others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11. <u>Environmental Quality and Legal Compliance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower
 has in the past and is currently in compliance with any and all Environmental and Social
 Laws and Labor Laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower
 has in the past and is currently in compliance with any and all federal, state and local
 statutes, laws and regulations concerning the conduct of its business and its operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Borrower
 is not aware after due inquiry that it is under investigation by any state or federal agency
 designed to enforce Environmental and Social Laws and Labor Laws either in its jurisdiction
 or any other relevant jurisdiction or any environmental, health and safety guidelines of
 Borrower and MCI. Borrower has not received nor is aware of any existing or threatened complaint,
 order, directive, claim, citation or notice from any Governmental Authority or any material
 written communication from any Person with respect to any aspect of its compliance with any
 matter covered by the Environmental and Social Law, Labor Law or any environmental, health
 and safety guidelines of Borrower and MCI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower
 is currently and shall at all times be in full compliance with all applicable regulations
 of the US Food and Drug Administration as well as all other federal, state and local agencies
 having jurisdiction over the Borrower and its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To
 the best of its knowledge and belief after due inquiry, Borrower is not in violation of any
 statute or regulation of any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) There
 are not present in, on or under any business location of Borrower, including, without limitation,
 the Approved Locations, any hazardous substances in such form or quantity as to create any
 material liability or obligation for Borrower or MCI under the common law of any jurisdiction
 or under any Environmental and Social Laws, and no hazardous substances have ever been stored,
 buried, spilled, leaked, discharged, emitted or released in, on or under any business location
 of Borrower, including, without limitation, the Approved Locations, in such a way as to create
 any such material liability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12. Accounts, General Intangibles and Negotiable Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Borrower
 has good and marketable title to the Accounts, the General Intangibles and the Negotiable Collateral, free and clear of Liens, claims,
 security interests, or encumbrances (except as held by MCI, and except as may be specifically consented to, in advance and in writing,

 lease of goods or the rendition of services to Account Debtors in the ordinary and usual course of business and will be owed to Borrower
 without any known defenses, disputes, offsets or counterclaims, or any rights of return or cancellation; Borrower shall have received
 no notice of actual or imminent bankruptcy or insolvency or Insolvency Proceeding of any Account Debtor at the time the Account due
 from such Account Debtor is created; and in accordance with prudent credit policies, the Account Debtor shall be able to timely discharge
 all of its Indebtedness to Borrower;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Borrower
 shall deliver to MCI, as MCI may from time to time require, original delivery receipts, customer's
 purchase orders, time tickets or other proofs of services as appropriate in Borrower's
 business, airbills, shipping instructions, bills of lading and other documentation respecting
 shipment arrangements as applicable to each purchase by Borrower of an Account. Absent such
 a request by MCI, copies of all such documentation shall be held by Borrower as custodian
 for MCI;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Each
 Eligible Account will be due and payable in accordance with the terms set forth in Section
 1.14, or on such other terms approved, in writing, by MCI in advance of the creation of such
 Account, and such terms shall be expressly set forth on the face of the invoice for such
 Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13. Inventory and Equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The
 Inventory and Equipment are currently located only at the locations identified on <u>Exhibit E;</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. All
 Inventory is now and at all times hereafter shall be of good and merchantable quality, free
 from defects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The
 Inventory and Equipment are and shall remain free from all Liens, claims, encumbrances, and
 security interests (except as held by MCI, and except as may be specifically consented, in
 advance and in writing, by MCI);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. The
 Inventory is not now stored with a bailee, warehouseman or similar party except with those
 bailees, warehousemen or similar parties with which MCI has entered into a landlord waiver,
 consent or lien subordination agreement or equivalent arrangement at MCI's satisfaction;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Borrower
 currently keeps correct and accurate records itemizing and describing the kind, type, quality
 and quantity of the Inventory, and its cost therefore.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. All
 rent, taxes and fees due by Borrower in connection with any Approved Location have been paid
 in full and Borrower is not in default under any warehouse agreement, lease or other agreement
 with respect to any Approved Locations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.14. <u>Brokers</u>.
 Except GVC Advisory Services, Ltd., there has been no mortgage or loan broker in connection
 with this loan transaction. Notwithstanding the foregoing, Borrower shall pay, and hold MCI
 harmless from, any and all claims of any brokers, finders or agents claiming a right to any
 fees in connection with arranging the financing contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.15. <u>Control</u>.
 Borrower will cooperate with MCI in obtaining control with respect to Collateral consisting
 of deposit accounts, Investment Property, Letter of Credit Rights and electronic chattel
 paper.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.16. <u>Tradenames and Tradestyles</u>. The Borrower utilizes the tradenames and tradestyles set forth on <u>Schedule 1</u>. The Borrower specifically authorizes MCI to accept invoices assigned to MCI bearing
 the Borrower's name or in the name of any of the tradenames or tradestyles set forth
 on <u>Schedule 1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.17. <u>Accounts Payable</u>. Borrower is current with all of its vendors and pays all of its vendors within
 ninety (90) days or less of invoice days (or as otherwise acceptable to MCI). Borrower shall
 provide MCI with all invoices from vendors and receipts for the purchase of goods, as well
 as proof of payment of accounts payable. MCI shall have the right to pay all or some of the
 accounts payable to Borrower's vendors in the event that Borrower does not pay them
 on a timely basis, and such amounts shall constitute advances hereunder. In addition, MCI
 may utilize the funds in the Lock Box Account to pay such accounts payable.

&nbsp;&nbsp;&nbsp;&nbsp;7. <u>BORROWER'S AFFIRMATIVE COVENANTS</u>. Borrower covenants and agrees that so long as any credit hereunder
 shall be available and until the Obligations have been repaid in full, unless MCI shall otherwise
 consent in writing, Borrower shall do all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. <u>Borrowing Base Certificate and Invoices.</u> Upon each Request for Advance and at least once a week,
 Borrower shall deliver to MCI: (1) a updated Borrowing Base Certificate since the delivery
 of the immediately preceding Borrowing Base Certificate required hereunder; (2) copies of
 invoices evidencing such sales and shipping evidence and proofs of delivery relating thereto
 as applicable to each Account create by Borrower; and (3) such other documentation as MCI
 may reasonably request from time to time including but not limited to copies of time tickets
 or other proof of service, bills of lading and other proof of delivery.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. <u>Rights and Facilities</u>. Borrower shall maintain and preserve all rights, franchises and other
 authority adequate for the conduct of its business. Borrower shall also maintain its properties,
 equipment and facilities in good order and repair and conduct its business in an orderly
 manner without voluntary interruption and maintain and preserve its existence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3. <u>Location of Inventory and Equipment</u>. The Inventory and Equipment shall be located only at locations
 listed on <u>Exhibit E</u> or such other locations as shall have been approved by MCI in
 writing (" <u>Approved Locations</u> ") and shall not be moved without MCI's
 prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4. <u>Inventory Records</u>. Borrower shall keep correct and accurate records itemizing and describing the
 kind, type, quality and quantity of the Inventory, and its cost thereof, all of which records
 shall be available upon demand to any of MCI's officers, agents and employees for inspection
 and copying.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5. <u>Insurance</u>.
 Borrower, at its expense, shall keep and maintain its assets insured against loss or damage
 by fire, theft, explosion, sprinklers and all other hazards and risks ordinarily insured
 against by other owners who use such properties in similar businesses for the full insurable
 value thereof. Borrower shall deliver to MCI certified copies of such policies of insurance
 and evidence of the payments of all premiums thereof. Borrower shall also keep and maintain
 business interruption, public liability, including products liability and property damage
 insurance relating to Borrower's ownership and use of the Inventory, the Equipment
 and its other assets. All such policies of insurance shall be in such form, with such companies,
 and in such amounts as may be satisfactory to MCI. All such policies of insurance (except
 those of public liability and property damage) shall contain an endorsement in a form satisfactory
 to MCI showing MCI as a loss payee thereof, and all proceeds payable thereunder shall be
 payable to MCI and, upon receipt by MCI, shall be applied on account of the Obligations owing
 to MCI. To secure the payment of the Obligations, Borrower grants MCI a security interest
 in and to all such policies of insurance (except those of public liability and property damage)
 and the proceeds thereof, and Borrower shall direct all insurers under such policies of insurance
 to pay all proceeds thereof directly to MCI. Borrower shall not permit any other party to
 be included or named as a loss payee or additional insured under a credit insurance or any
 other insurance policy without the prior written consent of MCI, except landlords as required
 in lease agreements with Borrower and subject to the terms of the respective landlord consent
 and/or lien subordination agreements. Borrower shall provide MCI with proof of the
renewal of each credit and other insurance policies no later than fifteen (15) days before their expiration date. All of the insurance
policies required hereby shall be evidenced by one or more certificates of insurance delivered to MCI by Borrower on or prior to the Closing
Date and at such other times as MCI may request from time to time. If all or any part of the Eligible Accounts, Eligible Inventory and/or
Collateral shall be lost, damaged or destroyed by a casualty covered by insurance as required by this Agreement, Borrower shall immediately
give written notice thereof to MCI and the appropriate insurer, and shall thereafter prosecute the resolution of such claim.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6. <u>Liquidity Covenant</u>.
 Borrower shall maintain, at all times, Availability <u>plus</u> Unrestricted Cash in an amount equal or greater than $500,000.00.

7.7. <u>Notice of Litigation</u>.
 If at any time during the term of this Agreement any litigation, governmental investigations or claims, complaints, actions or prosecutions
 involving Borrower, any of its executive officers or any guarantor of Borrower shall be commenced, Borrower shall promptly, and no
 later than two (2) calendar days from said commencement, notify MCI in writing of such event.

7.8. <u>Submission of Records and Reports</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower
 shall execute and deliver to MCI within ten (10) days after the end of each month during
 the term of this Agreement, reflecting the status as of the end of each month, certified
 by any one of the Authorized Parties of Borrower as being true and correct, (i) a current
 detailed aging, by total and by customer, of Borrower's Accounts, (ii) a current detailed
 aging, by total and by vendor, of Borrower's accounts payable and (iii) a Compliance
 Certificate in the form of <u>Exhibit D</u> from and of one of the Authorized Parties of
 Borrower certifying that no Event of Default currently exists under this Agreement, all of
 which shall be set forth in a form and shall contain such information as is acceptable to
 MCI;

(b) Borrower
 shall promptly supply MCI with such other information concerning its affairs as MCI may request
 from time to time hereafter, and shall promptly notify MCI of any Material Adverse Change
 and of any condition or event which constitutes a breach of, or an event which constitutes
 an Event of Default under, this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Borrower
 shall, within forty-four (24) hours of receipt thereof: (i) deliver to MCI an exact, true,
 complete and accurate copy of any reports, documents, or deliverables received by any Governmental
 Authority as a result of any audits, visits or inspections performed over Borrower and its
 business, and (ii) inform MCI in writing about the actions to be taken by Borrower (with
 respective timeframes) to cure any deficiency, default, observation, or failure noted by
 any such audits, visits or inspections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9. <u>Taxes</u>. All assessments
 and Taxes, whether real, personal or otherwise, due or payable by, or imposed, levied or assessed against Borrower or any of its property
 shall be paid in full, before delinquency or before the expiration of any extension period. Borrower shall make due and timely payment
 or deposit of all federal, state and local taxes, assessments or contributions required of it by law, and will execute and deliver
 to MCI, on demand, appropriate certificates attesting to the payment or deposit thereof. Borrower will make timely payment or deposit
 of all F.I.C.A. payments and withholding taxes required of it by Applicable Laws and will furnish MCI with proof satisfactory to MCI
 indicating that Borrower has made such payments or deposits.

7.10. <u>Financial Statements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Borrower
 shall maintain a standard and modern system of accounting in accordance with GAAP with ledger
 and account cards and/or computer tapes, discs, printouts, and records pertaining to the
 Collateral which contains information as may from time to time be requested by MCI. Borrower
 shall not modify or change its method of accounting or enter into, modify or terminate any
 agreement presently existing, or at any time hereafter entered into with any third-party
 accounting firm and/or service bureau for the preparation and/or storage of Borrower's
 accounting records without said accounting firm and/or service bureau agreeing to provide
 to MCI information regarding the Collateral and Borrower's financial condition. Borrower
 agrees to permit MCI and any of its employees, officers or agents, upon demand, during Borrower's
 usual business hours, or the usual business hours of third Persons having control thereof,
 to have access to and examine all of Borrower's Books relating to the Collateral, the
 Obligations, Borrower's financial condition and the results of Borrower's operations,
 and, in connection therewith, permit MCI or any of its agents, employees or officers to copy
 and make extracts therefrom.

b. For
 each of Borrower's fiscal years during the term of this Agreement, Borrower shall deliver
 to MCI:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. within
 the Monthly Reporting Period (as defined on <u>Schedule 1</u>), a statement of the financial
 condition of Borrower for such monthly period on a Monthly Reporting Level (as defined on <u>Schedule 1</u>), including, but not limited to, a balance sheet, a profit and loss statement,
 and a cash flow statement, and any other report requested by MCI relating to the Collateral
 and the financial condition of Borrower, and a certificate signed by any one of the Authorized
 Parties of Borrower, to the effect that all statements and reports delivered or caused to
 be delivered to MCI under this subsection, fairly and thoroughly present the financial condition
 of Borrower, are true and correct as of the last day of the immediately preceding calendar
 month and that there exists on the date of delivery to MCI no condition or event which constitutes
 an Event of Default under this Agreement or which, with the giving of notice or the passage
 of time or both, would constitute an Event of Default under this Agreement;

II. within
 the Annual Reporting Period (as defined on <u>Schedule 1</u>), a statement of the financial
 condition of Borrower for such fiscal year, on an Annual Reporting Level (as defined on <u>Schedule 1</u>) basis, including, but not limited to, a balance sheet, a profit and loss statement,
 and a cash flow statement, and any other report requested by MCI relating to the Collateral
 and the financial condition of Borrower, and a certificate signed by any one of the Authorized
 Parties of Borrower, to the effect that all reports, statements, computer disc or tape files,
 printouts, runs, or other computer prepared information of any kind or nature relating to
 the foregoing or documents delivered or caused to be delivered to MCI under this subsection,
 fairly and thoroughly present the financial condition of Borrower and that there exists on
 the date of delivery to MCI no condition or event which constitutes an Event of Default under
 this Agreement or which, with the giving of notice or the passage of time or both, would
 constitute an Event of Default under this Agreement.

III. As
 soon as available and in any event no later than one hundred twenty (120) days after the
 end of each fiscal year of Borrower, starting with the fiscal year ending December 31, 2024,
 a consolidated balance sheet of Borrower as of the end of such fiscal year and statements
 of cash flow and income and retained earnings of Borrower for such fiscal year, each prepared
 in accordance with GAAP and audited by independent public accountants acceptable to MCI.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IV. As soon as available after
 the close of each fiscal year, and in any event no later than twelve (12) months from the date the previous personal financial statements
 of such Guarantor were furnished to MCI, copies of the signed updated annual personal financial statements of each Guarantor, including,
 without limitation, statements of financial condition, a listing of real estate holdings (including percentage of ownership and ownership
 status), income and cash flows, a reconciliation of net worth, a listing of all contingent liabilities and notes to financial statements,
 and any other information reasonably requested by the MCI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11. <u>Annual Reports</u>. Borrower
 shall deliver to MCI a copy on an annual basis, the annual report which it files with The US Government or Governmental agencies who
 may require such documents as part of Borrowers contractual agreements for product or services provided by the Borrower.

7.12. <u>Tax Returns</u>. Borrower
 shall deliver to MCI copies of each of Borrower's future federal and state income tax returns, and any amendments thereto, within
 fifteen (15) calendar days following the filing thereof with the Internal Revenue Service and with the appropriate state offices. Upon
 the written request of MCI, Borrower further agrees to promptly deliver to MCI proof of payment for the payment of federal and state
 withholding taxes required of it, and will provide MCI with access to Borrower's bank accounts to verify payment of taxes.

7.13. <u>Payment of Debts</u>.
 Borrower shall be at all times hereafter solvent and able to pay its debts (including trade debts) as they mature.

7.14. <u>Compliance with Environmental and Other Laws</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u> <u>Compliance with Laws</u>. Borrower has in the past, is currently and shall at all times be in compliance
 with any applicable Environmental Law and Labor Law.

<u>(b)</u> <u>Environmental and Social Examination</u>. Borrower shall allow MCI or the environmental or social consultant(s)
 retained by MCI, at Borrower's sole expense, to perform monitoring activities, field
 exams, visits and independent audits (including access to documentation, personnel, facilities
 and project sites) with respect to environmental and social matters from time to time (" <u>ESG Audit</u> "). MCI shall be permitted to conduct the ESG Audit upon 24 hours advance
 notice to Borrower prior to the occurrence of an Event of Default, and after an Event of
 Default, without any prior notice. Borrower shall be responsible for all ESG Audit reasonable,
 documents and out-of-pocket fees and expenses; provided, however, unless an Event of Default
 shall be continuing, Borrower's obligation to pay for any such ESG Audit shall be limited
 to one ESG Audit within a twelve-month period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Environmental and Social Notices</u>. Borrower shall promptly, and no later than two (2) calendar days from the date of the occurrence of the relevant event,
 send Purchaser written notice of: (a) any non-compliance by the Borrower with any Environmental and Social Law, Labor Law and/or other
 environmental and social provisions of this Agreement; and (b) any environmental or social claim (including administrative, regulatory
 or judicial action, suit, judgment or demand) or material complaint relating to environmental, social, health and safety or labor aspects
 relating to the Borrower, any affiliates and/or any Borrower and Borrower's affiliates' activities. Such notice shall include
 a description of the event, detailing the extent, magnitude, impact and cause of such event, together with corrective or remedial actions
 taken or proposed to be taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.15. <u>Reimbursement for MCI Expenses</u>. Upon the demand of MCI, Borrower shall immediately reimburse MCI for all sums expended by MCI which constitute MCI Expenses
 and Borrower hereby authorizes and approves all Advances and payments by MCI for items constituting MCI Expenses.

7.16. <u>Use of Proceeds</u>. Borrower
 shall use the proceeds of the first Advance to satisfy in full the Existing Indebtedness, broker fees or commissions, transaction costs,
 and working capital. All other proceeds of Advances shall be used solely to finance Accounts and Inventory, subject to the terms of
 this Agreement.

7.17. <u>No False Information</u>.
 Borrower shall not furnish MCI with any certificate or other document that contains any untrue statement of material fact or that omits
 to state a material fact necessary to make it not misleading in light of the circumstances under which it was furnished.

7.18. <u>Post-Closing Obligation</u>.
 Borrower shall cause Cardinal Health 110, LLC, and any of its affiliates with which Borrower has entered into any agreement, to execute
 a subordination agreement with and for the benefit of MCI on or before the date that is thirty (30) calendar days after the Closing
 Date, time being of the essence, and to be satisfactory, in form and substance, to MCI in its reasonable discretion. The failure to
 satisfy the above condition subsequent on or before the date when due shall be an Event of Default hereunder, unless otherwise agreed
 to in writing by MCI.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.19. <u>Replacement of Validity Guarantors</u>.
 In the case of the death, resignation discharge, firing or release from service of any Validity Guarantors, and unless MCI determines
 in its reasonable discretion that no replacement is needed, Borrower will make commercially reasonable efforts to replace such Validity
 Guarantor and will exercise good faith, prudence and good judgement in selecting a replacement. Borrower will evaluate all qualifications
 to include, but not limited to, industry experience, attention to detail, personal and professional integrity. Any such new guarantor
 selected by Borrower will execute a new Guaranty Agreement substantially in the terms of the Guaranty Agreement executed by the Validity
 Guarantors as of the Closing Date. Borrower will share with MCI the criteria used in selecting the replacement guarantor.

8. <u>BORROWER'S NEGATIVE COVENANTS</u> 

Borrower covenants and agrees that so long as any credit hereunder shall be available and until the Obligations have been repaid in full, unless MCI shall otherwise consent in writing, Borrower shall not do any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. <u>Relocate of Chief Executive Office</u>. Borrower will not, without thirty (30) days prior written notification to MCI, relocate its chief executive office or change
 its State of Organization.

8.2. <u>Agreements with Account Debtors</u>. After an Event of Default hereunder, no discount, credit or allowance shall be granted by Borrower to any Account Debtor
 and no return of merchandise shall be accepted by Borrower without MCI's consent. MCI may, after an Event of Default, settle
 or adjust disputes and claims directly with Account Debtors for amounts and upon terms which MCI considers advisable, and in such cases,
 MCI will credit Borrower's account with only the net amounts received by MCI in payment of such disputed Accounts, after deducting
 all MCI Expenses incurred or expended in connection therewith.

8.3. <u>Storage of Inventory</u>.
 The Inventory shall not at any time or times hereafter be stored with a bailee, warehouseman or similar party without MCI's prior
 written consent, and, in such event, Borrower will, concurrent therewith, cause any such bailee, warehouseman or similar party to issue
 and deliver to MCI, in a form acceptable to MCI, warehouse receipts in MCI's name evidencing the storage of the Inventory, and
 to execute landlord waivers, consents, lien subordination agreements or similar agreements to the satisfaction of MCI.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4. <u>Business Structure and Operations</u>. Borrower shall not, without MCI's prior written consent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Sell,
 lease, or otherwise dispose of, move, relocate (except in connection with a relocation of
 Borrower's business facility) or transfer, whether by sale or otherwise, any of Borrower's
 assets, except sales of Inventory in the ordinary and usual course of Borrower's business
 as presently conducted;

b. Change
 Borrower's name or form of entity, or add any new fictitious name;

c. Acquire,
 merge or consolidate with or into any other business organization;

d. Enter
 into any transaction not in the ordinary and usual course of Borrower's business;

e. Guarantee
 or otherwise become in any way liable with respect to the obligations of any third party
 except by endorsement of instruments or items of payment for deposit to the general account
 of Borrower or which are transmitted or turned over to MCI;

f. Make
 any change in the Borrower's financial structure or in any of its business objectives,
 purposes or operations which could have a material adverse effect on the ability of Borrower
 to repay the Obligations;

g. Incur
 any debts outside the ordinary and usual course of Borrower's business;

h. Enter
 into any other loan, financing, factoring, merchant cash advance or similar agreement with
 any party other than MCI;

i. Make
 any advance or loan to any Person or entity;

j. Prepay
 any existing indebtedness owing to any third party;

k. Cause,
 permit or suffer any change, direct or indirect, in Borrower's capital ownership;

l. Make
 any distribution or declare or pay any dividends (in cash or in stock) on, or purchase, acquire,
 redeem or retire any of its common stock, membership or partnership interests, of any class,
 whether now or hereafter outstanding without the prior written consent of MCI which shall
 not be unreasonably withheld, delayed or conditioned.;

m. Suspend
 or go out of business;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n. Pay
 total compensation to officers of Borrower (or any of their relatives), including salaries,
 withdrawals, fees, bonuses, commissions, drawing accounts and other payments, whether directly
 or indirectly, in money or otherwise, during each fiscal year of Borrower during the term
 of this Agreement in an aggregate amount for all such officers in excess of such amounts
 in effect on the date hereof, if such payment could cause a Material Adverse Change;

o. Make
 any loans, advances, intercompany transfers or cash flow between the Borrower and any subsidiary,
 related entity or affiliate of the Borrower or with any company that has common shareholders,
 officers or directors with the Borrower;

p. Allow
 to exist any Lien or security interest in the Collateral, except for the security interest
 granted to MCI and such other security interests which have been consented to by MCI;

q. Reorganize
 or reincorporate itself under the laws of any jurisdiction other than its State of Organization;

r. File
 any financing statement or amendment or termination statement with respect to any financing
 statement filed in favor of MCI.

9. <u>EVENTS OF DEFAULT</u> 

Any one or more of the following events shall constitute an Event of Default by Borrower under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. <u>Failure to Pay Obligations</u>.
 If Borrower fails to pay when due and payable or when declared due and payable all or any portion of the Obligations owing to MCI (whether
 of principal, Taxes, reimbursement of MCI Expenses, or otherwise);

9.2. <u>Failure to Perform</u>.
 If Borrower fails or neglects to perform, keep or observe any term, provision, condition, covenant, agreement, warranty or representation
 contained in this Agreement, or in any of the other Loan Documents if such failure is not corrected within thirty (30) days after receipt
 of written notice thereof from MCI, provided, however that such notice and opportunity to cure shall not apply if the breach or failure
 to perform is not capable of being cured within such period or is a willful breach by Borrower;

9.3. <u>Inaccurate Information</u>.
 If any representation, statement, report, or certificate made or delivered by Borrower, or any of its officers, employees or agents,
 to MCI is not true and correct, in any material respect, at the time such representation, statement, report or certificate is delivered
 to MCI, including, but not limited to, any Request for Advance delivered to MCI pursuant to this Agreement;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4. <u>Third Party Claim</u>.
 If all or a material portion of Borrower's assets are attached, seized, subjected to a writ or distress warrant, or are levied
 upon, or come into the possession of any Judicial Officer or Assignee;

9.5. <u>Impairment</u>. If Borrower
 fails to repay all or any portion of the Obligations owing to MCI or upon a material impairment of the value or priority of MCI's
 security interests in the Collateral;

9.6. <u>Insolvency Proceeding</u>.
 If an Insolvency Proceeding is commenced by or against Borrower that is not discharged within sixty (60) days of filing;

9.7. <u>Interruption of Business</u>.
 If Borrower is enjoined, restrained or in any way prevented by court order from continuing to conduct all or any material part of its
 business affairs;

9.8. <u>Governmental Lien</u>.
 If a notice of lien, levy or assessment is filed of record with respect to any or all of Borrower's assets by the United States
 Government, or any department, agency or instrumentality thereof, or by any state, county, municipal or other governmental agency,
 or if any tax or debt owing at any time hereafter to any one or more of such entities becomes a Lien, whether choate or otherwise,
 upon any or all of the Borrower's assets and the same is not paid on the payment date thereof, which lien is not removed within
 60 days after receipt by Borrower of first notice thereof;

9.9. <u>Liens</u>. If a judgment
 or other claim becomes a Lien or encumbrance upon all or a material portion of Borrower's assets;

9.10. <u>Judgments</u>. Any money
 judgment or judgments in the aggregate sum of $100,000.00 (or its equivalent in any other currency) shall be entered against Borrower
 or any Guarantor, any writ or warrant of attachment or similar process shall be entered, issued or filed against Borrower or any Guarantor
 and such judgment, writ, warrant or process shall remain unvacated, unbonded, unstayed, unsatisfied or unsettled for a period of thirty
 (30) days or in any event not later than five (5) days prior to the date of any proposed sale thereunder. Notwithstanding the above,
 in the event of an attachment of Borrower's or any Guarantor's assets, Borrower or any Guarantor, as applicable, shall
 diligently and in good faith take all actions promptly and reasonably necessary to vacate, bond, stay, contest, satisfy or otherwise
 dismiss said attachment;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.11. <u>Default in Agreement with Third Party</u>.
 If there is a default, after the expiration of all applicable cure periods, in any loan agreement, mortgage, indenture or other material
 agreement to which Borrower is a party with third parties (including but not limited to the Merchant Processing Agreement), and MCI
 reasonably determines that such default shall cause a Material Adverse Change;

9.12. <u>Default in Agreements with MCI</u>. Borrower or any Guarantor shall default in any of its or his or her obligations under any other indebtedness with MCI
 or default under any agreement to or in which MCI is a party or is otherwise involved, whether or not the MCI is a party to such agreement,
 or a default or event of default occur under any other Loan Documents.

9.13. <u>Merchant Processing Agreement</u>.
 If Borrower changes the payment instructions under the Merchant Processor Agreement without MCI's prior written consent or Borrower
 fails to notify MCI of the change of Merchant Processor prior to changing Merchant Processors company(s).

9.14. <u>Lock Box Account</u>.
 If Borrower instructs any Account Debtor or obligor on any Account or with respect to any other Collateral to make payments in any
 account other than the Lock Box or Lock Box Account, as applicable.

9.15. <u>Misrepresentation</u>.
 If any material misrepresentation exists now or hereafter in any warranty or representation made to MCI by Borrower or any officer
 or director of Borrower, or if any such warranty or representation is withdrawn by Borrower or by any officer or director of Borrower;

9.16. <u>Entering into other Financing</u>.
 If Borrower enters into a merchant cash advance agreement or other borrowing, loan, factoring or finance agreement, or encumbers in
 any way the Collateral, without the prior written consent of MCI;

9.17. <u>Impairment of Guaranty</u>.
 If the Parent Guarantor terminates its guaranty, defaults in the payment or performance of any obligations of guarantor owing to MCI,
 or becomes the subject of an Insolvency Proceeding and he, she or it is not replaced by another guarantor satisfactory to MCI in its
 sole discretion within the term of fifteen (15) days following such event;

9.18. <u>Violation of ERISA</u>.
 If a judgment issued by a court of competent jurisdiction declares that Borrower is in violation of any provision of Employee Retirement
 Income Security Act of 1974 ("ERISA");

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.19. <u>Failure to Maintain MCI's Liens</u>. MCI fails
 or ceases at any time to have a perfected first-priority security interest in any unit or item of Collateral.

10. <u>MCI's RIGHTS AND REMEDIES</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. <u>Remedies</u>. Upon the
 occurrence of an Event of Default by Borrower under this Agreement, MCI may, at its election, without notice of its election and without
 demand, do any one or more of the following, all of which are authorized by Borrower:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Declare
 all Obligations, whether arising pursuant to this Agreement or otherwise, immediately due
 and payable;

b. Cease
 advancing money or extending credit to or for the benefit of Borrower under this Agreement
 or under any other agreement between Borrower and MCI;

c. Terminate
 this Agreement and any of the other Loan Documents as to any future liability or obligation
 of MCI, but without affecting MCI's rights and security interest in the Collateral
 and without affecting the Obligations owing by Borrower to MCI;

d. MCI
 or MCI's designee may notify customers, Account Debtors or lessees of Borrower that
 the Accounts have been assigned to MCI and that MCI has a security interest therein, collect
 them directly, and charge the collection costs and expenses to Borrower's Loan Account;

e. Without
 notice to or demand upon Borrower or any Guarantor, make such payments and do such acts as
 MCI considers necessary or reasonable to protect its security interest in the Collateral.
 Borrower agrees to assemble the Collateral if MCI so requires, and to make the Collateral
 available to MCI as MCI may designate. Borrower authorizes MCI to enter the premises where
 the Collateral is located, take and maintain possession of the Collateral, or any part of
 it, and to pay, purchase, contest or compromise any encumbrance, charge or lien which in
 the opinion of MCI appears to be prior or superior to its security interest and to pay all
 expenses incurred in connection therewith;

f. MCI
 is hereby granted a license or other right to use, without charge, Borrower's labels,
 patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and
 advertising matter, or any property of a similar nature, as it pertains to the Collateral,
 in completing production of, advertising for sale and selling any Collateral and Borrower's
 rights under all licenses, and all franchise agreements shall insure to MCI's benefit;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Ship,
 reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale and
 sell (in the manner provided for herein) the Collateral;

h. Sell
 the Collateral at either a public or private sale, or both, by way of one or more contracts
 or transactions, for cash or on terms. It is not necessary that the Collateral be present
 at any such sale;

In connection with any such sale, the standard of commercial reasonableness will be deemed satisfied if MCI does the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>I.</u> <u>Location of Sale(s)</u>. The sale(s) may be conducted at Borrower's premises, MCI's premises,
 the premises of any third party located in or adjacent to any county in which any of the
 Collateral is located, or any other location which MCI believes is reasonably convenient
 to potential purchasers. The selection of any such location(s) shall be in the sole and absolute
 discretion of MCI.

<u>II.</u> <u>Notice of Sale</u>. Except in those circumstances where no notice is required under the Code, MCI
 shall give notice of the disposition of the Collateral as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. MCI
 shall give Borrower and each holder of a security interest in the Collateral who has filed
 with MCI a written request for notice, a notice in writing of the time and place of public
 sale, or, if the sale is a private sale or some other disposition other than a public sale
 is to be made of the Collateral, the time on or after which the private sale or other disposition
 is to be made;

b. The
 notice shall be personally delivered or mailed, postage prepaid, to Borrower as provided
 in Section 13, at least ten (10) calendar days before the date fixed for the sale, or at
 least ten (10) calendar days before the date on or after which the private sale or other
 disposition is to be made, unless the Collateral is perishable or threatens to decline speedily
 in value. Notice to Persons other than Borrower claiming an interest in the Collateral shall
 be sent to such addresses as they have furnished to MCI;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. If
 the sale is to be a public sale, MCI shall also give notice of the time and place by publishing
 a notice one time at least ten (10) calendar days before the date of the sale in a newspaper
 of general circulation in the county in which the sale is to be held;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. MCI
 may credit bid and purchase at any public sale;

j. If
 MCI sells any of the Collateral upon credit terms, Borrower will only be credited with payments
 actually made by such credit purchaser (the " <u>Credit Purchaser</u> "), received
 by MCI and applied to the indebtedness of the Credit Purchaser. In the event that the Credit
 Purchaser fails to pay for the Collateral, MCI may resell the Collateral and Borrower shall
 be credited with the net proceeds of sale, as provided above.

k. MCI
 may retain the Collateral in full or partial satisfaction of the Obligations.

l. Borrower
 shall pay all MCI Expenses incurred in connection with MCI's enforcement and exercise
 of any of its rights and remedies as herein provided, whether or not suit is commenced by
 MCI;

m. Any
 deficiency which exists after disposition of the Collateral as provided above will be paid
 immediately by Borrower. Any excess will be returned, without interest and subject to the
 rights of third parties, to Borrower by MCI;

n. Without
 notice to Borrower (such notice being expressly waived), and without constituting an acceptance
 of any collateral in full or partial satisfaction of an obligation (within the meaning of
 the Code), set off and apply to the Obligations any and all (i) balances and deposits of
 Borrower held by MCI (including any amounts received in the Lock Box Account), to the extent
 Borrower has rights therein, or (ii) Indebtedness at any time owing to or for the credit
 or the account of Borrower held by MCI;

o. Hold,
 as cash collateral, any and all balances and deposits of Borrower held by MCI, and any amounts
 received in the Lock Box Account, to secure the full and final repayment of all of the Obligations;

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![](ex10-8_001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. Ship,
 reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale,
 and sell (in the manner provided for herein) the Collateral. Borrower hereby grants to MCI,
 effective upon the occurrence and during the continuation of an Event of Default, a non-exclusive
 license or other right to use, without charge, such Borrower's labels, patents, copyrights,
 trade secrets, trade names, trademarks, service marks, and advertising matter, or any property
 of a similar nature, as it pertains to the Collateral, in completing production of, advertising
 for sale, and selling any Collateral and such Borrower's rights under all licenses
 and all franchise agreements shall inure to MCI's benefit;

q. MCI
 may seek the appointment of a receiver or keeper to take possession of all or any portion
 of the Collateral or to operate same and, to the maximum extent permitted by law, may seek
 the appointment of such a receiver without the requirement of prior notice or a hearing;

r. Exercise
 any right or remedy available to MCI under any of the Loan Documents or as otherwise provided
 by law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. <u>Cumulative Rights</u>.
 MCI's rights and remedies under this Agreement and all other Loan Documents shall be cumulative. MCI shall have all other rights
 and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by MCI of one right or remedy
 shall be deemed an election, and no waiver by MCI of any default on Borrower's part shall be deemed a continuing waiver. No delay
 by MCI shall constitute a waiver, election or acquiescence by it.

10.3. <u>Cross-Default</u>. Any
 default in the terms and conditions of this Agreement, the other Loan Documents or any other agreement between MCI and Borrower or
 any affiliate of Borrower, whether now existing or hereafter arising, shall constitute an Event of Default hereunder and a default
 thereunder.

11. <u>TAXES AND EXPENSES REGARDING THE COLLATERAL.</u> If Borrower fails to pay any monies (whether Taxes, assessments, insurance premiums, or otherwise) due to third
 Persons or entities, or fails to make any deposits or furnish any required proof of payment or deposit, all as required under the terms
 of this Agreement, then MCI may, to the extent that it determines in its sole discretion that such failure by Borrower could have a
 Material Adverse Change on MCI's interests in the Collateral, in its discretion and without prior notice to Borrower, (i) make
 payment of the same or any part thereof; (ii) set up such reserves in Borrower's loan account as MCI deems necessary to protect

 be immediately charged to Borrower's Loan Account and become additional Obligations owing to MCI, shall bear interest at the
 applicable rate set forth in Section 2.3(e), and shall be secured by the Collateral. Any payments made by MCI shall not constitute:
 (i) an agreement by MCI to make similar payments in the future, or (ii) a waiver by MCI of any Event of Default under this Agreement.
 MCI need not inquire as to, or contest the validity of, any such expense, tax, security interest, encumbrance or Lien, and the receipt
 of the usual official notice for the payment thereof shall be conclusive evidence that the same was validly due and owing.

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<u>12.</u> <u>WAIVERS</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1. <u>Application of Payments</u>.
 Borrower waives the right to direct the application of any and all payments at any time or times hereafter received by MCI on account
 of any Obligations owed by Borrower to MCI, and Borrower agrees that MCI shall have the continuing exclusive right to apply and reapply
 such payments in any manner as MCI may deem advisable, notwithstanding any entry by MCI upon its books.

12.2. <u>Demand, Protest, Default, Etc</u>. Except as otherwise provided herein, Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice
 of payment and nonpayment, notice of nonpayment at maturity, release, compromise, settlement, extension or renewal of any or all commercial
 paper, accounts, documents, instruments, chattel paper, and guarantees at any time held by MCI on which Borrower may in any way be
 liable.

12.3. <u>Risk of Loss</u>. Borrower
 has the risk of loss of the Collateral.

12.4. <u>Confidential Relationship</u>.
 Borrower waives the right to assert a confidential relationship, if any, it may have with any accounting firm and/or service bureau
 in connection with any information requested by MCI pursuant to or in accordance with this Agreement, and agrees that MCI may contact
 directly any such accounting firm and/or service bureau in order to obtain such information.

<u>13.</u> <u>NOTICES</u>.
 Unless otherwise specifically provided herein, all notices and service of any process shall
 be in writing addressed to the respective party as set forth below and may be Personally
 served, telecopied or sent by overnight courier service or United States mail and shall be
 deemed to have been given: (a) if delivered in Person, when delivered; (b) if delivered via
 email, upon receipt by the recipient via email which provides proof of receipt or at the
 time shown in any type of delivery confirmation report or receipt of an acknowledgment from
 the intended recipient (such as by "return receipt requested" function, as available,
 return email or other written acknowledgment), (c) if delivered by telecopy, on the date
 of transmission if confirmed and if transmitted on a Business Day before 4:00 p.m. (eastern
 standard time) or, if not, on the next succeeding Business Day; (d) if delivered by overnight
 courier, two days after delivery to such courier properly addressed; or (e) if by U.S. Mail,
 four Business Days after depositing in the United States mail, with postage prepaid and properly
 addressed.

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![](ex10-8_001.jpg)

If to Borrower: At the address specified on <u>Schedule 1</u>.

If to MCI: 936 SW 1st Ave, # 306, Miami, FL 33130

Attn: Peter D. Spradling (<u>peter@marcofi.com</u>)

---

| | |
|:---|:---|
| With a copy to: | Gary M. Krasna, Esq. |
|  | Gary M. Krasna, P.A. |
|  | 2385 NW Executive Center Drive |
|  | Suite 100 |
|  | Boca Raton, FL 33431 |
|  | Office 561-395-4141 |
|  | Fax 561-288-1447 |

---

The parties hereto may change the address at which they are to receive notices and the telecopier number at which they are to receive telecopies hereunder, by notice in writing in the foregoing manner given to the other.

&nbsp;&nbsp;&nbsp;&nbsp;<u>14.</u> <u>DESTRUCTION OF BORROWER'S DOCUMENTS</u>. Any documents, schedules, invoices or other papers delivered
 to MCI may be destroyed or otherwise disposed of by MCI four (4) months after they are delivered
 to or received by MCI, unless Borrower requests, in writing, the return of the said documents,
 schedules, invoices or other papers and makes arrangements, at Borrower's expense,
 for their return.

<u>15.</u> <u>CHOICE OF LAW</u>. The validity of this Agreement, its construction, interpretation and enforcement,
 and the rights of the parties hereunder and concerning the Collateral, shall be determined
 under, governed by, and construed in accordance with the laws of the State of New York. The
 parties agree that all actions or proceedings arising in connection with this Agreement shall
 be tried and litigated exclusively in the state and federal courts located in Miami-Dade
 County, State of Florida, or at MCI's option, in any court in which MCI shall initiate
 legal or equitable proceedings and which has subject matter jurisdiction over the matter
 in controversy. Borrower waives any challenge to personal jurisdiction and/or venue in such
 courts and waives any right it may have to assert the doctrine of <u>forum non conveniens</u> or to object to such venue and hereby consents to any court ordered relief.

<u>16.</u> <u>GENERAL PROVISIONS</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1. <u>Representations and Warranties Repeated</u>. Each representation, warranty and agreement contained in this Agreement shall be automatically deemed repeated with each
 Advance and shall be conclusively presumed to have been relied on by MCI regardless of any investigation made or information possessed
 by MCI. The warranties, representations and agreements set forth herein shall be cumulative and in addition to any and all other warranties,
 representations and agreements which Borrower shall give, or cause to be given, to MCI, either now or hereafter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2. <u>Binding Agreement</u>.
 This Agreement shall be binding and deemed effective when executed by Borrower and accepted and executed by MCI.

16.3. <u>Right to Grant Participations</u>.
 This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; <u>provided</u>, <u>however</u>, that Borrower may not assign this Agreement or any rights hereunder without MCI's prior written consent and any
 prohibited assignment shall be absolutely void. No consent to an assignment by MCI shall release Borrower from its Obligations to MCI.
 MCI may assign this Agreement and its rights and duties hereunder. MCI reserves the right to sell, assign, transfer, negotiate or grant
 participations in all or any part of, or any interest in, MCI's rights and benefits hereunder.

16.4. <u>Indemnification</u>. In
 consideration of the execution and delivery of this Agreement and the extension of financial accommodations by MCI to Borrower pursuant
 to this Agreement, Borrower agrees to indemnify, save, exonerate, and hold MCI, and each of the officers, directors, employees, attorneys,
 officers and agents of MCI (herein collectively called the " <u>Indemnitees</u> " and individually called an " <u>Indemnitee</u> ")
 free and harmless from and against any and all actions, claims, causes of action, suits, losses, liabilities, damages, and expenses,
 including, without limitation, reasonable attorneys' fees (including allocated costs for inhouse legal services provided and
 attorneys' fees in all bankruptcy proceedings) and disbursements (herein collectively called the " <u>Indemnified Liabilities</u> "),
 which may be incurred by or asserted against the Indemnitees or any Indemnitee as a result of, or arising out of, or relating to, or
 in connection with (i) this Agreement and any Loan Documents and the transactions contemplated by this Agreement or any of the other
 Loan Documents, (ii) any breach by Borrower or any Guarantor of any representation, warranty, covenant or other agreement contained
 in any of the Loan Documents, (iii) any investigation, litigation, or proceeding related to any use made or proposed to be made by
 Borrower of the proceeds of any Advance or loan made hereunder, (iv) the actions of any collection agency or agencies or attorneys
 retained by MCI for the purpose of collection or attempting to collect such Accounts, in all cases, whether or not any such Indemnitee
 is a party thereto, and, if and to the extent that the foregoing undertaking may be unenforceable for any reason, Borrower hereby agrees
 to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities as is permissible under Applicable
 Laws. Borrower shall pay, and hold MCI harmless from, any and all claims of any brokers, finders or agents claiming a right to any
 fees in connection with arranging the financing contemplated hereby. If any action, suit, or proceeding arising from any of the foregoing
 is brought against MCI, or any Indemnitee or affiliate of an Indemnitee indemnified or intended to be indemnified pursuant to this
 Section 16.4, Borrower, to the extent and in the manner directed by the Indemnitee or intended Indemnitee, shall resist and defend
 such action, suit, or proceeding or cause the same to be resisted and defended by counsel designated by Borrower (which counsel shall
 be reasonably satisfactory to the Indemnitee or intended Indemnitee). Each Indemnitee shall use its best efforts to cooperate in the
 defense of any such action, writ, or proceeding. Borrower shall have no obligation to any Indemnitee under this Section 16.4 to the
 extent that the Indemnified Liabilities resulted from the gross negligence or willful misconduct on the part of any Indemnitee. The
 Obligations of Borrower under this Section 16.4 shall survive the termination of this Agreement and the discharge of the Borrower's
 other Obligations hereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.5. <u>Tax Indemnification</u>.
 The Borrower agrees to pay and save MCI harmless against any liability for payment of any state documentary stamp taxes, intangible
 taxes or similar taxes (including interest or penalties, if any) which may now or hereafter be determined to be payable in respect
 to the execution, delivery or recording of any Loan Document or the making of any Advance, whether originally thought to be due or
 not, and regardless of any mistake of fact or law on the part of MCI or the Borrower with respect to the applicability of such tax.
 The provisions of this section shall survive payment in full of the Obligations and termination of this Agreement.

16.6. <u>Section Headings</u>.
 Section headings and section numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context,
 everything contained in each section applies equally to this entire Agreement.

16.7. <u>Interpretation</u>. Neither
 this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against MCI or Borrower, whether under any rule
 of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted
 according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

16.8. <u>Severability</u>. Each
 provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal
 enforceability of any specific provision.

16.9. <u>Modification and Merger</u>.
 This Agreement cannot be changed or terminated orally. All prior agreements, understandings, representations, warranties and negotiations,
 if any, are merged into this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.10. <u>Compliance</u>. The Borrower, for and in
 consideration of the making of the loan described herein and future advance funding, agree if requested by MCI or its counsel, Borrower
 will fully cooperate and execute and/or reexecute any document or documents due to clerical errors, scrivener's errors or relating
 to additional matters due to receipt and review of miscellaneous required items post closing, or otherwise on any or all of the closing
 documentation for the loan if deemed necessary, using reasonable discretion of MCI and its counsel.

16.11. <u>Transmittal of Funds</u>.
 Borrower understands that MCI charges a Wire Fee, as determined by MCI from time to time for incoming and outgoing wire transfer of
 funds and that there is no fee for ACH transfers. MCI may initiate a wire or ACH for the approved amount of a transfer no later than
 the second business day after receipt of all necessary documentation in connection with the assignment of Accounts and the advance.
 Borrower understands and agrees that MCI cannot control the time it will take for Borrower's bank to credit an ACH transfer to
 Borrower's account. Accordingly, Borrower instructs MCI to send all transfers to Borrower's account based upon the instructions
 set forth in Schedule 1, paragraph 20?.

16.12. <u>MCI's Counsel.</u> In
 the event that MCI has utilized counsel in connection with the closing of the transaction described in this Agreement, such counsel
 ("MCI Counsel") has (1) prepared certain documents relating to the Loan, including, among other documents, this Agreement;
 (2) examined such documents as MCI Counsel deemed necessary in connection with this transaction; and (3) supervised the closing of
 the Loan. MCI Counsel's fee for providing these services is stated on the Loan Closing Statement. These legal services have been
 performed on behalf of MCI and <u>not</u> on behalf of Borrower, and MCI Counsel's fees are being reimbursed to MCI by Borrower.

16.13. <u>Interest and Loan Charges Not to Exceed Maximum Allowed by Law</u>. Anything in this Agreement or any of the other Loan Documents to the contrary notwithstanding,
 in no event whatsoever, whether by reason of advancement of proceeds of the Loan, acceleration of the maturity of the unpaid balance
 of said loan or otherwise, shall the interest and loan charges agreed to be paid to MCI for the use of the money advanced or to be
 advanced hereunder exceed the maximum amounts collectible under Applicable Laws in effect from time to time. It is understood and agreed
 by the parties that, if for any reason whatsoever the interest or loan charges paid or contracted to be paid by Borrower in respect
 of the indebtedness evidenced by this Agreement shall exceed the maximum amounts collectible under Applicable Laws in effect from time
 to time, then <u>ipso facto</u>, the obligation to pay such interest and/or loan charges shall be reduced to the maximum amounts collectible
 under Applicable Laws in effect from time to time, and any amounts collected by MCI that exceed such maximum amounts shall be applied
 to the reduction of the principal balance(s) of the indebtedness evidenced by this Agreement and/or refunded to Borrower so that at
 no time shall the interest or loan charges paid or payable in respect of the indebtedness evidenced by this Agreement exceed the maximum
 amounts permitted from time to time by Applicable Laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.14. <u>Limitation of Liability</u>.
 Neither MCI nor any affiliate thereof nor any of their respective officers, directors, employees, attorneys and agents shall have any
 liability with respect to, and Borrower hereby waives, releases and shall not sue any of them upon, any claim for any special, indirect,
 incidental or consequential damages suffered or incurred by Borrower in connection with, arising out of, or in any way related to,
 this Agreement or any of the other Loan Documents, nor any of the transactions contemplated by this Agreement or any of the other Loan
 Documents. Borrower hereby waives, releases and shall not sue MCI or any of MCI's affiliates, officers, directors, employees,
 attorneys or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this
 Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents.

16.15.  **<u>JURY TRIAL.</u> MCI, THE BORROWER AND THE GUARANTORS ACKNOWLEDGE THAT THE TRANSACTIONS AND MATTERS SET FORTH IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE COMPLEX IN NATURE AND THAT ANY LITIGATION ARISING THEREFROM WOULD BE MOST APPROPRIATELY, ECONOMICALLY AND SPEEDILY RESOLVED BY A NON-JURY TRIAL. THE BORROWER, MCI AND THE GUARANTORS THEREFOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION, DIRECTLY OR INDIRECTLY, BASED ON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS OR THE LOANS AND FACILITIES CONTEMPLATED HEREBY, OR IN ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER WRITTEN OR ORAL) OR ACTIONS OR OMISSIONS OF ANY PARTY TO THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MCI's ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. BORROWER AND MCI EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS**.

16.16.  **<u>AUTOMATIC RELIEF FROM STAY AND OTHER BANKRUPTCY WAIVERS</u>. THE BORROWER AGREES THAT IF ANY PROCEEDING IS COMMENCED UNDER TITLE 11 OF THE UNITED STATES CODE RELATIVE TO IT, MCI SHALL BE AUTOMATICALLY ENTITLED TO IMMEDIATE RELIEF FROM STAY UNDER 11 U.S.C. SECTION 362 WITHOUT ESTABLISHING EQUITY OR NEED OR LACK OF NEED FOR THE PROPERTY SECURING THE LOANS OR CAUSE OR LACK OF CAUSE, AND THE BORROWER HEREBY CONSENTS TO SUCH RELIEF, IT BEING EXPRESSLY ACKNOWLEDGED THAT THIS PROVISION WAS SPECIFICALLY NEGOTIATED AND CONSTITUTES A MATERIAL INDUCEMENT TO MCI ENTERING INTO THIS AGREEMENT AND MAKING FINANCIAL AND OTHER ACCOMMODATIONS AND ADDITIONAL ADVANCES CONTEMPLATED HEREIN.** 

[*Remainder of page intentionally left blank; signature page follows.*]

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

---

| | |
|:---|:---|
| **<u>BORROWER</u>**: | **<u>BORROWER</u>**: |
| WELLGISTICS, LLC, | WELLGISTICS, LLC, |
| a Florida limited liability company | a Florida limited liability company |
| By: |  |
| Name: | Brian Leonard Norton |
| Title: | Manager |
| **<u>MCI</u>**: | **<u>MCI</u>**: |
| Marco Capital, Inc., a<br> Delaware corporation | Marco Capital, Inc., a<br> Delaware corporation |
| By: |  |
| Name: | Peter D. Spradling |
| Title: | COO |

---

*[Signature Page to Loan and Security Agreement]*

 

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

---

| | |
|:---|:---|
| **<u>BORROWER</u>**: | **<u>BORROWER</u>**: |
| WELLGISTICS, LLC, | WELLGISTICS, LLC, |
| a Florida limited liability company | a Florida limited liability company |
| By: |  |
| Name: | Brian Leonard Norton |
| Title: | Manager |
| **<u>MCI</u>**: | **<u>MCI</u>**: |
| Marco Capital, Inc., a<br> Delaware corporation | Marco Capital, Inc., a<br> Delaware corporation |
| By: |  |
| Name: | Peter D. Spradling |
| Title: | COO |

---

 

*[Signature Page to Loan and Security Agreement]*

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

---

| | |
|:---|:---|
| **<u>BORROWER</u>**: | **<u>BORROWER</u>**: |
| WELLGISTICS, LLC, | WELLGISTICS, LLC, |
| a Florida limited liability company | a Florida limited liability company |
| By: |  |
| Name: | Brian Leonard Norton |
| Title: | Manager |
| **<u>MCI</u>**: | **<u>MCI</u>**: |
| Marco Capital, Inc., a<br> Delaware corporation | Marco Capital, Inc., a<br> Delaware corporation |
| By: | ![](ex10-8_003.jpg) |
| Name: | Peter D. Spradling |
| Title: | COO |

---

*[Signature Page to Loan and Security Agreement]*

 

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## Exhibit 10.15

**Exhibit 10.15**

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## Exhibit 10.18

**Exhibit 10.18**

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## Exhibit 10.19

**Exhibit 10.19**

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## Exhibit 23.1

**Exhibit 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the use in this Registration Statement on Form S-1 of Wellgistics Health, Inc. of our reports dated 24th April 2024 relating to the Consolidated Financial Statements of Wellgistics, LLC and the Consolidated Financial Statements of Wood Sage, LLC as of and for the years ended December 31, 2023 and 2022, and our reports dated 29th August 2023 relating to the Financial Statements of Community Specialty Pharmacy, LLC and Alliance Pharma Solutions, LLC as of and for the years ended December 31, 2022 and 2021, which appear in this Registration Statement. We further consent to the incorporation by reference in this Registration Statement on Form S-1 of Wellgistics Health, Inc. of our report dated 24th April 2024 (except for the effects of the stock split discussed in Note 1 to the financial statements, as to which the date is November 05, 2024, and the reverse stock split discussed in Note 1 to the financial statements, as to which the date is December 06, 2024) relating to the Financial Statements of Danam Health, Inc. (n/k/a Wellgistics Health, Inc.), as of and for the year ended December 31, 2023, and our report dated 25th March 2025 relating to the Financial Statements of Wellgistics Health, Inc., as of and for the year ended December 31, 2024. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ Suri & Co., Chartered Accountants

No. 443 & 445 Guna Complex, Chennai

Date: August 28, 2025

Place: Chennai, India